2013.33 | eWallet update

google walletThere have been a number of announcements recently around eWallet and payment apps.

Google wallet for iOS launched late last month.  No NFC on iPhones, so the real focus of the app is to send payments from party to party with email, get local deals, and store all of your loyalty cards on your phone.  The app is a bit underwhelming without payments.  In Canada, we’ve been sending cash to each other via Interac email transfers for years.  They go directly from your bank account; no need to load money into an account, and why would anyone stash cash anywhere other than a bank account?  Many banks in Canada offer Interac email transfers for free and even via SMS in the banking mobile apps.  via engadget.


PayPal released PayPal Beacon last month to simplify mobile payments for consumers.  To drive other options on mobile, PayPal also updated their app with a new service called Payment Code.  This service works with the PayPal mobile app.  At point of tender, the app provide the user a 2D barcode retailers can scan for payment to be transferred from customer to retailer.  The code is apparently readable by retailers on the Discover network or with certain banks.  Sites without a scanner-imager can type a 4 digit code provided instead.    Great to have so many options, but will consumers and retailers alike be able to wade through yet another tender option?  Time will tell.  In the right market and demographic it could work.

pay with amazon

Making Amazon kind of an eWallet for the Internet, Amazon recently released Pay with Amazon.  Using this service, eCommerce retailers can leverage the massive user database and payments engine of Amazon to enable payments on their own website through Amazon.  That means that you can login to an eCommerce website with your Amazon login, and pay the same way you do with the Amazon eCommerce site.   Looking at the economics, setting up payments and leveraging the Amazon infrastructure may seem like an appealing idea to smaller eCommerce retailers initially, but do they really want to let Amazon know that their eCommerce site is growing by leaps and bounds.   Would they like Amazon to have a list of all of their customers and what they buy to expand their database of understanding?  That could be a tough sell.

2011.27 | Getting it all Online

The Future of Mobile Wallets – I’ve been hearing that the NFC mobile wallet will be the new reality any time now since about 2006.  With the inertia behind mobile phones, maybe the time has finally come in 2011/2012.  Some parties have some high hopes, according to the nifty infographics after the jump.  There is also some great information on the characteristics of the offerings put forth by the mainstream processors and carriers, though Square and Paypal were strangely absent.

eGifting at Starbucks – A recent update to Starbucks’ mobile app allows users to send a virtual gift card to another Starbucks card holder, as they can add to other card holders’ balances directly from their mobile.  The plastic gift cards that we throw out have been eliminated for mutual lovers of Starbucks.   Effectively Starbucks has deployed the first practical and widely distributed ‘complete’ electronic wallet.  Card holders with the mobile app can use the app at the POS to pay, and can now pass value to another user.  I’ve actually used my Starbucks card as a virtual currency already.  Last year a friend who owed me $100 and wasn’t able to be in my locale just put a credit on my Starbucks card.  It was cheaper than Paypal, and I was going to spend it at Starbucks eventually.  Who needs Bitcoin?  We can use Starbuck$.

NFC Cash Transfers on Android  – Not to be outdone, and with uncanny timing, Paypal has announced that they have enabled wireless cash transfers from one Android phone to another via NFC.  Very cool if you have a Samsung Nexus S.  Otherwise, we’ll wait on that to find it’s way to other platforms!

Getting Offline Data Online – Online presence isn’t the best at Canadian retailers, and there are many reasons and obstacles that make that so.  A recent post on Retail Technology Blog highlights a new service from Wishpond that allows retailers to get their product data and prices online so that consumers can find the right stuff at the best prices nearby when they do their research.  My search for Asics Shoes, which can be hard to find around my neighbourhood brought up some good options.  I’ve seen some similar sites in the past, including flit.com, and like.com, which allows you to search by color, style and more.

While this is a boon for consumers to find what they are looking for, and helps retailers to get their stuff out there, it will be interesting to see what this sort of price transparency does for retailers.  I’m reminded of MySupermarket in the UK that allows shoppers to compare a full basket to find the best prices based on the big stores in their area.  This will make pricing difficult.  Look to the ability to provide individual pricing and offers to attack competition for bargain hunters in the future.  Understanding what customers want before they search for it will be the next frontier.

2011.06 | Electronic Payments and Gratuities

Different cultures treat gratuities differently. For instance, visiting a Tim Horton’s in Quebec, customers often encounter a broad swath of coins in front of the point of sale unit. Consider this the horizontal approach to the traditional tip jar. It’s a simple visual cue to remind customers to leave their nickels, dimes, quarters, or the odd loonie at the end of a transaction. You don’t see that in Ontario where a a jar or cup are the favoured vehicle.

