Here are a few stories that caught my attention in the commerce space this week.
Paydiant gets cash to expand its brand-agnostic mobile wallet
White label mobile payment company Paydiant announced at $12 million round of Series B funding this week. The press release describes the company’s edge: “Paydiant works with existing smartphones, POS systems [including those using 2D code and NFC technologies], and payment terminals, including entry-level countertop devices,” meaning banks, merchants and consumers won’t need to invest in upgraded proprietary hardware. “White label” is another angle the company is pursuing: Banks and retailers can integrate Paydiant’s platform into their own existing apps and brand the wallet as such.
While allowing self branding is an excellent — and perhaps unique — sales point, Ryan Kim at GigaOm notes that the bigger, more important advantage of the platform lies in who owns the data:
“The real payoff for Paydiant’s customers is not in providing payments but in helping them protect their own data. Mobile payment systems like Google Wallet require merchants to share their transaction data, which is a gold mine for targeting consumers with ads and offers. By helping retailers hold on to that information, Paydiant helps them own their customer relationship and ensure that a mobile payment provider doesn’t help a competitor target their customers with competing offers.”
Paydiant’s press release says the platform already is in use in several areas of the U.S. but that rollouts are planned to expand “aggressively” through the end of the year.
Creating a “plasticless economy”
Marc Gardner, CEO of PayAnywhere wrote a guest post this week at Forbes, arguing that mobile will be the biggest thing to happen to retail commerce since Bank of America introduced the Visa credit card in 1958. He says the technology, whether it be NFC, mobile wallets, apps, digital coupons or 2D barcodes, isn’t what will change the game but that the glue that holds all those technologies together — mobile — will revolutionize retail.
Here are just a few highlights from his argument:
- “… the phone in your pocket is smarter than anything you see at point of sale. It’s smarter than the cash register, and certainly much smarter than the credit-card terminal.” — Mobile will change business intelligence and business analytics for the retailer and increase intelligence benefits for customers.
- “… as companies refresh their retail infrastructures, you’ll see widespread use of tablets at point of sale. What’s more, the point of sale itself is mobile, meaning the merchant can bring the checkout line to the customer.”
- “Smartphones and many tablets are location aware. … tax rates can be automatically determined using GPS … the location of every transaction can be captured and used in business analytics …”
- Location-based services will change retail for consumers as well: “Imagine launching a retail app from a supermarket and as you shop receiving coupons and incentives — you’re standing in front of the cold medicine aisle and your phone gets a coupon for Kleenex.”
- Mobile will democratize business intelligence and analytics, not only making vast amounts of data affordable for mom and pop stores, but also offering consumers transaction analytics — you can track what you bought and how much you paid — and digital receipt records that won’t get lost or misplaced.
Gardner says that “just as credit, debit and prepaid cards are creating a cashless economy, mobile will create a plasticless economy.” His piece is this week’s recommended read — you can read it in its entirety here.
Apple’s NFC may not fuel a mobile wallet just yet
After compelling evidence was recently uncovered that the next iPhone will include NFC, rumors of a pending Apple NFC mobile wallet for the iPhone5 heated up. This week, Jessica E. Vascellaro at The Wall Street Journal took a look behind Apple’s less-than-ambitious approach to mobile payments, indicating that the Apple iWallet, if you will, may not be imminent after all. Vascellaro reports that Apple’s non-entry into the mobile payment market was a “deliberate strategy, the result of deep discussion last year” and that it’s a strategy that has worked before:
“While Apple has revolutionized a number of industries — from music to mobile phones — it isn’t often the first mover, choosing instead to wait for others to work out the kinks in a market.
“‘Apple is always a comfortable number two,’ says Piper Jaffray analyst Gene Munster, citing its relatively late entries in the MP3 player, smartphone and tablet markets as examples. ‘They let their competitors do their market research for them.’”
While Apple’s expected inclusion of NFC technology in the iPhone5 may not be signaling its entry into mobile payments, NFC won’t be sitting idly in the phone. The AppleInsider staff reported this week that Apple was awarded a new patent called “System and method for transportation check-in” that “describes a system for ticketing and identification via near-field communications on a portable device like an iPhone” — a system the patent refers to at one point as “iTravel.”
Apple’s iTravel system will fit nicely into its recently announced Passbook feature coming in iOS 6, but Christina Bonnington at Wired’s Gadget Lab argues there’s more behind the patent than expanded features for the iPhone, that “a patent like this seems like less of a safeguard for protecting Apple-bred innovation, and more like another tool in the company’s war against other smartphone makers.” UC Hastings law professor Robin Feldman told Bonnington:
“In today’s patent environment, patent holders are throwing rights at each other, asserting tremendously broad applications of the patents and interpretations of the claims. This type of patent is a perfect battle weapon … Large competitors like Samsung and Sony are likely to take direct hits from a patent like this. Smaller startups may take indirect hits, but the real losers are consumers who pay for the patent wars in the form of higher prices.”
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