TW Commentary: Why Apple Pay makes Mobile Commerce incredibly easy

Apple Pay will be as transformative for payment as Google Maps was for location services. Now anyone with an app can sell things.

What Google did is provide easy access to the best location and map data in a simple, easily integratable way. Without Google Maps, we wouldn’t have companies like Foursquare, Yelp, etc. They all would have needed to build their own mapping infrastructure or rely on a more expensive / less accurate one. With Google they just used the best possible solution, for free. It suited both sides. Google got a lot of data out of this symbiosis and achieved what it always wants: more data. And app developers didn’t have to worry about location data and just build the best possible services around it.

Apple just did the same for payment. By integrating a payment services on the OS level, they basically are taking care of the whole, extremely complex process that is required to authenticate payments. Now any developer out there can just use the Apple Pay API to integrate payment into their own application.

This can have tremendous consequences. One of which should be a very scary proposition for Amazon. The lesson here can be derived from another Ecommerce company: Alibaba. What Alibaba did is offer a way for millions of manufacturers to sell to anyone in China and then the whole world. They offered those manufacturers a way to present themselves and they took care of the infrastructure. Additionally, they managed the trust issue, by keeping the money until the customers received their satisfactory product from the manufacturer / merchant.

Simply put, they created a market where there was none before. There’s huge potential for the same thing happening with the introduction of Apple Pay. Imagine the proposition of building an application as an author of books and just selling your own content, without anyone in between, directly to your clients. Authors with a large enough audience could use this to establish a new source of revenue. Building those kind of applications isn’t expensive anymore. Most of the technology is already made and available as open-source. The hardest part is not reaching the audience, it’s managing the payment process. With Apple Pay this is not an issue anymore.

TW Reads: Mobile Payments

An excerpt from our reading list on the mobile payment industry.

As we’ve mentioned before, we’ve been involved in the mobile payment industry for quite a while. Since we’re keeping track of the most interesting things happening in the industry, we thought there is no reason why we shouldn’t be sharing some of the most interesting reads or announcements in this field with our readers.

Mobile Payment Today – Mobile wallets: will value actually drive adoption?

Despite the collective efforts of some of the largest companies in the world promoting their supposedly superior products, just 16% of mobile device owners have used their phone to make an in-store payment. That’s not exactly a ringing endorsement.

In light of possible announcement by Apple next Tuesday, it’s prudent to analyze why the collective effort of so many companies across continents and nations left so much to be desired when it comes to building a significant mobile payment solution. In an unusual turn of events, Mobile Payment Today – being so often just a press release portal for a similarly named industry – provides exactly that: a poignant analysis.

Link: Mobile Payments Today

Re/Code – Here’s How Amazon Might Take Over Brick-and-Mortar Retail

Broadly, they said the world’s largest online retailer aims to make it easy for a wider array of brick-and-mortar shops to sell on Amazon while giving Amazon shoppers another way to receive orders on the same day they are purchased.

Nothing has stirred up the mobile payment industry quite as much in the recent weeks as Amazon’s announcement to dive deeper into payments. Not only did they release a device and service that is a direct competitor to Square, Paypal and many others, they’re also attempting to do what they always do: compete through a better price. The device is cheaper, the rates are lower. Especially the last part will make it hard for store owners to resist the Amazon offer.

But there seems to be more than that. Jason Del Rey over at Re/Code has been a keen observer of everything Amazon. It almost feels as if he is for Amazon what Kara Swisher for to Yahoo. Always watching, always acquiring a new source. His analysis concludes that not only is Amazon going after Paypal’s business, it is actually all a ploy to get many of those brick & mortar shops onto their platform, enable them to participate in the glorious experience of ecommerce and enhance Amazon’s ability to make same-day deliveries of every-day products. This, obviously, seems somewhat far-fetched and yet not at all unlikely considering the Bezosnian appetite.

Link: Re/Code

Eater – OpenTable testing mobile payments

Restaurant reservations website OpenTable has officially launched a new payment feature on its mobile app that works at over 45 restaurants in New York City.

