What Merchants Want Out Of Mobile Commerce

As I said on Friday, CTIA invited 50,000 of its closest friends to gather in NOLA for its big International Wireless show. My final post will describe a few further musings on what I saw and heard – and a summary of my most awesome panel on mobile commerce. And, we’ll start with my most favorite of all topics… NFC. ☺

The N(FC) Word

Yep, NFC. There it was in all of its glory at CTIA. John Partridge (Visa) even said that 2012 is the year that mobile money makes its debut in the US – because NFC has been adopted as the technology standard. That sentiment was echoed on a panel in which Visa’s head of mobile described NFC as the way that security gets added to the payment transaction – and how it will allay consumer concerns over using the mobile as the payment device. Even on my own mobile commerce panel, when I asked my panelists what issue would be wrestled to the ground this time next year so we wouldn’t be talking about it – half said it would be NFC. Ay yi yi. No sense reprising my points of view on this – my latest posts and the comments that it generated sort of speaks for itself. But I mean really, look at the clouds guys, and look at what’s igniting. And, it has nothing to do with the N(FC) word.

The E word

One of the most interesting discussions in the mobile payments panel related to who controls the customer experience. It came up in the context of working with partners across the ecosystem to enable mobile commerce. Since everyone wants to “own” the customer, naturally everyone wants to “control” the customer experience. This is also where I believe that some of the biggest disruption can and will happen because of the introduction of the digital wallet.

Think of PayPal. When a customer pays with her PayPal wallet it is PayPal that in essence, “controls” the customer experience. If there is a problem, the buck stops at their door. The payment types that we attached to the PayPal account don’t have a say at all about how PayPal’s button looks, how they message its customers, how it goes to market, what its ads say.

Think about the networks. Networks have issuers as customers. Issuers will likely want a say in how their brand is displayed and where in digital wallets – after all, they’re the network’s customers. But when a consumer pays with a network wallet, they may not have the same visual association with the issuer’s brand that they do in a physical card world. Maybe they’re nothing more than a menu item in a list. Maybe they’re just a card that is associated with an account and never visible at all when a transaction is triggered. The consumer’s frame of reference is that they are paying with PayPass or V.me. So, the question then becomes, if that’s the brand affiliation that consumers see, will it also be the brand they will want to contact if there is a problem or they have a customer service issue? It will be interesting to see how this issue evolves as these wallets are deployed in market and consumers begin to use them.

You’ll Know it When You Use it (or Maybe Not)

The panel that I moderated on mobile commerce was just plain terrific. You never know how these things are going to go but you always hope for the best. This panel happened to be superlative. Dave Talich (VeriFone), Rob Russell (AT&T), Dom Morea (First Data), John Caron (Catalina Marketing) and John Puterbaugh (Nellymoser) were refreshingly honest in their views and opinions on the topics, were thought provoking and not sales pitchy in any way. They made it fun — right from the jump.

Here’s how we opened the discussion.

I asked each of my panelists to define mobile commerce and their role in it. It was going great until one panelist (okay, it was John Caron – John – you knew I was going to call you out on this) rather matter-of-factly said that mobile commerce was only when a customer used her phone in a store to assist in the shopping process – discover offers, price check, get reviews, check out via the phone. That’s right. In. A. Store. Well, you can imagine the reaction his comment got from me and the four other panelists.

Now, John is an agent provocateur in his own right, and did go on to further clarify his comment. His view is that shopping online with a mobile device is actually mobile ecommerce – so some of what he said in his opening comment was designed to get the juices flowing. Naturally, that kicked off a rather healthy debate over mobile commerce. The panel consensus: using an IP enabled device – the mobile phone or tablet to assist in and complete a shopping process in any venue counts as mobile commerce, particularly since the boundaries for where and when commerce happens via the mobile device really do blur.

