Is the secret to mobile payment adoption location, location, location?
Mobile interaction (payment, ticketing, ID, marketing etc) is supposed to be the ultimate demonstration of free movement, expression and of a simplified lifestyle. After all, you only need your phone, no cumbersome wallet, cards etc. So how ironic is it, that such an expanding and explosive market could be driven by the oldest of all price-to-purchase rules, namely location, location, location?
Don’t know what I’m talking about? Let me give you a couple of examples. For a start, after announcing the curtailing of its plans for a stand-alone mobile wallet app, Square last week launched a new feature on its Square Order app that makes heavy use of geo-fencing. You can place a standing order for your morning coffee from your local coffee house, but instead of picking it up at a set time everyday, your proximity to the coffee house triggers your order. When you’re five minutes away from it, you cross a geo-fence that sends an alert to the coffee shop telling it to begin to pull your order together. But geo-fencing isn’t the only element that the company has been trying out. It has also been looking at BLE as a proximity sensing tool and using it as a method of detecting when other Square users are nearby.
On Tuesday, Square also updated its Square Cash iPhone peer-to-peer payments app so users can send money to other Square users in the same room, without entering a phone number, email address or searching for a name in contacts. Basically, all of the Square Cash apps in the same room detect one another, allowing you to transfer money with a single click. The app works by connecting directly over BLE to other iPhones. So instead of sending a payment to an email or phone number, Square will give you the option of paying people who are in same room or general vicinity – assuming they also have iPhones with iOS 8 and the Cash app. And before anyone points out that it’s Apple-oriented once more, Square Cash’s other payment methods are available on its Android app, so there’s a good chance this feature will come to Android devices as well. I have to be honest, that as someone over 30, I don’t really get peer-to-peer payments for small transactions such as bill splitting. I hate to say it, but this is the moment that I still use cash. I know, right? What an admission and what a place to admit it. So far, industry observers maintain there are a limited number of use cases for these kind of proximity features, though it’s not hard to imagine it expanding to other systems and creating an ever expanding market.
Certainly there are more and more cases each week of apps that are centred around proximity marketing or mobile payments either being released or finding new merchants, retailers or other service providers that are signing up to their services. For example,
Dash Software LLC, a mobile payment platform for restaurants, recently announced their expansion to Chicago after launching in New York City at the end of 2013. Customers use the Dash app to pay their bill, split checks, tip and more, using the credit card stored in the app. Customers inform their server when they arrive that they will be paying with Dash, which is integrated into the restaurant's POS. In another example, US-based Dunkin’ Donuts are also to test a mobile ordering platform that will allow customers to order and pre-pay for menu items and then pick up at selected locations. “For our guests, there’s an opportunity to improve order accuracy and speed and our restaurants have an opportunity to improve throughout, which is something we’re excited about,” said Justin Drake, the Dunkin’ Brands public relations manager. “We launched the app as a way to enhance our guests’ experience. With the app, guests can easily find their nearest Dunkin’, use their phone to pay either in-store or in the drive-thru, claim special offers, and send mobile gift cards to friends and family.” Opportunities in this area really appear to be growing, if news such as this create concrete results.
Norwich-headquartered Proxama certainly thinks that proximity marketing, as well as NFC and BLE markets are expanding in the US. They are looking beyond the UK to North America where they are setting up shop and take advantage of the interest in these new technologies. “We’re on the cusp of widespread NFC technology adoption, so now is the perfect time to bring our expertise into the North American region,” said Proxama’s new General Manager for North America, Pascal Caillon. “By tapping into our deep-rooted experience in Europe, a region that has been driving a lot of the mobile commerce activity to date, we are confident that we can bring similar success to the North American market. By connecting physical and digital, we are able to help merchants, brands, and banks uncover opportunities for mobile loyalty programmes, targeted offers and deeper customer relationships they never thought possible.”