While OpenTable isn’t a huge operation in Germany, some restaurants still use it. It feels more like a gimmick here. Mostly because the way restaurants operate here and in the US is so different.

In the US on the other hand, OpenTable is a huge thing and they charge a lot, too. It became so bad that many restaurant owners are comparing it to the Mafia and having to pay protection money to the mafia. Effectively, if you’re not on the platform, people are significantly less likely to visit the restaurant. On the other hand, if you’re using OpenTable, they are suffocating you with the cost of using the service.

In this light, you might not hear that many restaurant owners rejoicing after the announcement that OpenTable is experimenting with payment solutions. Especially if you consider that while there are many, many other services in this field, not many are as likely to succeed in it as OpenTable. If they do, restaurant owners will only have to transfer a bigger cut to the service.

Link: Eater

Week 172

Igor is kicking off the Week Note season with a deep dive into a mobile payment lab that we helped start last year.

Some time in early September, we began a conversation about establishing a Mobile Payment Lab of some sort for a client with whom we had an ongoing relationship for roundabout three years now. In fact, we collaborated on the project with our friends from Edenspiekermann, who have been working for the same client since 2009. Our roles on this project have always been complimentary and I can’t imagine a smoother collaboration process with anybody out there.

Scope of the project

The task was both clear and complex: the goal was to provide an external setup for a strategic approach to finding and prototyping ideas for future features and products. The client is a technology company with a banking license and an established contender in the payment-processing field. They have also invested heavily into the field of mobile payment and been enjoying a good run in the market building mostly white-label solutions for various corporations around the globe with a focus on Europe and Asia.

Product development so far has been approached via market demand (i.e. clients asking for specific features) and a management team that has deep understanding of the field. What had been lacking was a comprehensive roadmap for how to explore future developments without waiting to react to an immediate client request. Basically, the goal was to be able to shape the market instead of only being shaped by it.

Labs are rarely successful and can’t operate as startups

People who know me well also know that I’m not necessarily a believer in the Lab idea. Both internal as well as external Labs usually have one major setup problem and that is lacking the ability to appropriately transform their work back into the larger organization. That doesn’t mean that the work in those labs can not be interesting or innovative. They often are. Even if corporations staff labs with internal people. Given the opportunity to break certain habits and working under different (not necessary more relaxed) conditions, people tend to produce very different results and that’s great. But if those results aren’t in any way usable to their colleagues who are busy churning away at the “normal stuff” which is also known as the thing that currently pays the bills, than all of the work that is being produced in a lab is usually fairly pointless.

Another down side of labs is the fact that they are usually handled as some sort of pet project by well funded members of the management board. That is to say that they are not necessarily strategic and often fairly political. By being used politically – labs require people, people equal money, money equals power – they become even less able to transfer their work into the rest of the company, because the kind of rivalry tends to make people less open about adopting the work of “the other guy”.

At the end of the day, the goal for whatever is created inside of those labs is to become a source of revenue for the whole organization. This is crucial. Otherwise the life expectancy of the new structure is minimal.

  • Generating creative ideas and building presentable and maybe even sharable prototypes can be fun. But more often than not it results in services and products that do not resemble in any way something that can be build and maintained by the company itself. The idea and the prototype are about 10, maybe 20 precent of the work.
  • In most corporations, the approach can rarely resemble the one of startups. I know, this is largely different from the advice that most people in my field will give. The real-politics of a modern day corporation will never allow for the kind of flexibility that the VC funded startup ecosystem can provide. I consider advice that ignores that fact as harmful, because it ignores one core principle of how the funding of startups works. While there are certainly exceptional funds that have a better success rate, usually 8 out of 10 startups fail. Meaning that only 20% of extremely well funded and nurtured ideas generate enough return on invest for the investors. It also helps that VCs don’t actually use their own money for taking larger bets. The same is just not possible for a corporation that attempts to find new sources of revenue. To allow 8 out of 10 ideas to fail, they would have to allocate too many resources and thus potentially harming the overall organization. The only way for corporations to part-take in this process is by creating their own fund and hire good talent that will manage the cash allocated to that fund wisely. This is being done by most blue-chip companies, but differs significantly from the lab structure.

The most important piece of the puzzle for setting up a lab is not how many or what resources will be allocated to it, but how the work will be transferred back into the organization. We have spent a significant amount of time on deliberating how to do this right. While I’d like to share more useful advice, this is as far as non-contextual insight will get you, unfortunately. Those kind of projects seem only on paper or in TED-like talks as something that can be adoptable by reading an article or applying one rigid framework. While learning as much as you can helps, this is all about the individuals involved, with whom they talk, who they go to lunch with, who there allies are and who their opponents. It probably helps more to play chess from time to time too.

Our role

Our role was both a strategic one – in which our knowledge of the client and the market came into play – as well as a product-oriented one. Together with the Edenspiekermann Service Design team, we found a way to work that was both feasible for us as well as the client.

We chose a short iteration cycle. We aimed for 4 weeks between new iterations and ended up on a 5 week cycle. One cycle consist of establishing the scope of inquiry aka defining the work. We should have started with a maximum of two different tasks. Instead we had four. Which was definitely a strain for the whole team, because it put us under more pressure than is good for morale and quality of the output. Mostly, it worked out fine, but we definitely are planing to change that piece of the process in the next round. That being said, pulling some longer evenings in which everyone churns away also brought the team closer together. Which is immensely valuable for Labs in general. While those are, as described, not startups, they do work similarly on an interpersonal relationship level.

While having a mainly strategic position, I oscillated between different roles heavily. At certain points, I felt a bit like a Creative Director, other times I was happy about deep dives into research, connecting the dots between previously read articles, designing print prototypes and having the excuse to buy a Little Printer in the process.

It is important to have clear roles in Labs, but it’s equally important for everybody to be part of everything. Small teams and narrowly defined exploratory missions do have the luxury of actually getting everybody’s input. That’s what they can excel at. We, thankfully, managed quite alright from the start.

At some point, I will have to share a few insights about payment and especially mobile payment. After being involved in this topic for almost three years continually, we accumulated a fair share of experience and good judgement about the industry and opportunities in the field. Both locally – Germany is always a special case for that –, but also internationally. As part of the ongoing project, I have been learning everything there is to learn about iBeacon as well as payment solutions in Africa.

What we read this week (22 November)

Our favorite articles of this week. Have a great weekend.

Articles of the week

  • What Screens Want
    Brilliant web essay by Frank Chimero, and not only because he features James Burke and The West Wing. I bet that this one will come up in a lot of conversations in the next months.
  • Prada Revolutionaries
    “Bright Green has become the left's version of right-wing transhumanism: an excuse to not solve today's problems, because tomorrow's technology will fix them for us.”
  • Tom Armitage » Driftwood
    “Driftwood is a talk I gave at Playark 2013. It was meant to be a talk about leftovers (the theme of the conference being ‘reclaim’), and about Hello Lamp Post. In the writing, it turned into a broader overview of my own work – on six years of projects around cities and play.”
  • Meet The ‘Assassination Market’ Creator Who’s Crowdfunding Murder With Bitcoins – Forbes
    “Assassination Market, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations.”
  • Ross Andersen – Humanity’s deep future
    "When we peer into the fog of the deep future what do we see – human extinction or a future among the stars?"
  • Bitcoin As Protocol | Union Square Ventures
    “There is no other widely used protocol in the world today that accomplishes this: with bitcoin anyone can make a statement (a transaction) and have this be recorded in a globally visible and fixed ledger.”
  • Content economics, part 4: scale | Felix Salmon
    "It’s almost impossible to overstate the importance of the CMS when it comes to the question of who’s going to win the online-publishing wars."
  • InMoov » Project
    "Here is “InMoov”, the first life size humanoid robot you can 3D print and animate. You have a 3D printer, some building skills, This project is for you!!"
  • Apple and Google Maps, and Defaults | Matt Mullenweg
    “If Microsoft did this a decade ago we’d call for the DoJ to reopen their investigation. Apple has the best phone, best tablet, and in many ways the best operating system — we should not give them a pass for this blatantly self-interested and user-hostile stance.”
  • Instagram and Youtube — Benedict Evans
    "WhatsApp and Instagram are not in different categories – they're direct competitors for time and attention." – This spot on.

What we read this week (12 Apr)

On neurofiction, the evolution of mobile computing, therapy for internet multitaskers, a writing tool designed for web-bound text and the growing trend for disappearing messages.

Quote of the week

I was alive when people thought it was just amazing to have a fax machine. Now I’m alive and people think it’s amazing to still have a fax machine.

Bruce Sterling

Articles of the week

What we read this week (27 Jul)

Our reads this week delve into mobile identity, our feelings towards our work stations, the great gadget-addiction question, a future of 3D printing, and a promising deal between BitTorrent and a musician.

Quotes of the week

I think the space between a person and a typewriter is better than the space between a television and its viewer.

David Banks

Articles of the week

  • Rebekah Cox: Mobile Identity
    An important, thoughtful post by Quora’s lead designer on how identity and your phone go together. It’s one of those articles that will be referred to for the next few years.
  • Cyborgology: Against The Minority Report Computer
    David Banks passionately disagrees with the future vision of computers in Minority Report, because it fails to take into account our emotional attachment to our work stations. Here he describes why this vision undermines our relationship with desktop technology.
  • The Atlantic: Are We Addicted to Gadgets or Indentured to Work?
    In a response to a recent New York Times article on the popular topic of gadget addiction, Alexis Madrigal finds that it is not our use of technology that is making life increasingly stressful, but our relationship with work.
  • Rhizome: The Shape of Shaping Things to Come
    In this article, Adam Rothstein takes the reader onto a journey into the future, where ‘physibles’, 3D-printed objects, have become normality. He develops a mindblowing outlook, extrapolating the current social phenomena of hackers, early adopters and retro-fetishists, and brings them into a place where limits are set by time and creativity rather than resources.
  • GigaOM: DJ Shadow becomes first artist to get paid by BitTorrent
    In an industry first, DJ Shadow struck a deal with BitTorrent Inc, the filesharing company. For every download of a DJ Shadow bundle including some songs and a special software – on which the details are somewhat fuzzy at this point – BitTorrent and DJ Shadow share the revenue generated through that software. It’s an interesting step forward, and surely all eyes in the music industry are on this deal.

What we read this week (20 Jul)

Our articles of the week talk about brands in science fiction, startups in the Philippines, mobile vs mobility, predicting violence with algorithms, and empathizing with machines.

Quotes of the week

The invisibility of something [doesn’t imply] its lack of being.

Werner Herzog

What if the “posthuman” isn’t being a cyborg but instead being a cell in a giant’s body, helping to enable a vast consciousness that you’re never aware of and that is never aware of you?

Alan Jacobs

Articles of the week

  • The New Yorker: A Word From Our Sponsors
    Science Fiction got it right again. It’s interesting to consider, in light of brand power struggles at the London Olympics, what impact marketing and corporate culture are having on everyday life. This is a good example of how speculative fiction can bring us to question such situations and ask ourselves: do we want that?
  • SGEntrepreneurs: The Philippine startup scene: Asia’s best kept secret?
    An in-depth article on the current state of the startup scene in the Philippines, particularly the cultural and economic factors that influence the choice of field for new companies.
  • David Armano: The Future Isn’t About Mobile; It’s About Mobility
    Throwing yourself out there isn’t enough anymore – this also applies to the mobile web ecosystem. David Armano recommends that we get acquainted with patterns in modern digital behavior and advises us to learn how to differentiate between mobile and mobility.
  • LA Times: Computer analysis predicted rises, ebbs in Afghanistan violence
    A group of friends, who happened to be computer experts, decided to make something out of the endless data on war in Afghanistan released by WikiLeaks in 2010. Based on the data they extracted by using simple code, they managed to predict fluctuations in the country’s violence.
  • Olivia Rosane: the ROOMBA whirrs for thee
    Reading through the @SelfAwareROOMBA Twitter feed has an uncanny effect: you begin to empathize with a machine. (A vacuum cleaner, no less.) Olivia Rosane does a beautiful job of analyzing the mechanics that cause us to experience genuine emotion in response to tweets from this lonely and perceptive character, and how a Twitter feed comes to take on a personality we can identify with.

