Paypal | Cheryl Waller

Death By A Thousand Cuts? Google Wallet’s Plan To Take On PayPal Leverages Chrome, Android, Google+, Gmail & More

May 15, 2013 by Sarah Perez Leave a Comment

Flying under the radar amid a flurry of announcements from today’s Google I/O developer conference is the bigger news of how Google is stepping up its efforts to compete with online payment giants, such as PayPal. It plans to do so with a revamped checkout process for the web, mobile web, within mobile applications running on Android, and more.

It’s a proposed death to PayPal by a thousand cuts, leveraging everything from Chrome to Android and even Gmail. What Google hasn’t quite worked out yet is how all this will tie together in the long run, but you can see the plan beginning to form.

#1: Google Wallet On The Web: Storing Payment Credentials In Chrome

Let’s start with the browser, the de facto home for online shopping.

It’s not news that the checkout experience is broken. Shopping cart abandonment is one of the biggest pain points for today’s merchants, mainly because their websites have traditionally offered only cumbersome and tedious forms for shoppers to fill out in order to make a purchase.

As noted during today’s keynote, one of the hardest things you can do on the web is try to buy something. The process takes around 21 steps, the company explained. Of course, Google is exaggerating here a bit – billing and shipping details are usually the same, but Google counted each field (street, ZIP, etc.) twice.

That being said, things are even worse on mobile. Google notes that shopping cart abandonment on mobile devices is now an outrageous 97 percent. Again, that seems high (here’s the source for that figure), but the trend Google is illustrating with these slightly puffed up figures is not.

For comparison’s sake, Monetate’s data put global cart abandonment at around 82 percent as of Q4 2012. The company has been seeing increases in cart abandonment – which had been around 60 percent over the past several years – due to an increased number of shoppers doing research on mobile phones and other devices. As they reach the point of checking out on mobile, they’re now more likely to give up and move on because of the increased difficulty of the experience on mobile’s small screen, combined with retailers’ failure to roll out mobile-optimized experiences even as percentages of mobile shoppers continue to grow at record rates.

A number of startups have been attacking this challenge in various forms – mobile apps featuring universal carts, native m-commerce storefronts, mobile optimized payment flows, one-click mobile payments, in-stream payments, and more.

Google’s plan? Leverage Chrome.

Chrome is already the world’s most popular browser, with more than 750 million monthly active users today, up from 450 million just a year ago. Now it will begin baking a speedier checkout experience into its browser by syncing your billing information and other details within Chrome.

What that means is that when you visit a website using the Chrome browser, including the Chrome mobile browser, you’ll automatically be offered a prompt with your billing profiles. Chrome can then use autocomplete functionality to fill in information for you, such as your address, ZIP code, credit card info and more.

This functionality is being introduced via a new requestAutocomplete API, which Google describes here as “an aspiring web standard that will allow users to bypass pages of form fields with an imperative API for requesting details the browser knows.”

Google says this decreases the number of steps in the checkout process from 21 to just 3.

Overall, it’s a worthy attempt at solving the problem with online checkout, but it still suffers from some potential obstacles to broader adoption: Website owners will have to implement the functionality (the API) on their end, and unless this “aspiring” web standard becomes an “actual” web standard supported by all browsers, its impact would be limited.

This feature is still in its early days, but it’s designed to be open. Presumably, the company would still want to at least offer support for payment information retrieved from users’ Google Wallet accounts, if not actually require it. (Theoretically, payment info could just be saved directly in Chrome or any other browser without the need for a Wallet account.)

#2 Google Wallet On The Web (Um, Again): Google Wallet API

While the above describes what will first be a Chrome-only feature to start, Google Wallet has already found a way to support the web and mobile web through more traditional means.

In addition to supporting online checkout through Wallet, last fall, the company launched a Google Wallet API, which allows e-commerce website owners to support checkout via Google Wallet on mobile devices. This is independent of the browser or mobile operating system, however, making it more like an alternative to the PayPal button.

It’s a bit confusing because with the new Chrome autocomplete functionality, it seems there will be some overlap between the two. Site owners would end up implementing two APIs to be fully supportive of Google users: one to speed up checkout through automated form-filling in Chrome (likely pulling payment credentials from a user’s Google Wallet), and another if they wanted a Google Wallet button on their site that users could click to instead be walked through the Google Wallet checkout flow.

Which is better? How will these two tie together? For now, Google can’t say, only noting that it’s still “early days” for the Chrome autocomplete API and it’s probable that Google Wallet will be supported in some way.

But nothing is definite yet.

It’s indicative of how Google needs to bring its separate teams together in order to tell a more cohesive story about payments. Rumor has it that the Wallet team has been too “siloed,” which has caused some issues. (See part #5 below, for example).

#3 Going Wallet On Android: Paid Apps, In-App Purchases & Now, the Google Wallet Instant Buy Android API

Android is the world’s most popular mobile operating system, so it only makes sense for Google to take advantage of that fact to pull in more users’ payment information. After all, today’s users are already using Google Wallet to purchase paid applications for Android devices, as well as in-app purchases, so why not extend Wallet to support purchases of physical goods, too?

That’s just what Google did.

With the new Google Wallet Instant Buy Android API, merchants and developers selling physical goods and services (as opposed to virtual goods like those sold in mobile games), can now offer their customers 2-click checkout.

At launch, the company has signed on a number of new partners, including Airbnb, Booking.com, Expedia, Fancy, GoPago live POS, NFC Task Launcher, Priceline, Rue La La, Tabbedout, Uber and Wrapp.

The service ties in also with Google+, allowing users to register and sign in to the apps, similar to Facebook Connect, and then tap to checkout without the need to enter billing or shipping information.

#4: Google Wallet in Gmail: “Attach” Money

Another vector in the fight to topple PayPal is person-to-person payments – like paying the babysitter or paying your dad the money you borrowed, for example. Digitally savvy folks today still largely turn to PayPal to make this happen.

Google’s plan here? Leverage Gmail.