This reminds me of the debate in the late 1990s when the concept of eBusiness was front page news. The debate was whether eBusiness was special because there was the “e” attached to it or whether eBusiness, in the end, was just the way business got done because of the “e.” Maybe over time, as mobile commerce evolves and matures, it will become “just commerce” too.

The next topic of discussion was the concept of the mobile killer app. I have bad news. The consensus of this panel is that there won’t be one, but rather a series of things that move mobile commerce to ignition. One of those things will be ‘context’ – that process which enables a consumer to be served the right offer, payment type, product mix, etc. at the right time. It is a wallet that sort of does all of the thinking and work for a consumer and is able to anticipate what consumers want and why based on past behavior and predictive analytics. Although everyone agreed that doing this effectively means walking that fine line between “magical” and “scary” most feel strongly that using data (with the appropriate privacy considerations) to provide this extra utility to consumers and merchants is what will drive consumers to embrace the mobile commerce experience and really cause it to ignite.

We spent a fair amount of time talking about what merchants want too. What I heard was not at all surprising: standardization. I actually think this comment was referring to the technology that is being contemplated at the POS. Standardizing on mag stripe enabled everyone in the ecosystem to develop with that standard in mind. The debate over NFC versus cloud rages and merchants are left wondering, all the while being approached right and left and sideways with new ideas related to offers, payment types, wallets, data analytics packages – the list goes on and on. It is sort of like the paradox of choice right now – where too many choices means no choice since it is too overwhelming to choose – and the risk of choosing badly is still too high for many merchants given the uncertainty. The EMV mandate further clouds the issue, given the NFC implications that such terminal upgrades will have. We talked a lot and didn’t have any clear resolution to the issue although what merchants will always use as their filter is how to get the most for the least amount of effort and some assurance that there will be a ROI.

There was a free wheeling discussion of data – and how data would be captured and used via the mobile. “Behavior” as the new demographic was an interesting and different thread that was pulled thru that discussion. The notion that people can no longer be categorized by age, gender, and income is something that I think most marketers have abandoned a while back. But mobile (and social frankly) really does enhance the degree to which marketers can now capture data to help them evaluate how people behave and when and how.

Perhaps one of the most interesting discussions was that which was prompted by me asking the panel’s reaction to Jack Dorsey’s statement a few weeks ago that the best technology is invisible – that it basically does what it does when it needs to without anyone really knowing it is there. I wanted to know what aspect of mobile commerce needs to be invisible and what each panelist was doing to make that happen. There was pretty much the consensus that just about everything needs to be invisible. The end state that everyone is working hard to achieve is one where a mobile device simply prompts a consumer at the point of sale with the appropriate card type and the appropriate set of offers as a result of past behaviors and future indicators – without being creepy. I’ll settle for now for actual payment transaction being invisible. Anything that a wallet or an app can do to make payment invisible I am all for.

The hour went by before we knew it and we ended the session with a two part question: what issue would be wrestled to the ground this year – so not a topic of conversation at all (or much) next year and what things we’d still be talking about.

Things off the list: NFC – well for half of the panel, anyway (because it would be hailed as the defacto standard at POS). Wallets were DEFINITELY in the “we’ll still be talking this time next year “camp, as was the cloud, while privacy and security were in the “no need to talk more about it” side.

What didn’t come up and I was sort of surprised didn’t was daily deals (off the list – can they, for the sake of the merchant, die a peaceful death?), business models (on the list – we still need to figure out who and how to make money from all of this stuff), mobile operator role (depends on who you ask and where in the world you’re asking) and Facebook (definitely on the list since they’re just getting started).

Making History

I’ll end my three part series with a paraphrase of an Aldous Huxley quote that the Mozilla CEO actually used to open his presentation at CTIA: “We can decide to either make history or repeat it.” It’s a pretty fitting call to action in this brave and very new world of mobile commerce. The question for all of us – as we contemplate where we each play in this space – is what we should be doing to make history and what things should we be conscious not to repeat.

I’d love your views on this and will share mine in a future piece.