We’ve put this week’s reads into a Readlist for your mobile perusal. Enjoy!

What we read this week (10 Feb)

A week that prominently featured outcry over how web services handle our data, a Q&A with Foursquare founder Dennis Crowley and some thoughts on the Death of the Cyberflâneur.

The reason the Web took off is not because it was a magic idea, but because I persuaded everyone to use HTML and HTTP.

Tim Berners-Lee about the social process of trying to get everyone to use the same standards

As the room lit up with projections of Call of Duty footage, Nyan Cat animations and sample-heavy bass, I couldn’t stop thinking that this show was among the signs that “Internet culture” is now just culture.

Anthony Volodkin about a recent Skrillex show

  • RWW: Foursquare CEO Dennis Crowley on What He’s Learning From Twitter and What’s Next
    Dennis Crowley speaks about the future of Foursquare and how his service will become more mainstream.
  • The Next Web: Path’s Address Book Mistake Shows an Apple Problem Path has been caught uploading their users’ entire address books to their servers as soon as one installs their app on an iOS device. The outcry was and is big. Rightfully so. Still, there is a larger issue to be discussed here. It’s how we started accepting privacy-related questions in a way that Facebook, Apple and Google want us to see them. Time to demand from the services we use to be transparent upfront about how they intend to use our data.
  • Pinterest is quietly generating revenue by modifying user submitted pins
    Pinterest, while officially still in beta, sees tremendous growth. Now they are even started earning money, which is not objectionable. The way they chose to start monetizing is quite questionable, though: They alter user submitted links to include referral codes, thus collecting affiliate kickbacks – without making that obvious to their users.
  • NYTimes: The Death of the Cyberflâneur
    We share Evgeny Morozov’s opinion on Facebook’s “frictionless sharing.” But services like Tumblr and Twitter make us think that the cyberflâneur is alive and well.
  • Slate: How the hot ad agency fell from grace.
    “I come to bury Crispin, not to praise it.” Slate’s Seth Stevenson, never a fan of the ad-world-darling Crisipin Porter & Bogusky, rips them apart for their work on VW and Burger King, which have dropped CPB in 2010 and 2011.

What we read this week (7 Oct)

This week our picks for your weekend reading deal with Google and its competition, mobile marketing, Starbucks’ branding genius and a deep essay about the open web.

Our picks of the week for your weekend reading:

  • Monday Note: Google’s “Interesting” Week
    Google finds itself increasingly surrounded by companies who rival between each other, but also with Google itself. Mostly, because Google is extending its reach into different markets, especially with Android. Read the full article for an overview about Nokia, Samsung, Intel, Amazon and many more.
  • How Starbucks Transformed Coffee From A Commodity Into A $4 Splurge
    Although we’re not big fans of Starbucks coffee (too second wave), we can appreciate the branding work behind it. This interview with Stanley Hainsworth, creative director for brands like Nike, Lego, Starbucks and Gatorade, provides some refreshing thoughts about classic branding.
  • Study: Mobile advertising will generate $1.2B in 2011
    A new study from eMarketer predicts mobile advertising will generate $1.23 billion in the United States this year.
  • Adrian Short: the end of the web as we know it
    “The promise of the open web looks increasingly uncertain”: an excellent, in-depth essay about the meaning & necessity of the open web, and insisting on controlling our own infrastructure.

You can see all our reading recommendations (including the archives) at “What we read this week“.

A few thoughts about Ambient Intimacy

Ambient Intimacy. A small observation about how we share our location, how we want to interact with the information that we are sharing and why the future of LBS is not bound to the small screen of our smartphone.

A couple of days ago, I made this observation on Twitter and Google+:

Observing with interest how quite often communication with my friends begins with an inquiry about my/their location.

Peter Rukavina commented on G+ that his was the entire premise of Plazes. He is right. It’s also the premise (even if not the entire) behind most Location Based Services these days. And not only those. We tend to share location based information on social networks as well. Be it through posting our location in itself or – to bring an example – sharing a photo of the food we’re eating and attaching this particular social object to a location.