It’s simple and ingenious really. The familiar email “attachment” icon has just become another onboarding experience for Google Wallet. With the Gmail update, the service’s 425 million+ users can hover over the attachment paperclip icon, then click the $ icon in order to “attach money” to their message.

Of course you’ll need a Google Wallet account first.

For now, the feature is only available in the desktop version of Gmail, but it will certainly come to mobile in time.

#5 Google Wallet In Real World? (What’s Plan B If NFC Never Wins?)

The only area where Google is lacking a solid strategy is in real-world payments – an area where competitor PayPal has been ramping up quickly in recent months. PayPal has been working with nearly two-dozen nationwide retail chains, including Home Depot, Jamba Juice and more, to be integrated into their point-of-sale systems. It has separately announced integrations with point-of-sale and hardware makers like NCR, gas station and convenience store-focused Gilbarco Veeder-Root’s point-of-sale system, coin-counting kiosk maker Coinstar, and more.

Google has been trudging along with its NFC-based Google Wallet app. The app uses technology whose broader adoption has been slow to pick up here in the U.S., in part due to a lack of support from Apple, as well as swirling questions as to how much of an improvement tapping your phone at point-of-sale really has over a card swipe in the long run.

Google had plans to launch a plastic “universal” credit card that would allow users to switch between their preferred payment methods on the fly while still using a physical card at point-of-sale. For whatever reason, the company scrapped those plans just ahead of Google I/O.

Combined, all of the above areas on their own can’t be considered a PayPal killer by any means. But as they become more tightly integrated over time (assuming Google can get its teams together to focus on the bigger picture beyond their own product’s development and focus on the global stage), you can see a viable threat to PayPal starting to shape up.

Filed Under: Google, Search Engine Marketing Tagged With: android, Blogging, ecommerce, Facebook, Google, google wallet, io2013, mobile, Mobile payments, payments, paypal, search engine optimization, SEO, Social Networking, TC, Tldr

The Mobile Payments Fustercluck

September 9, 2012 by Leena Rao Leave a Comment

It seems that every week there’s a new company, startup, or financial institution that is launching a new way to pay from, issue rewards, or power transactions from a mobile phone. The question that always lingers in my mind when I see yet another mobile payments service pop up—how many more ways do we need to pay for a physical or digital product via a mobile device?

Matrix Partners’ Dana Stalder, who was the former COO of PayPal, says that he is introduced to at least one mobile payments startup a week. Matrix Partners previously invested in mobile payments company Zong, which was acquired by PayPal in 2010. “There has been a lot of innovation around payments over the course of the last three to four years. But with recent growth in smartphone penetration, there has been a huge pop in the number of mobile-related payments companies,” Stalder explains.

Thomas Husson, an analyst covering the mobile payments for Forrester, agrees. “Mobile is opening a bridge between a physical and digital worlds because these devices are in everyone’s pockets,” he explains. “Mobile payments is a very fragmented industry there are so many different subcategories when it comes to payments.”

You may know the major players in the mobile payments race, but what is it that will give staying power to these competing technologies? There’s Square, which offers both a consumer application to pay for goods, as well as a merchant platform to accept credit card payments via your mobile phone. PayPal wants in with both its digital wallet offering, as well as PayPal Here, which like Square, allows merchants to accept credit cards via a dongle that attached to a smartphone. Add to that Square competitors VeriFone and Intuit GoPayment. iZettle, mPowa, and a Square clone from the Samwer brothers are all trying to take Square’s scale to Europe.

There’s NFC-based Google Wallet, and every credit card company, including American Express (via Serve), Visa (V.me) and MasterCard (PayPass). Isis is a carrier-led joint venture between AT&T, T-Mobile and Verizon that aims to create a mobile wallet in devices. The players above all want to create the one mobile wallet to rule them all (as does PayPal), which would allow you to pay for physical and digital transactions via your mobile phone.

Just listing them is exhausting. And we haven’t even touched the ever-growing number of startups that are playing in the space as well. Jumio wants to power payments for retailers, and is eying a play in the mobile wallet space. BrainTree and Dwolla are also trying to take on the payments industry with its mobile offerings for developers and online businesses.

Also worth mentioning: Kuapay, Placecast, Boku, AisleBuyer, ZooZ, LevelUp, Groupon, and Shopkick, which all are dipping their toes into the mobile wallet pond in various ways.

Then there are the retailers. Starbucks has its own mobile payments app. A number of retailers, including Target and Wal-Mart are banding together to form their version of a mobile payments platform.

Of course, Apple’s Passbook could be entering this arena. Passbook doesn’t seem to be a full-fledged wallet-yet — it hasn’t even launched. But airlines are already starting to integrate with the technology to allow users to access their boarding passes.

While not all of the players mentioned above are directly competing with each other, it’s clear that they’re after a very similar end goal – making offline payments more seamless.

Stalder agrees “Offline payments, which represents trillions of dollars has generally been a closed platform but the mobile phone is changing this.” He believes that as larger players look to expand their services and offerings to consumers, we’ll see a consolidation in the space, and some of the smaller startups will become acquisition targets. “It’s going to be hard to outwallet Google or PayPal.”

Case in point: PayPal recently bought Jumio-competitor Card.io, which allows developers to capture credit card information by using a smartphone’s built-in camera. Earlier this year Google bought mobile payments tech company TXvia. Groupon recently bought point-of-sale technology company Breadcrumbs and mobile payments startup Kima Labs.

I think it’s safe to assume that there will be more than one clear-cut winner in the mobile payments/digital wallet race, but we will see consolidation. From the user point of view, a consumer is going to get frustrated very quickly if he or she has to use 10 different apps to pay for items.

So who’s going to win?

One argument is that it’s going to be the company or startup that can reach the most amount of consumers, in a short amount of time, with the least amount of friction. As Stalder predicts, “he who owns the consumer relationship holds the power.”

But scale itself amongst consumers isn’t the only defining factor in who is going to come out on top, contents Husson. He believes the winner’s offering is going to be all about convenience. “The mobile payments company bring value to consumers and merchants beyond just payments. Before payments, during payments and after payments,” he says.

Already, existing services like Square are becoming more full-service, expanding beyond the transaction for consumers. Square has bet heavily on loyalty features for consumers, including hands-free payments, digital punch cards and more.

SoftTech VC’s Jeff Clavier, who was an early investor in Card.io, thinks it’s not a one winner takes all opportunity. He thinks that banks, credit card companies, and others will have separate solutions.

While consumer adoption is key, you can’t discount the value of the merchant relationship as well. I believe that the company or startup that commands the best value for both consumers and merchants will become the clear-cut leader. That’s easier said than done. Square is trying to corner the market on local and independent merchants, but also just landed a massive deal with Starbucks. PayPal has now integrated with a number of big-box retailers, including Home Depot and Jamba Juice, but it’s unclear how these point of sale implementations are faring (and if consumers are actually choosing to use PayPal over swiping their credit cards). Google faces the whole NFC-challenge, and until the technology becomes more widely adopted, it’s a tough sell for merchants.

Clavier highlights the challenge that payments companies face in building good relationships with both developers and merchants. “Your fees have to be competitive…it’s a struggle for a big company to get scale, and it’s daunting for startups.”

That leaves Apple, which could be a major player in the mobile wallet/payments race if the company invests in creating such a product. The reason why Apple is such a threat in mobile payments is because it has an enormous amount of personal data (by way of credit cards from iTunes purchases). According to recent reports, Apple has 400 million active accounts in iTunes with credit cards.

But Stalder maintains that “Apple is not a payments company and will never be a payments company.” He adds that “Square has a good shot at this but needs to figure out the consumer side.”

I agree that Square is positioned well—but PayPal is fighting hard to nail this (and already has well over 100 million active users of its traditional digital payments product), and could leverage this to target both merchants and consumers. entrants like Apple could be game-changing.

Square and others need to figure out both sides of the marketplace, because a mobile payment is ultimately a more seamless transaction between a merchant and its consumer. Whomever cracks that ecosystem unlocks trillions of dollars of value — and a ton of competition.

Disclosure: My husband is an employee of Groupon.

Photo credit/Flickr/Stevendepolo

Filed Under: Google, Search Engine Marketing Tagged With: Blogging, Facebook, Google, paypal, search engine optimization, SEO, Social Networking, square, TC

Google / PayPal Sales Exec Tyler Hoffman Joins Virtual Currency Rewards Startup ifeelgoods

April 30, 2012 by Josh Constine Leave a Comment

ifeelgoods has a brilliant idea — letting you earn Facebook Credits for ecommerce purchases or following a brand on Twitter — but now it has to convince big companies and shopping sites to adopt its tech. That’s why it’s hired former Google Managing Director of Commerce Sales and leader of PayPal’s enterprise sales team Tyler Hoffman to be its new Senior Vice President of Sales.

ifeelgoods is starting to snowball, as CEO Michael Amar says 92% of customers returning to ifeelgoods and increasing their budget by 250%. Of my years in tech, this is one of the most promising startups I’ve seen. Because virtual currency is so cheap to distribute and is highly valued by some consumers, ifeelgoods could become a big disruptive force in how businesses acquire customers.

This is how the $8 million-funded ifeelgoods microincentive model works. The startup buys Facebook Credits from the social network in bulk. These Credits normally cost gamers $0.10 each, and are used to buy virtual goods, power-ups, and play time in social games, as well as music, movies, and other digital media. Possibly the world’s most popular virtual currency, more and more people want Credits, but many don’t want to pay for them because, well, they’re just for fun.

Ifeelgoods finds companies with specific actions they want people to take, and lets them incentivize these actions. So you could get 50 Credits for making a $50+ clothing purchase on Gap.com, 10 for installing a new Facebook game, 5 for signing up for Universal Pictures’ email list, or 3 for following the Dallas Mavericks basketball team on Twitter. Once you’ve completed an action, you approve the ifeelgoods Facebook app, and the Credits are deposited into your account.

Clients pay ifeelgoods for the Credits plus a fee. Walmart, Netflix, 1-800-Flowers, and Coca-Cola are a few more of its 70+ clients, but Hoffman is tasked with getting more brands on board. His 16 months at Google, seven years at PayPal, and three more doing sales for CNET should help.

Here’s a few reasons I believe in the model: distributing Credits is cheaper than mailing coupons, small incentives are more attractive than discounts since they don’t expire can be spent anywhere that accepts Credits, they’re viral since users get a chance to share news of being rewarded, and ads offering Credits get high click-through rates than those offering traditional discounts.

Not everyone’s willing to pay money for social games and digital media. But with ifeelgoods, they can pay with their time, contact info, or choice of where to shop.

Filed Under: Google, Search Engine Marketing Tagged With: Blogging, Facebook, gaming, Google, ifeelgoods, paypal, search engine optimization, SEO, Social Networking, TC

The Threat And Opportunity Of Mobile: How Physical Retailers Can Fight Back Against Amazon

December 26, 2011 by Leena Rao Leave a Comment

As online retail sales continue to soar, brick and mortar stores are seeing margins dissipate. Online holiday sales are expected to grow 15 percent to $37.6 billion this season while retail sales in physical stores are only expected to increase by 3.8 percent to $469.1 billion. Best Buy recently reported a 29 percent drop in profits because of discounts and sales of top grossing electronics. The fact is that the electronics retailer was probably forced into offering deeply discounted deals in order to compete with e-commerce giant Amazon. And it doesn’t help that Amazon is now offering discounts to consumers on any product purchased via its price comparison mobile app, another huge blow to physical retailers.

Brick and mortar retailers need to figure out a way to compete with Amazon and other e-commerce giants that doesn’t eat into margins. Deals and coupons simply aren’t enought. And as former Apple retail chief Ron Johnson has said, retail isn’t broken, stores are. So how are retail stores going to survive? While mobile may be the technology e-commerce companies are using to jab physical stores, it is also the technology that may save these stores. Personalization and data are the two key factors that could save retail stores; and the vehicle by which these technologies can be utilized is via the mobile phone.

Why Mobile?

2011 has been pegged as the year of mobile shopping by both technology companies and retailers. Now more than ever consumers are carrying around phones that enable them to access apps, discounts, price comparison information, payments mechanisms and more. comScore recently reported that two-thirds of all smartphone owners performed some sort of shopping activity on their phones, including comparing products and prices, searching for coupons, taking product pictures or locating a retail store.

In fact, slightly more than one in three purchasers used their smartphone to make a purchase while in a store. When they enter retail stores, these consumers are carrying their mobile phones and using these devices.

E-commerce companies have been quick to capitalize on this trend while brick and mortar retailers have not caught on in quite the same way. As mentioned above, Amazon is incentivizing customers to use its PriceCheck mobile app. Customers can walk into a brick-and-mortar retailer, use the app to scan the barcodes of a desired product, and access Amazon’s prices for that product. More often than not, Amazon’s prices are lower, and if a customer places the item into the app’s virtual basket, a 5% discount will be applied to the product within 24 hours. Price Check app users can use the discount on up to three products.

Simply offering coupons aren’t going to be able to combat Amazon’s tactics, because not only are these deals going to eat into retailer margins but these incentives can’t necessarily bring shopper back to a store repeatedly.

Brick and mortar stores need to figure out not only how to drive traffic, but also how to increase the purchase amount and conversion rates, create loyalty and return customers and more.

Cyriac Roeding, founder of location-based mobile shopping app Shopkick believes that the mobile phone is key to the future of commerce for stores. In case you aren’t familiar, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a participating store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions. These rewards can be used towards purchases.

Rodeing says that the role of the physical store will change in the future. What online stores cannot offer (which brick and mortar outlets need to realize) is the one-on-one personalization and personal treatment that a physical store with employees can. And in-store shopping brings immediate gratification because a customer can take home the item with them as soon as the purchase is complete.

And mobile is how you bring personalization back to the in-store purchase experience. The challenge, he explains, is to make this experience worth the consumer’s time and money.

eBay is also trying to help physical retailers drive traffic into stores via its Red Laser barcode scanning apps, which now integrate in-store listings, prices and availability from Milo. As eBay’s Jack Abraham (who founded Milo) says, brick and mortar retailers need to be where their customers are, and that decision-making is now happening on phones.

“There are clearly companies that are positioning themselves as destroying brick and mortar retailers but we’re positioning ourselves to be an ally for the retailers,” he says. eBay recently launched a new campaign, where consumers who spend $100 at Toys “R” Us, Dick’s Sporting Goods and Aeropostale using PayPal, will get a $10 voucher to spend in store.

How To Personalize The Experience: Data!

How brick and mortar stores are going to be able to personalize and make the in-store shopping experience unique is through data, in my opinion. It’s no longer about creating a mobile web site or offering coupons; the experience centralizes around making customers feel as if they are being treated like a VIP just by walking into a store. And how brick and mortar stores are going to do that is the same way Amazon was able to create a business out of personalized e-commerce.

Some retailers are attempting to use video and heatmaps to try to see how people shop, what they are buying and more. But this data is limiting because while stores can figure out what is working when it comes to placement, advertising, and marketing of products in-store, retailers still don’t know who is buying and how to get them to return.

Personalization really gets interesting with transaction data. Shopkick recently teamed up with Visa to allow consumers a way to receive rewards points for retailers at the point of sale when they use their Visa credit cards. This is part of closing the redemption loop. The redemption loop starts when a consumer sees an ad or an offer for a merchant, and is completed when the consumer makes a purchase and that purchase can be tracked back to the offer. Thus far startups, tech companies and credit card companies have started to use transaction data as a way to close the redemption loop and drive future purchases but this is relatively new to brick and mortar retailers.

With the Shopkick deal, brick and mortar retailers could see what items a consumer purchased and deliver discounts, and special offers based on purchase behavior. And this can be delivered via the mobile phone.

Of course, this would all have to be an opt-in experience for shoppers considering the privacy implications. But many consumers use the personalized experience of Amazon when buying books, electronics and others items, so why not replicate this in the physical world?

This means more partnerships with credit card companies like Visa, MasterCard and American Express. Online payments giant PayPal also sees this as a huge opportunity for physical stores. PayPal announced an in-store payments technology both via mobile and point of sale systems that is currently being tested on a ‘friends and family’ basis in a national retailer in two markets.

The opt-in offering will include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out. Users will have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. While exact details are still unclear, it sounds like PayPal will use location and transaction data to help in-store retailers improve the experience for consumers.

PayPal is partnering with a at least 20 known top-tier retailers, which will be unveiled in 2012. We hear about the initial retailer as soon as this year.

PayPal’s Anuj Nayar tells me candidly that retailers are desperate for this offering. “The fact is that most retailers have no idea about customers until they are leaving the store and that comes down to data.” He says PayPal is working with in-store retailers to create a suite of tools and technologies that help use technologies to level the playing field when it comes to data.

One thing that is clear is that retailers need to jump on the mobile, personalization and data bandwagon very soon. Online retailers are only getting more aggressive (i.e. Amazon), and it’s only a matter of time before online retailers start to ramp up their existing personalization offers even more.

Roeding says that physical retailers who doesn’t focus on mobile in the next six months are going to face a major problem in the next year. But it goes beyond just created a dedicated site and mobile app. Brick and mortar retailers need to find a way to be in as many mobile applications as possible, such as ShopKick, PayPal, and eBay, where potential customers are deciding what to buy and where.

Abraham echoes these thoughts, explaining that retailers need to be part of search results, especially in mobile search results. “If they don’t, they risk getting lost in the age of the post-pc era,” he says. eBay is building out its own predictive data capabilities with the recent acquisition of Hunch, and we can expect more data-focused features to be rolled out soon.

As for which brick and mortar retailer is going to be the first catch on the mobile and data wave when it comes to in-store shopping, my bets are on Wal-mart. The retailer has been particularly aggressive on the technology front, buying social and mobile ad targeting company OneRiot, and social media startup Kosmix. Wal-mart is already experimenting with a number of in-store mobile services, including things like NFC, barcode scanning and in-store geo-fencing.

