Thursday, September 13, 2012

Mobile payment: Apps or services

I waited overnight to make sure I was still bored to tears by the iPhone 5 launch, and yes I still am.

But one thing really struck me as odd. Like, really odd. It's related to the lack of NFC, but not that per se. Instead, it's why. In a brief interview with All Things D at the event:

...Apple Senior VP Phil Schiller said that Passbook alone does what most customers want and works without existing merchant payment systems.

It’s not clear that NFC is the solution to any current problem, Schiller said. “Passbook does the kinds of things customers need today.”

Um, unless imbued with magic fairy dust, apps can't do that. I put a little effort into making sure I know what Passbook is. It is still what I thought, and seemed like it was there to tie into the NFC chip that was clearly coming on this device. Instead, we are stuck with barcode scanning.

There are lots of apps that store multiple cards, plenty of stores using them, lots of people at the airport I have to stand behind while their barcode fails to scan on their phone, use them, etc. It doesn't work well. I know this professionally, not just anecdotally; did you know not all barcode readers can read all phone screens. Important ones to you like Retina iOS devices. So... it doesn't actually work with existing merchant systems, setting aside software development.

A few years back, I actually did some work for lost, lamented VivoTech on what a mobile payment scheme might look like. I sorta hated the end result. There was a lot of insistence on value added features and it ended up being an app again, much like the tedious process of the PIN pad at the grocery store, that insists you scan a loyalty card (or enter a phone number), decide if you want cash back then how much, approve the transaction, etc. etc.

Later, I did something similar for Qualcomm, and realized that mobile payment is one of those areas that offers the great opportunity of the digital era. Not to take an existing interaction and improve it, or inform it with intelligence, or mobilize it, or add other features. No, we can instead make it disappear. Payment can be made not friction-free, but almost or entirely transparent. Forget trying to improve on credit/debit cards, mobile wallets can be more seamless a transaction than cash when you have exact change.

Google Wallet has a promise of the right trajectory. It just works. If your phone has power, you just vaguely wave it at the terminal and semi-magic things happens (sometimes, annoying things like enter a PIN and try again, but it's getting there).

Imagine extending this to invisible payment. You pop into the local bodega, grab a Vitamin Water and a kimbap, then just walk out of the store. Interior location, machine vision, product-level NFC, and other such stuff coordinates to determine that you bought something, have an account, have the money, and charges you (if you don't have the money, it beeps like you stole it before you get to the door). Later, you get receipts, if you want them, via push messages.

There have been demonstration projects like this. Some happened like a decade ago. It's not a crazy dream, but just needs someone* to commit to it**.

The best reality will be somewhere in between. I semi-routinely use some non-bank payment systems like LevelUp, and no one behind me in line sighs when I try to. Even there, where I do have to launch the app and the shopkeep has to wake up their phone to scan a barcode, it takes just a few seconds. When bug-free, it's faster than cards, or cash. Because it does one thing.

Which leads us back to Apple. Compare the recent product launch, even combined with the recently preceding WWDC demonstrations of the new OS to, say... Amazon. Did you notice their recent launch? Yeah, disregard the hardware, and what do we have? A service platform. One with features like better read/watched-to synch between devices, serialized content, the cool x-ray feature that are all designed to be sticky; they make you use (and be more satisfied with) your Amazon experience. On any device.

Disregarding OS sales figures (But Android is winning. A lot.) Google is becoming a ubiquitous information service, that is platform agnostic. I don't do a thing with iTunes movies or music on my Kindle, Android, Blackberry, etc. But I have a Kindle reader, Gmail (Calendar, etc.) and Google Drive on my iPad and iTouch.

No device, and no app is going to solve the problems of tomorrow, truly change the world, or make any vendor of services or hardware a long-term winner. This is why a Facebook phone is stupid, but much of their other work may be brilliant in the end.

We're deeply into the services and solutions end of the game, and everyone with an OS or major service offering -- Nokia, MS, Mozilla, Samsung -- as well as Apple, Google, Facebook and Amazon, need to understand this if they want to be around in five, ten or 20 years.

* Well, several giant organizations. Banks, probably MNOs, device OEMs, payment processors (card companies or similar, like PayPal or Square), etc.
** And, they all have to play nicely together, instead of greedily trying to take it all for themselves. That is probably why we don't have this. Think why you can't use PayPal to check out of Amazon, then extend that.

No comments: