Monthly Archives: February 2012

Worlds Largest mPayments Partnership?

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http://rfpconnect.com/news/2012/2/27/vodafone-and-visa-announce-world-s-largest-mobile-payments-partnership

This stuff gets harder to interpret every day. My guess is that Vodafone is integrating the “Visa Wallet + Prepaid” products into what Vodafone has built. This enables banks to accelerate adoption, and to “partner” w/ Vodafone for the defacto stored value account within a given market. This obviously simplifies the regulatory issues. Not a bad plan.. but how can you decipher this from the PR? By integrating the Visa Wallet (ex CYBS) they can also extend beyond POS … So key question to ask here.. WHERE is the stored value card held? In the phone alone?

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Monitise/Visa Announcement – P2P transfers?

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http://corporate.visa.com/media-center/press-releases/press1176.jsp

From PR:

… [The Visa] mobile services that allow financial institutions in the US to offer their account holders the ability to monitor account history and balances, transfer funds between accounts

Oh the joys of allowing Visa to push credit transactions on the debit network… if only banks would allow it.  As I outlined in previous blogs below, Visa has no traction with the OCT transaction set in the US. Internationally, the opposite is true as emerging market banks have taken on to OCT (receiving funds via Visa debit network), but will not SEND. .  Visa’s VMT service is thus stuck.. it can’t serve as a remittance service because sending country banks (US/EU) do not participate.  Note from this week’s MA earnings call that Mastercard has partnered with Western Union to address this issue.. a much better approach for cash in.

If you ask Visa for a VMT test account, you are likely to get Bank of the West or some other small bank, with Visa’s promise “it is mandatory and all banks will comply”. It won’t happen.. there are problems with this mandate.. it is after all a debit network (see VMT blog).

What is this announcement.. really??  Visa has put a notification event service on their DPS switch where registered issuers and consumers can receive alerts.. nice of Visa to throw Monitise a bone after they completely messed up their corporate strategy by promising them to make them the “go to market” solution for mobile payments. Monitise is now the “go to” solution for issuers looking for a 3rd party service to check your balance.. or get an alert.

Also… if there were 2 banks that supported VMT I’m sure I could transfer funds with the service as well. Visa… please give us the list of banks that support it.. a demo.. we are all dying to see your progress.

Apple and NFC?

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1 Feb 2012

Apple and NFC? I don’t think so.. my bet is 70% against. Great that Apple can keep us all guessing. Why put a 5th radio in the iPhone? AND hand carriers control of SE. There is just no upside for Apple here. NFC would not enhance their wonderful mobile customer experience…  it may even kill their Apple/App Store/Apple ID/Payment Instrument advantage.

It would be smarter if they would buy Square… payments belong in the cloud… not locked in the phone. All you really need at a POS is an Irrefutable ID. In a Square scenario, Apple could leap frog everyone in customer adoption and enable every iPhone owner to pay with their voice and GPS location ( Apple has payment instruments tied to every iTunes account). The gap in this scenario is merchant adoption, existing merchant processor agreements/hardware, and retailer reconciliation (if multiple processors). Apple, if I were you I would sit down w/ Square, FirstData, TSYS, … and see what could be done. NFC requires coordination of too many parties.. a late follower would be a much better place to be. Your top risk is that consumers will buy phones based on mobile wallet. Your short term strategy? I pay with my iPhone today (see pic). 

Don’t get me wrong, NFC can work.. but the carriers have proven inept at managing a platform business which would incent the participation of many businesses, allowing all to make money. Instead they operate as a toll bridge, but expect to take a portion of the goods in transit. If you operate as a toll bridge you are a dumb pipe… period.  It just does not take much intelligence to run a control business, sure it is complex to build the bridge..  But it even more complex to coordinate the logistics of the world’s commerce. The carriers focus on control is killing the prospects for NFC’s success, as they attempt to act like an orchestrator (requesting a % of goods in transit) but have the ability of a toll collector.

Commerce will find another path… one of least resistance. This is what Apple should do as well. NFC is just a radio… one whos standards are largely controlled by banks, mobile operators and card networks. Why would retailers want to participate here at all?  We should not act to enrich the complexity of payment networks, or wireless ones, but rather form new networks that are retailer and consumer friendly.  Bluetooth, wifi, gps, voice, facial recognition, sms, .. all can do the job NFC does.  We will not see harmony here over the next 20 years, particularly as the only payment instrument in a mobile wallet is a 300bps+ credit card.

Why is Japan successful? because they have a dominant carrier that built a business model..  same in Singapore and Korea… in the rest of world.. chaos will reign until someone delivers retailer and consumer value.

http://www.appleinsider.com/articles/12/01/30/mastercard_acknowledges_it_needs_apple_to_bring_nfc_payments_into_the_mainstream_.html

Related Blogs

 

Update 3 April 2013

My bet on next version of iPhone? Broadcom’s BCM43341 chip 

Broadcom has launched the industry’s first quad-combo chip. The BCM43341 combines NFC, Wi-Fi, Bluetooth and FM radio on one chip and, says Broadcom, “offers OEMs unmatched size, power and cost advantages.”

A second new product is a single card solution that pairs a BCM20793 NFC controller as used in the Google Nexus 4 with an 802.11ac (5G) WiFi radio and is aimed at high end mobile phones and devices.

Does that mean the next iPhone will have NFC? yep.. but not in the way we think about it today.

 

http://tomnoyes.wordpress.com/2011/02/03/isis-platform-ecosystem-or-desert/

http://tomnoyes.wordpress.com/2011/12/05/isis-delay/

http://tomnoyes.wordpress.com/2011/10/26/apples-commerce-future-square/

http://tomnoyes.wordpress.com/2011/01/26/apple-and-nfc/