There’s no doubt that 2012 could be a pivotal year for brick and mortar stores. But they need to act fast and start providing a unique experience for customers or risk being left in the dust by Amazon.

Filed Under: Google, Search Engine Marketing Tagged With: amazon, Blogging, ebay, Facebook, Google, paypal, search engine optimization, SEO, Social Networking, TC

The Threat And Opportunity Of Mobile: How Physical Retailers Can Fight Back Against Amazon

December 26, 2011 by Leena Rao Leave a Comment

Why Mobile?

Brick and mortar stores need to figure out not only how to drive traffic, but also how to increase the purchase amount and conversion rates, create loyalty and return customers and more.

And mobile is how you bring personalization back to the in-store purchase experience. The challenge, he explains, is to make this experience worth the consumer’s time and money.

How To Personalize The Experience: Data!

PayPal is partnering with a at least 20 known top-tier retailers, which will be unveiled in 2012. We hear about the initial retailer as soon as this year.

Filed Under: Google, Search Engine Marketing Tagged With: amazon, Blogging, ebay, Facebook, Google, paypal, search engine optimization, SEO, Social Networking, TC

How Google, eBay, And PayPal Are Gearing Up For A Very Mobile Holiday Shopping Season

November 13, 2011 by Leena Rao Leave a Comment

Online holiday shopping reached record levels in 2010. And e-commerce spending is up this year. All signs point to consumers spending even more online this holiday season. I sat down with executives from Google, eBay, PayPal and ShopKick to discuss the trends that are expected to emerge in the e-commerce space over the next few months. They center around mobile, tablets, and deals.

PayPal has more than doubled its mobile payments volume since the 2010 holiday shopping season, and we haven’t even hit the thick of this year’s rush. eBay is projecting $5 billion in mobile payments volume in 2010 and this number could increase in the next few months. And Google projects that 15 percent of total search on Black Friday (the day after Thanksgiving and one of the biggest shopping days of the year) will come from mobile devices. Tablet devices are now a part of the online shopping experience and retailers are taking note. Clearly, all signs point to the fact that this could be the breakout year for mobile shopping.

Mobile, Mobile, Mobile

All of the companies I spoke to unanimously agreed that this would be the year of mobile for the holiday shopping season. Steve Yankovich, head of eBay’s mobile business operations and development, says he expects this to be the biggest year for mobile sales for eBay yet. eBay has said that the company expects to see $5 billion in gross merchandise volume in 2011, and this will be partly buoyed by a strong mobile presence in November and December.

PayPal’s Senior Director for Mobile, Laura Chambers, echoes Yankovich’s forecasts and says that merchants are even preparing for the onslaught of traffic to their mobile sites. A number of big retailers, such as Armani Exchange, Guess and The Limited have recently put PayPal’s mobile express checkout as an option for payments on their mobile sites as a way to help the conversion process. “We are seeing strong investments by online retailers for mobile shopping this year,” she says.

Chambers says that last year, the peak day for mobile payments for PayPal was December 12, with $4.7 million in mobile payments volume. Now PayPal is seeing $10 million in mobile payments per day, and we haven’t even officially hit the holiday shopping period. Clearly, the mobile payments numbers could even triple from last year to this year.

While many consumers may shop on mobile for their holiday purchases, the usage of product search, barcode scanning, and other informative apps will also play a big part in this year’s mobile shopping. eBay’s RedLaser barcode scanning apps have seen scans go up 50 percent over the past year. If you aren’t familiar with how it works, RedLaser will scan the barcode of a physical product and show you where you can buy it on eBay’s properties and where it is available in local store locations around you (via Milo) and for how much. The app has been updated with PayPal functionality so that users can actually buy the product directly from the app.

Another shopping app developer who has high hopes for mobile this holiday season is ShopKick. Co-founder Cyriac Roeding says that this year will be the year of mobile for physical shopping. For background, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions. Kickbucks can then be redeemed across all partner stores for gift card rewards or for Facebook Credits. User can also receive special discounts on specific products at partners stores like Macy’s, Best Buy or Target.

Roeding explains that the cell phone is the only interactive platform you carry with you in a physical store, and retailers are looking to use the platform to help drive transactions. Clearly, a mobile rewards app that offers in-store discounts can help do this. “The internet has caused brick and mortar retailers more trouble than benefit over the past fifteen years. Now retailers are catching on to how the internet can help retailers—that’s where mobile comes in.”

Sameer Samat, VP of Product Management for Google Commerce, tells me that the search giant is seeing a growing number of users are making buying decisions using their mobile phone. “We are definitely seeing m-commerce conversions growing and becoming bigger over time,” he says. “But users are also using their mobile phone to search for products and find local availability.”

Samat says that Google has seen a 200 percent growth in mobile product search usage and Google Shopper app downloads over the past year. Shopper, which is available for iOS and Android, allows you to find product prices, reviews, specs, local inventory of products at nearby stores, and more.

As we mentioned above, Google is forecasting that 15 percent of total search on Black Friday. will come from mobile. “There’s no doubt that users are now making buying decisions using their mobile phone,” says Samat. “And we are seeing m-commerce conversions growing and becoming bigger over time.”

Tablets

As tablets have grown to be the go-to browsing device, the iPad, and other devices are also becoming a way to shop. And retailers are catching on to this trend. According to a National Retail Federation study, 20 percent of retailers have invested in tablet device apps this holiday season.

With this in mind, Google debuted Catalogs in August, an app for tablet devices that includes 200 catalogs from major brands including Anthropologie, Bare Escentuals, Bergdorf Goodman, Crate and Barrel, L.L. Bean, Lands’ End, Macy’s, Neiman Marcus, Nordstrom, Pottery Barn, Saks Fifth Avenue, Sephora, Sundance, Tea Collection, Urban Outfitters and Williams-Sonoma.

The app is more than just a browsing experience. When consumers find an item they’d like to purchase, they can tap to find it in a store nearby or tap “Buy on Website” to visit the merchant online.