My entire reply to Peter’s comment was this:

To a certain extent, it is the premise behind many services we use these days. Foursquare, twitter and even Facebook. But despite the fact that we are the most connected generation ever, it seems that we still do not posses the ability to share certain information in the way that helps others to have constant proximity awareness, nor does take away our privacy. That is, of course, bound to the ability of our mobile devices to transmit information in a way that is not bound to a specific location (check-in). Google Latitude is an attempt to solve just that, but it feels awkward and our hardware is no where close to be able to do it constantly of course. The other thing is that this kind of information is not really well kept in a certain application. I do not want to open up Google Latitude to check up on my friends, I want just “to know it”. Maybe it would just suffice to include that kind of information into our contact lists. At least for the people who I talk to regularly. But that’s some unfinished thinking…

I’ve been thinking ever since about this. It seems to me, as if it’s a problem with two components:

  • How do we want to consume certain information?
  • How do we share certain information without having to put in too much energy in the process of actually sharing it?

All of this brought me back to what Leisa Reichelt described as Ambient Intimacy back in 2007 (while discussing the benefits of Twitter):

Ambient intimacy is about being able to keep in touch with people with a level of regularity and intimacy that you wouldn’t usually have access to, because time and space conspire to make it impossible.

This is still relevant and it becomes even more relevant with the increasing of amount easily shareable information. Back then it was Twitter, Facebook and Flickr. And maybe MySpace. We have many more services that we use these days. We apparently do not mind to share all that information as long as it creates a certain value (it’s different for different subsets of people) for us. But – and this is very much a gut feeling – it seems like we are reaching a peak of how many services we can use at once to share specific information. That’s why we tend to connect many services to make sure that the information spreads as easily as possible. I, for example, really wanted to use Foodspotting as soon as they released their Android app. After a while, I stopped, because on top of checking in on Foursquare it was just not feasible.

Speaking of checking in. Do you notice how it’s still somewhat socially awkward to do that? Every time you are not going out with fellow nerds, people will make a joke about it. Why? Sure, that was the case with many services. People made fun of Facebook and Twitter users and we all now how this story ended. The problem with checking in is that it requires a certain behavioral pattern that is almost anti-social towards the people around you. Unless everybody is doing it, of course.

The current solution of sharing your location is only iteration towards more seamless solutions. This is not news. In fact, Google Latitude enables us to share our location without having to purposefully reveal it. It’s passive, it’s ubiquitous. Which is good and bad at the same time. Unfortunately, it negates its benefits by draining the battery of our mobile computing device. To some extent, this is the reason why we still use check-in based solutions. And then there is the privacy issue. But lets not even get into that right now.

Apart from sharing this kind of information, another issue is how to consume it. From time to time, I do follow up on the check-ins my friends are making on Foursquare. It feels, tho, as if we actually want to be aware of that kind of information without giving it our full attention. Ambient Intimacy.

One solution would be to integrate location based services more tightly with the OS of our mobile computing devices. Integrating it into the environment that will always require our attention. But that’s not enough. I’m experience a certain fatigue of being enslaved to the small screen of my smartphone. I want this information to flow around me.

No, this is not a plea in favor of Augmented Reality. Especially not after listening to Kevin Slavin picking it apart. The core problem with Augmented Reality – at least as the term being used right now – is that it requires the full attention of the user. As I said, I don’t want to stare at the screen of my device all the time and apparently not that many other people are comfortable with the current solutions either. Or how many people do you know who use Layar on a regular basis?

Then there is of course the case of the abundance of screens. There are many screens in our life and some could be employed to display the kind of information that we will help us establish Ambient Intimacy with the people we want. Russell Davies wrote about this just recently, but as always it is BERG who done some research an prototyping in this field (they call it Incidental Media).

Media surfaces: Incidental Media from Dentsu London on Vimeo.

As a scenario, this is not completely unfeasible. With the abundance of computational resources and the increasing connectedness of physical objects, we can make this reality.