i-mode Phones Take Their Final Bow (Plus, PayPal, Starbucks, Shell & Apple Pay)

To most Americans, the news earlier this week that that Japan’s i-mode service will cease to exist won’t cause much of a stir. Looking at the name of the product alone, we imagine that the average consumer might wonder if Apple is pulling the plug on something or other.

But i-mode is not an Apple product — though it did arguably teach Apple a valuable lesson or two, but more on that in a moment — and never quite got big traction anywhere outside of Japan, which is why its passing may not be much mourned.

But the announcement out of Japanese mobile maker NTT DOCOMO that it will stop selling mobile phones that operate with its i-mode internet service by the end of this year (minus a handful of phones for elderly users) due to the increased difficulties in creating the actual hardware stunned a number of mobile payments veterans who remember a time when everyone wanted to be *just like* i-mode. They were regarded as the pinnacle of mobile payments and mobile phones.

So what made i-mode so special?

Ahead Of Its Time And Contemporaries

If one jumps in the wayback machine and parks it at the turn of the millennium, the gears were already turning in innovators’ heads about making mobile about more than a device that could make phone calls and send SMS messages. While there were myriad ideas about how to connect increasingly ubiquitous devices in people’s pockets to the web, in the East and the West two roughly parallel but different approaches emerged.

In Japan, that was all i-mode all the time, launched by NTT DoCoMo. Instead of creating a proprietary language for mobile sites — aka WAP — i-mode used a proprietary technology that made it possible for simple sites to work on devices built on top of the i-mode platform.

Said simply — users could do more with i-mode powered phones webwise than they could do with their wireless web enabled counterparts in the U.S. Part of that was smart design, but part of it was smart business.

Changing The Revenue Model — And Courting Developers

I-mode not only built a better mobile web experience – it gave app developers a reason to get on board. Part of that was a better revenue sharing agreement. Before their service launched, mobile purchases were only really possible with carrier billing — i.e. users bought the good or service and the charge for it appeared on their phone bill.

I-mode introduced a revenue-share business model and built a content charging mechanism right into its service. This meant that content providers could easily monitise their services (sports scores, weather, games, ticket booking, etc.) as it was consumed.

I-mode also made a concerted effort to court developers and introduced the world to the idea that mobile devices + developers = more functionality valued by consumers. That was a lesson it took the rest of the mobile world nearly ten years to catch on to.

The Rest Of The Week In Mobile

PayPal And Siri Play Nice

Coming soon to an iPhone or iPad running iOS near you is the abilty to tell Siri to make a payment with PayPal. According to some late night blogging, PayPal users running said OS will be able to make payments merely by commanding Siri to do it for them. According to PayPal, users can now send and request money via a voice command with Siri in 30 countries.

Apple Pay Hits The Web

One month in, Apple Pay on the web is in the top 5 online payments technologies. That figure comes care of SimilarTech, whose data tracks 30 billion webpages each month. According to their numbers, Apple Pay is the 5th most popular payment platform used by the top 10,000 websites.  PayPal was #1 by a pretty large margin. We don’t know from “popular” but we did produce a report on “Buy Button” penetration on the top 1000 web sites just last month. Of the five we looked at – PayPal is on nearly 70 percent, Amazon on 10 percent and the rest trail with sub-5 percent penetration. Check out The PYMNTS report on Mobile Buy Buttons here.

Starbucks, Still Killing It At Mobile

Another round of earnings figures out last week confirmed that Starbucks remains much, much better at mobile payments than just about anyone else. According to the most recent figures out, mobile payments now account for a quarter 25 pecent of all transactions processed at Starbucks locations nationwide. Also succeeding are Mobile Order and Pay transactions representing which are now 6 percent of Starbucks’ total transactions and rising. As of September 2016 that figure had ticked up to 7 percent .

“Approximately 3,300 of our stores are handling 10% of their orders at peak through Mobile Order and Pay,” COO Kevin Johnson told investors during the coffee chain’s Q4 earnings call. “In 600 stores, Mobile Order and Pay represents over 20% of orders at peak, triple the number from last year.”

Impressive.

Shell Pays At The Pump (With PayPal)

Shell and PayPal are teaming up to eliminate having conumsers get out of their cars to pay for fuel. Coming soon , drivers will drive up to pumps and select the kind of gas as well as pump location using the Shell mobile app and a QR code on the pump itself.

Once the payment is processed, a receipt will be sent to the phone to confirm the purchase — and to prevent people from making off with a full tank of gas at no charge.

The technology was successfully trialed by both companies in 2013, while PayPal has already established a strong mobile payments process in the United Kingdom.

Mobile Payments At The POS- Smoking, But Still No Fire Study Says

The good news for mobile payments peeps — the tidal wave of wallets and “Fill In The Blank Pays” has pushed mobile payments at the physical POS into double digit growth territory that is set to double year over year.

The not so good news?

Still not dealing with a majority of consumers yet — and probably won’t be a for a while. According to the latest data out of eMarketer, 38.4 million Americans 14 and over will have used their mobile phones to pay at the point of sale at least once in the preceding six months in 2016. That’s just 19.4% of US smartphone users. We’ve been tracking Apple Pay Adoption now for two years, and if anything, it’s plauteaued at something like only 1 in 20 consumers using Apple Pay in stores when they have the opportunity to use it.