Google’s Samat says that “the tablet is the ultimate leanback experience and we see that playing a big role in holiday shopping as a replacement for the mail order catalogs you used to browse through.”

PayPal calls it ‘couch commerce’ and believes that tablet commerce will have a record year. PayPal recently reported that consumers who own both a tablet and a smartphone are significantly more likely (63%) to indicate increased overall spending on mobile purchases, versus owners of smartphones only (29%). Owners of both a tablet and a smartphone buy nearly twice as often as those who only have smartphones and more than 40% of dual owners made more than 20 mobile purchases over the past year, compared to only 12% of smartphone-only owners.

Forrester just released a report predicting a 15 percent increase in online shopping sales this year to nearly $60 billion, partly due to the increase in consumer-use of tablet computers for shopping.

Beyond Black Friday And Cyber Monday

Black Friday and Cyber Monday are historically the top-high-grossing online shopping days during the holiday season. But execs expect to see high volumes of online shopping on other days thanks to an increase in mobile shopping and deals.

Yankovitch tells me that eBay expects revenue numbers to be well over numbers that eBay saw last year for Black Friday and Cyber Monday, but expects to see more activity at times when people aren’t traditionally shopping.

The day of Thanksgiving is one of those days, says Chambers. Because people will have their phone everywhere (including at the table), consumers are expected to make purchases on the fly, especially on Thanksgiving evening. In fact, PayPal is predicting that after dinner on Thanksgiving Day will be the first mobile shopping spike this holiday season.

Another popular day has been the second Sunday in December, which is one of the last days where people feel confident that items will be shipped in times for the holiday. And Chambers says across the board, Sunday is the biggest day for mobile shopping generally.

Deals

There’s no doubt that deals, coupons and discounts will be a large part of the online holiday shopping experience, especially with the current state of the economy. According to the recent Forrester report, 58 percent of Americans say they are more price-conscious today than they were a year ago and nearly half believe they find better values online.

“I really expect consumers to be deal hunting this season,” explains Chambers. She says that PayPal, which has historically offered special deals for the holiday shopping season, will be bulking up on more consumer deals this holiday season.

Samat says that Google has always seen a spike for queries like deals, coupons, and sales during the holiday time and fully expects to see an increase this year. “The consumer desire for a better deal will help give certain product decision tools a big bump,” he explains. “People may take more time this year to find the best possible price.”

Deals could also include lucrative holiday shipping offers. In 2010, 45 of the top 50 online retailers offered some sort of promotional deal between Thanksgiving and Cyber Monday, most of which were a type of shipping promotion. And in 2011, Shop.org anticipates that a record 92.5% of online retailers will offer free shipping and not just as a Cyber Monday promotion.

Clearly, there’s plenty of optimism from retailers, and tech companies regarding online spending and shopping this holiday season. And this holiday season is somewhat unique considering the big bet that retailers are making on newer technologies, such as mobile, geo-location, tablets, local product search and more. The big question is how consumers will react to and engage with these technologies over the next several weeks. It could be a very mobile Christmas.

Filed Under: Google, Search Engine Marketing Tagged With: Blogging, ebay, ecommerce, Facebook, Google, mobile, paypal, search engine optimization, SEO, shopkick, Social Networking, TC

The Interconnected World of Tech Companies [INFOGRAPHIC]

July 19, 2011 by Sarah Kessler Leave a Comment

The “tech world” is really more of a “tech family.” Between digital giants’ appetites for acquisitions and the tendency of their ex-employees to start new companies, it’s easy to see how nearly every blip in the ecosystem is closely related.

We’ve mapped just a few of these family ties between “Xooglers,” the “PayPal Mafia”, “Softies” and the many other tech connectors who have yet to be nicknamed.

Our guess is that if you gathered a handful of tech veterans in a room, you could keep the tech connection game going forever. So while this graphic is hardly exhaustive, we’ll keep it going in the comments — feel free to add connections to the list!

The Interconnected World of Tech Companies

Infographic design by Nick Sigler

Image courtesy of iStockphoto, BrianAJackson

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Filed Under: Facebook, Google, search engine optimization, Social Networking Tagged With: amazon, apple, Blogging, ebay, ebayquisition, Facebook, infographic, paypal, search engine optimization, SEO, Social Networking, startup, Startups Lists, tech, tech world

PayPal Announces Phone-To-Phone NFC Payment Support For Android

July 13, 2011 by Greg Kumparak Leave a Comment

Slowly but surely, NFC (the tech that’ll let us ditch our wallets in favor of waving our phones to pay for things) is picking up steam. After years of floundering around in the US, NFC took a major leap forward when Google announced support for it in Android. Shortly thereafter, Google doubled down their efforts with the announcement of Google Wallet.

Today, NFC gains another huge supporter: PayPal. At the MobileBeat 2011 Conference this morning, PayPal Mobile senior director Laura Chambers debuted the company’s first Android NFC endeavor: phone-to-phone PayPal transactions.

Here’s how it works:

Person 1 begins a money send or money request via a homescreen widget
Person 1 and 2 hold their NFC-enabled Android phones together until they vibrate.
Person 2 punches in their pin. Bam! Just like that, the money is transfered. It’s like the Wonder Twins, except instead of rings you have phones and instead of turning into an eagle or a bucket of water you get money.

Alas, there’s one catch worth noting: NFC is… a bit limited on Android right now. That is, it’s currently only available on the Nexus S. A number of other companies have pledged to add NFC support in the coming months — but for now, Nexus S owners are stuck in a private party with other Nexus S owners. On the upside, the handset manufacturers have some time to catch up: this PayPal widget won’t be available until later this summer.

Also worth noting: for the time being, this is strictly phone-to-phone. While it’d be surprising if PayPal didn’t try to figure out some sort of consumer-to-business solution, they’re not talking about that just yet.

We’ll have a video demo up soon.