And it’s not just traditional mobile payment players who are trying to get in on the act. Last week, it was leaked that Facebook may also be developing a payment feature through its Messenger app that allows friends to engage in peer-to-peer payments. (Again - is this an age thing or a geographical thing?). Using a tool called Cycript, computer science major Andrew Aude was able to take a look at unpublished code being worked on by the Facebook team, which would allow users to send money to each other as easily as they would a photo. It follows hints from the social media giant that it is looking to push into the mobile payment space. On its second-quarter earnings call, CEO Mark Zuckerberg said the company was doing work on payments, and the recent hiring of the former president of PayPal was seen as another sign the company is serious about the payment arena. The code for a payments system within Facebook was first uncovered by security researcher Jonathan Zdziarski last month, but Aude took it one step further by accessing it through the Cycript tool. Cycript allows users to modify and play with the code in apps. Payments will initially just be individual-to-individual, according to a note in the code discovered by Aude, but group payments look to be enabled eventually. "In the short term, we will only support single payment attachment. Multiple payment attachments will be supported in the future," the note said. Facebook said it did not comment on rumour or speculation.
On the company's most recent earnings call, Zuckerberg said the company would not "compete directly" in the online payments space, and would instead be a "partner" to others in the sector. But analysts suggested the Messenger payments system could lay the groundwork for a bigger plan. "Ultimately, Facebook already has a large and very engaged active user base, and it will now integrate additional transactional services to ensure that it rapidly acquires users' payments details," Enrique Velasco-Castillo, digital economy analyst at Analyses Mason, was reported by CNBC as saying. "(This) can be coupled in turn with a more comprehensive mobile payments, advertising, and location and proximity marketing portfolio."
But it’s not all happening overseas. Last week was also the week that the UK mobile payment company, Zapp, announced a wide range of retail partnerships that will work to introduce Zapp from 2015 onwards. Five of the most customer-focused and innovative retailers across a range of sectors are leading the way – Asda, Sainsbury’s, House of Fraser, Thomas Cook and Shop Direct – have chosen to support Zapp. The company said that would mean that millions of customers will have the ability to via mobile payments. They may actually be onto something here. Other major retailers and billers partnering with Zapp include: Clarks, Dune, Spar, Best Western Hotels (GB), Starstock, QD Stores, Anglian Water, Bristol & Wessex Water, Sutton and East Surrey Water. Support for Zapp from the charity sector through Oxfam and Charities Aid Foundation has been previously announced. Additionally, many of the largest payment providers in the UK including Verifone, Klarna, Touch Go, Siemens, Apogee International, Vix Technologies, Global Charge, Just Desire and RSL – are announcing that they will work with Zapp to bring mobile payments to market. This broad group of retailers, billers and payment providers will roll out Zapp to more than 35 million customers and represents the largest coalition of retailer support for a new payment method ever announced in the UK. Peter Keenan, Chief Executive of Zapp, commented, “Today is a hugely significant milestone in the history of money in the UK. At last the promise of a truly mobile and digital payment method will become a reality, meaning easier and more secure checkouts for millions. It’s amazing to have the support of such well known retailers. Together with our other partners this means millions of consumers will be able to shop at tens of thousands of merchants up and down the UK at launch.”
For the first time that I can remember, Bill Gates had a thing or two to say about mobile payments (Apple Pay in particular). In an interview last week to Bloomberg TV, the ex-Microsoft CEO , philanthropist and gazillionaire said, “Apple Pay is a great example of how a cell phone that identifies its user in a pretty strong way lets you make a transaction that should be very, very inexpensive. So the fact that in any application, I can buy something, that’s fantastic. The fact that I don’t need a physical card anymore, I just do that transaction, and you’re going to be quite sure about who it is on the other end, that is a real contribution and all the platforms, whether it’s Apple’s or Google’s or Microsoft’s, you’ll see this payment capability get built in. That’s built on industry standard protocols, NFC, and these companies have all participated in getting those going, Apple will help make sure it gets to critical mass for all the devices.”
And so, to finish this week with a little bit of business. I have been contacted via the Contactless Intelligence Facebook site by a reputable company with the following message, “I am the IT Director at XXX and am searching for an innovative solution that will track visitors around our innovation parks, give staff access, permit restaurant payments and link with our AD for staff details and MS Dynamics CRM. Please contact me at XXX if you can help with a solution or point me in the right direction.”
I have the gentleman’s details and from what we can see (and we looked), it appears to be a genuine request. I am happy to pass on his details to anyone who got to the end of this editorial and is interested in pursuing this business further. Just drop me an email.
Until next week,
Steve Atkins
Contactless Intelligence
![]()
