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Google Takes a Bite of the Apple

Posted by Karen Webster on 22 February 2011 | 5 Comments

Google and Apple made news last week when they announced their respective plans to help publishers monetize their content. Less than 24 hours after Cupid worked his magic on Valentine's Day, Apple began a subscription payment service that lets customers pay for content that magazine publishers make available via the Apple app store. There are only two strings attached: Publishers have to offer their very lowest subscription rates, and Apple takes a 30% commission on the sale. (Related Article: Will Apple Get Us to Wave At the Point of Sale?)

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At the Epicenter of the Debate over Mobile Payments and NFC: Smart Card Alliance Recap

Posted by Tim Attinger on 18 February 2011 | 1 Comments

Greetings to the PYMNTS. com crowd from the shores of the Great Salt Lake, where MPD is at the epicenter of the debate over the future of mobile payments and NFC (near-field communication) chip adoption in the US marketplace. The event is the Smart Card Alliance annual conference, the venue is the Marriott City Center, and the scene is spectacular.  Outside the striking snow-capped peaks of the Wasatch Range march endlessly into the distance, while inside the NFC debate marches endlessly on through the day and into the night.  Everyone here --from payment networks to chip technology players/integrators to transit agencies to mobile network operators—have a stake in the outcome.  Everywhere you turn in the capacity-crowd ballroom you can hear this question repeated:  Is this the year NFC finally takes off?
 
Yes, many of us have been asking that question for years, as the hockey-stick graph for mobile NFC payments projections continues to move out to the right, the payoff for all those years of hard work on specifications and standards still somewhat elusive.  As those of you who are regulars on PYMNTS.com are aware, the challenges for igniting a platform proposition like NFC issuance and acceptance are numerous (Check out David Evans' Ignition Series).  So what makes this year different? Why is it that, in addition to a chilling wind and the promise of snow, there is a whiff of hope in the air for NFC ignition?  Well, perhaps it has something to do with a new corporate attendee on the floor of this year’s event – a newly-minted payments and marketing joint venture named ISIS.  (Related Article: Will the Mobile Payments JV Trounce MasterCard and Visa?)
 
The session’s keynote opener began with a 1-2-3 punch of marketplace perspectives on the potential for NFC adoption.  MPD kicked it all off with a perspective on the marketplace landscape for mobile commerce adoption and ignition, centered on the premise that a host of interconnected ecosystems are converging to claim a white space in the middle of the commerce landscape where consumer commerce will be generated, executed, and sustained with mobile as the core platform.  MPD also showed how it just might be that, in the time it’s taking NFC to catch on at the point of sale, a host of IP- and remote-enabled payments solutions are racing to fill in the space that the NFC mobile value proposition hopes to claim.   Next up came George Peabody of Mercator, bringing a wealth of market research on the potential drivers of mobile NFC adoption, including 1) growth in consumer interest, 2) growth in operator and handset readiness, including the rumored provision of NFC capabilities in the upcoming iPone 5, and 3) the declining costs of NFC deployment and the completion of standards for the application. He concluded with a summation that NFC still faces the classic chicken&egg adoption challenge of any platform business, but added that there’s now a much bigger egg in the picture. (for those of you interested in reading more about this challenge, check out the Mobile 206 Lecture from PYMNTS University.
 
And with that the headline act, ISIS, took the stage in the person of Jim Stapleton.  Jim opened with an amusing video on the primary marketplace issue ISIS was hoping to solve in a hilarious replaying of the George Castanza “Fat Wallet” episode.  Jim then went on to describe that ISIS would be an open-standard mobile wallet solution that will facilitate private label ISIS credit transactions through NFC at ~7 million retailers using the Discover network.   Pointing to consumer research that showed a high degree of interest in adoption and use, the solution would begin by targeting purchases at everyday spend categories like grocery, gas, convenience, and discount retail ---places where consumers transact 2-3 times per week.  ISIS also sees transit as a significant opportunity with 1-2 transactions per day in the category – the kind of frequency that the company believes will get consumers up the curve on familiarity with and use of the solution.   Offers, locator services, and transaction alerts/records are also part of the complete ISIS product package. (you can read more about it on the official company website here: http://www.paywithisis.com ).  Consumers would enroll and activate the service where they buy their mobile devices and services, beginning with registration of ISIS account credentials and partner credentials into the ISIS open-standard wallet.
 
As you might imagine, that subtle mention of “open standard” generated quite a bit of interest.  While the core solution would include provision of a wallet and account credentials during the device set-up process at new purchase, the company indicated that it would support over-the-air personalization of non-ISIS payment credentials downstream.  Several members of the audience asked if this meant that consumers could use their current card solutions (examples: Chase Visa, Citi MasterCard) with ISIS. The preliminary answer was “yes,” although the issuer and ISIS would need to have a relationship first.
 
And therein, surely, lies the open question of the business model that will govern the relationship between mobile carrier and financial institution. For those of you keeping score at home, that would be the same business model (read “revenue share”) tug-of-war that has dogged these two parties in mobile NFC discussions since the very beginning.  Although, presumably, the major US carriers will be coming to that next round of talks with millions of NFC-accepting merchants, millions of NFC-enabled phones,  and hundreds of thousands (if not millions) of consumer wallets in the ISIS solution.  Only time will tell if the ISIS approach will ignite the NFC marketplace. But for now on the floor of the SCA conference in Salt Lake City, the debate – like the Wasatch mountain range outside—marches on.

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Pineda v. Williams-Sonoma Stores, Inc.: Something Anyone Who Takes Credit Cards Should Worry About

Posted by Thomas Brown, Carla Christofferson, Shirin Bakhshay on 17 February 2011 | 0 Comments

(Article originally featured on O’Melveny & Myers LLP website)

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Loves Me, Loves Me Not: Mobile

Posted by on 14 February 2011 | 0 Comments

Valentine's Day has come and gone, but the weeklong "Loves Me" or "Loves Me Not" series on PYMNTS.com is just beginning. The second stop for the Market Platform Dynamics team is social commerce: loves me or loves me not?

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Loves Me, Loves Me Not: Rewards

Posted by on 14 February 2011 | 3 Comments

Valentine's Day has come and gone, but the weeklong "Loves Me" or "Loves Me Not" series on PYMNTS.com is just beginning. The fourth stop for the Market Platform Dynamics team is 'Rewards': loves me or loves me not?

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Loves Me, Loves Me Not: Open Platforms

Posted by on 14 February 2011 | 0 Comments

Valentine's Day has come and gone, but the weeklong "Loves Me" or "Loves Me Not" series on PYMNTS.com is just beginning. The final stop for the Market Platform Dynamics team is 'Open Platforms': loves me or loves me not?

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Loves Me, Loves Me Not: Debit

Posted by on 13 February 2011 | 1 Comments

February 14th marks a day that is symbolic of Hallmark cards, heart-shaped boxes of chocolate, teddy bears and occasionally, love. PYMNTS.com has asked the team at Market Platform Dynamics to participate in our Valentines Day series looking at the payments industry and providing a "Loves Me" or "Loves Me Not" perspective. The first stop on our romantic journey is Debit: loves me or loves me not?

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Formulating an Ignition Plan

Posted by David S. Evans on 7 February 2011 | 0 Comments

If you want to start a platform business in payments -- or in any other area that involves the coordination of multiple stakeholders -- you'd better have an ignition plan. Once you start the business, you are facing a countdown for achieving critical mass and launching the business successfully. If you haven't reached critical mass by the time the clock has counted down, your business will have imploded. You face a complex series of decisions to secure ignition.

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