Filed Under: Google, Search Engine Marketing Tagged With: android, Blogging, Facebook, Google, mobile, paypal, search engine optimization, SEO, Social Networking, TC

Google Responds To PayPal Lawsuit: People Have The Right To Seek Better Jobs

May 27, 2011 by Erick Schonfeld Leave a Comment

Yesterday, PayPal filed a lawsuit against Google and two of its executives for stealing trade secrets. The lawsuit came on the same day that Google announced its mobile wallet plans involving Android phones with NFC chips. The two executives, Osama Bedier and Stephanie Tilenius, previously worked at PayPal. In fact, Bedier was in charge of negotiating a deal with Google on behalf of PayPal for inclusion of PayPal as a payment mechanism in Android phones. The deal fell through and Google hired away Bedier instead, who then helped build Google’s own mobile wallet product.

At least that is PayPal’s side of the story. Last night, I asked Google for a comment. It took them a while, but a spokesperson just emailed me the following statement:

“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy. We respect trade secrets, and will defend ourselves against these claims.”

Let’s parse this statement a bit. Google is saying that talented employees should be able to take their knowledge with them as they “seek better employment opportunities.” In other words, people can work wherever they want, and Google is a much better place to work than PayPal, so if Bedier wanted to switch jobs, who can blame him?

Sure, they can take their knowledge, but they can’t take trade secrets. Google says they “respect trade secrets,” so you can imagine they will be arguing that what Bedier brought along in his brain was just general industry knowledge and not any trade secrets specific to PayPal.

High-profile employment disputes are nothing new in Silicon Valley. When Apple poached IBM’s Mark Papermaster to head up its chip development, IBM sued. The two companies eventually settled out of court. In many ways, this is a PR move on PayPal’s part more than anything else. It is not like they are going to get an injunction to stop Google from going into mobile payments. But it’s a bad PR move because it shows exactly how scared they are that Google is going to succeed.

For some more background on what’s at stake, watch the video below from earlier this week at Disrupt when Stephanie Tilenius was on a panel at Disrupt that I moderated about the future of online-to-offline commerce.

Photo credit: Flickr/Henk-Jan Winkeldermaat

in New York City with a focus on this area. Thank you so much for coming and being with us today.

So the reason I put this panel together, and Alex helped me, is there seems to be a lot of experiments with, especially with mobile, turning mobile ads essentially into something that is more, something you can track better, and one way to track the loop from impression to action is, what better action than a payment, right?

And I just wanted to talk a little bit about, you know, what are the different ways that companies are thinking about linking those two things: the ad or the offer, and the payment, and how does mobile change that? So maybe we can start with you Stephanie. Google has a lot of experiments in this area.

you've got an offer determined in Portland.

Right.

And then there is also an offers product that is linked to Latitude. Just give us a frame of what they're doing at Google.

So, we believe that you're going to see a real transformation in the mobile local space and how consumers interact with merchants, with service providers. You know, I think that we call it the age of molo - mobile local. And, we envision that consumers will be able to walk around and get offers nearby, and so we have several different offers products.

We have check-in offers that you can get. We have lots of big brands doing that today like McDonalds, quick-serve kind of restaurants. We also have a trial we're doing for prepaid offers similar to what Groupon and LivingSocial do today. We're testing that in Portland and other cities and ramping a sales team to go out and apply our SMB deals, large merchandisedeals and at the end of the day, you know, we believe that consumers are going to have a platter choice around them, and they're going to want to be entertained, helped.

There's a push-pull aspect to it, some things we push to them, some things we pull and it will be very easy for them to find things in their way local area.

Do you mix the inventory or will you mix inventory of prepaid offers like the Groupon-style offers with the mobile offers which. You're already seeing, you know, with some a lot of mobile applications are taking advantage of, but there is Groupon or Livingsocial you check in and then it tells you things nearby.

We have lots of different properties. So you are going to see us embed offers throughout our experience and consumers do not distinguish between different types of offers.

Right, so Louis, even for speaking about this recently in the batsman team of yours right. How do you see this whole space, what do you think is a big opportunity?

Yes we look at it from a venture perspective. We look at Online ads are projected to go from 26 to 50 billion. That's about the same course that Amazon was on from the commerce, and it takes all of e-commerce at $180 billion. It's about half of what Wal-Mart does, one company that's on predominantly offline with some online.

And you look at the size of now what may be influenced by online activity to offline. Forester and others are estimating up to 50 percent, 1.2 Trillion of consumer spending is happening by influence of online to offline. So when we talk about connecting the two with or without mobile.,there are a lot of different subsegments, and we are taking a venture perspective, as opposed to be one of the big leaders in the industry like Google.

The startup companies are looking at ways to enable that activity. It could be retargeting a consumer who went in a retail store, leveraging LBS. Retargeting them on their mobile device to get them back into that offline store. It could be driving somebody from a pure online experience to go pick something up offline, like Groupon.

A lot of different ways to do it, the the trick, I think, from the venture perspective of the start-ups that are here today is you want to, it's definitely go to where the puck is going to be. It has been for about a year. The problem is are you going to be facing an empty matter or are you going to be facing a 6'7" Russian who's going to clean your clock, right?

Is that - are you calling Stephanie a 6 foot Russian?

It could be.

Alex, in your mind is sort of figuring this out the Holy Grail of, you know, not only mobile advertising, but sort of, advertising in general?

Yeah, I mean, if you look at the local advertising, I mean, Google is a tremendous company. And local advertising; it's very hard to make that work in an online context, because the local bar doesn't want to pay per click. The local tennis instructor doesn't want to pay per click. He wants to pay per customer and the best way of closing the loop is actually not sending a click, but sending a check or sending a payment.

And I think eventually advertising and payments really become one and the same. And it's kind of interesting, if you look at any merchant they hate paying Visa, Mastercard, American Express the two, three percent. They love somebody thirty percent. I mean programs have been pull that off, and it's not just about the deal of the day concept.

That worked very well. It's more about you merge these two so that you're not sending an offline merchant click. We are actually sending them a customer and you can close the loop. So, I think that there are two or three reasons to be a payment company. One is to just markup interchange and I think that is going to go the way of the Dinosaur, Two is data.

Look at what Amazon does; people that bought this also bought that. American Express can do that better than anybody because they have all of your payment history the third is vertical integration or closing the loop. And I think that is where payments are headed. That is also we are off on advertising side.