What becomes of tip jars in the electronic age? If there is no silver (nickel, copper, zinc) passing from hand to hand in a transaction, what happens to the tip jar?  This is a gap in the current move towards electronic payments. In this case, there is not an app for that – at least not one I’ve noticed.

In the past, paying with a card in a lunch line would have been considered pretentious – an inconvenience to the store and the customers in line. Now the pendulum is swinging the other way.  An article today in QSR quoted a shop owner who said that half of clients coming into his store want to use electronic payment. While the electronic option is a tremendous convenience to consumers, there are well documented costs to the store owners to provide this convenience.

The part of these new electronic transactions that has not been addressed in the media or in an electronic manner is the gratuity. While those of us who do not work directly in the service industry probably don’t give it more than a passing thought, those tip jars, and the income they represent are certainly important to the people that help us every day. Without the opportunity to leave a tip, consumers lose a chance to thank those who help us with a small token of appreciation. With the onset of increasing electronic payments, consumers are less likely to throw a few coins of change into the jar or on the pile, as there is no residual change to jingle in their pocket.

Casual and formal dining establishments certainly provide the capacity to tip electronically by providing a gratuity step in the electronic purchase but what about the coffee shops, sandwich shops, and independent burger joints? QSR establishments do not have any sort of capability to enable a gratuity to be passed via an electronic purchase.

What to do?  In some areas, tips can make a difference for employees, and for retailers a small perquisite with which to attract top notch help that can drive more business.  As usage of cash starts to decrease, innovative retailers and solutions vendors will find a way to continue the tradition.  I suggest the following thoughts:

  • Ensure any solution is unobtrusive and passive.  I personally loathe being asked if I want to pay $1 to support charity of the day.  I support various charities on an ongoing basis and applaud their work, but refuse to pay any of these point of sale charity fees on principle as it feels to me like someone is trying to shame me into doing the right thing by having a rosy cheeked teen ask me if I want to plant a tree for $1.  Tipping can NOT go in this direction if it is to be successful.   Any opportunity to leave a gratuity for good service needs to be understated and private.  The slot under the window for Ronald McDonald House at the McDonalds Drive Thru will see some of my change, as it doesn’t judge me.
  • Leverage solutions already in place to ensure ease of use and universal capability.  While it may be tempting to use an iPhone app to tip someone, adding a step to a low value transaction could potentially slow the line, and remove the potential of further gratuities for the server.  If the solution is only an iPhone or Blackberry app, what about the good old plastic card carriers?
  • Make any solution simple and ensure it is operationalized. Today, for small value purchases on credit, cashiers quickly swipe the card and hand it back – no signature required.  Given that card payments are moving to chip and pin in Canada, customers are more accustomed to swiping, dipping, or tapping their own cards.  Why not encourage customers to swipe their own card, and on the pinpad screen provide a single button press to round up to the next dollar with the push of a single button.  Nobody sees the transaction but the client, and the server can be rewarded.  In fact, now the retailer can see who’s really pulling customers into the store.

Tipping is complicated at the best of times.  Are they individual, are they pooled, would servers want to hide how much they get in tips from their employers, or from the tax authority?  While it’s hard to say the direction it will go, it seems inevitable that some electronic mechanism for tipping for low dollar transactions will occur.  Maybe one day it won’t be a trail of coins at the POS, but a tap of a contactless card to a separate reader that says tips – the true electronic tip jar…

2010.12 | New Payment Options

I read a fascinating article today in this month’s Wired.  The Future of Money discusses a myriad of electronic payments systems and formulas including Square , Twitpay, and provides an flowchart comparison of how payments are processed using Credit Cards, iTunes and Paypal.

While the difficulties of security, transaction volume and the necessary usability of a point of sale to maintain transaction speed are huge hurdles to overcome, it is worth watching the latest ideas around electronic payment to see if there is an opportunity for usage in a point of sale environment.  Based on the fact that the first article I wrote on e-payments was in 1995 on Mondex and its ilk, this may never amount to much.  That said, things have changed enormously in 15 years with the rise of the Internet, Social Media and consumers’ generally increased exposure to technology.  Social acceptance can drive a great deal of inertia, so there is no telling what tomorrow’s payment system will look like.

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