So just to give an example so people would understand what you do, you told me this backstage that you know, some body might have bought a movie ticket on Pandanggo and then the gap wants to target certain subset of those people to go to the gap. So they give him an offer for the gap.

Right.

That was a real offer that you did was very successful.

Right.

Can you talk about that a little bit?

Yeah. A lot of what we do is transaction level targeting. So there are different ways of targeting an offer. One is purely Push which is what initially goggle office product is giving it's also what Groupon has done very successfully another way is pull so I see what near by me another way is check in based so this is force and others are giving what we do is a little bit of more trans cation base ;we know you just brought two movie tickets ;your email and the movie theater that you are going is right to next to a Gap; here's forty percent off at The Gap.

And doing stuff like that its actually, its very relevant to the consumer. But it's also sending somebody like Gap A very high quality customer because they know there's no adverse selection problem there. This is a person that just spent a requisite amount of money somewhere else. It's not somebody who is looking for a deal is that best people that you can find are not ones that are motivated by coupons or discounts.

Right.

And that generated a million dollar for sales one day?

Yeah.

That 's amazing.

So, and you can do that, but it's a million dollars of sales from good customers. And it's not to say that very good customers, where you have some percentage.

Is any sale from a customer a good customer?

It depends on how you discount your product, so I know a guy who's a dentist and did a group on i said buy large, the vast majority of groupon merchants are very happy. Because I would say there is no such thing as a bad lead. It is usually a badly priced lead.

Right.

You discount your product below your cost and you do it because you think the LTV is going to be very high. The lifetime value is going to be very high. And it does not pan out because you have very promiscuous customers that will go to this dentist this time, the next dentist, the next time no loyalty there.

It's not gonna work out for you. So, different customers have different lifetime values and different qualities, the best type of customer is one that isn't motivated by a discount but where a discount can change their behavior.

Well, Stephen, what is your thinking on this, I mean, weren't you on the team that tried to buy Groupon?

I can't comment on any activity at Google. I agree, I agree with Alex that it.

It's just in terms of, there's a model here right, the Groupon model which kind of took of, right, and that may or may not be the The only models we're discussing.

I agree, I think Groupon was, is a great company and congratulations to them for getting a foothold on the local space and starting this whole wave a long line to offline, or lower, however you want to term it. I definitely think that there's gonna be a ton of innovations in space. But Groupon is tapped into One alumina and it ultimately is going to be about customer management, so big brands, small brands they want to manage the lifetime value of the customer.

And they want to know who that customer is when you walk in the door, they have geolocation technology and they can figure out who it is. And I think it's very similar to what Alex said in the sense that if you know that customer is, you can target the promotion at them that actually gets them to do a certain thing that valuable to them and the merchant.

So it's symbiotic. And what you are seeing today is, you know, retailers spend so much money on promotions that they have no way of targeting that, and they don't actually know how to target the customer that comes in the door.

And, and What are the different ways that you are experimenting with targeting customers?

Especially, in a mobile context, what do you You know, what do you know about potential consumers that you can offer to merchants or brands?

Right. I think if you look at the statistics, Forrester basically says that 50% of commerce is going to be affected by the mobile phone. Everyone, you know 50% of the phones in the US are smart phones. People carry them, they use them for shopping today. You're going to see them look for inventory.

For example, today we have 70 of the top 100 retailers integrated in our Google shopper app. We have over five million downloads and people use it to actually find local inventory. You're also going to see consumers going to a store and if the inventory's not there, they going to be able to tap, you know, scan a bar code or tap on an SE tag and just order the item online and have it shipped to them.

So you are going to see the integration of online and offline inventory. And these merchants will actually be able to target promotions and inventory to consumers.

Let's take it one step further, Google is making a big bet on NFC, NFC payments right and android or just NFC chips, which we use for lots of things like the payment. sort of that's the one of the biggest potential apps there. Can you paint a picture for, you know how an NFC-enabled phone might work as a payment vehicle as well as how it might tie into some of what we were talking about in terms of offers?

Yeah, there's a lot of applications for NFC which is why we believe it's a really important opportunity for Android and we are making a bet on it as a company. You can tap on a poster in New York City and find information about a movie. You could get an offer from an NFC tag. You could walk into the Gap and if they don't have your size jeans, you could tap on an NFC tag and have it shipped, have those jeans shipped to you the next day.

So there's a lot of potential and the ease of use of tapping, and tapping it's literally seconds and it's so easy. We do believe in NFC. We also believe in bar code, you know QR codes. I mean there's a ton of things going on right now in the space.

Right.

Not just NFC.

In fact you're making an announcement tomorrow, right?

We do havethe partner announcement tomorrow. It's gonna be an NFC payment announcement.

I can't confirm what we are doing tomorrow.

My understanding is that you're going to make an announcement with Citibank, to enable NFC payments on Android phones.

We have a partner event and they'll be around local commerce.

Ok, you heard it here first. Lewis, do you think that this whole idea of The NFC payments is going to work?

Yeah, first I'd like to ask Stephanie if she can confirm she has either a We see, it's coming. It's a wave. It's going to be here. There are a lot of hitches within use cases and comes to play, Stephanie's rattling up a number that, are much, there's some that are very easy on the spectrum. A consumer standing by their own at a podium or add an ad get information, and get a discount of their mobile device much more simple, right?

When they're in a retail environment And a low average ticket, high volume environment.

POS being the cash register.

Correct, point of sale. Where 2 seconds make or break a product in speed of the transaction at the merchant level. There are still certain issues that need to be overcome, which is why we've been following mobile payments in these applications for years. We did a study about four years ago, five years ago.

Most of the companies stabling around mobile payments aren't actually processing the payment concentrating transactions, like a Groupon, right? What happened, the trip up points in some of the use cases are what if the consumer wants to integrate awards or royalty program? What if they have a gift card program and it's not integrated with that?

What if there's a line that they're on, and they're using their smart device for other activities like email or playing a game, and they don't want to stop at the second they have to pay and enable it? All of that will get worked out but what we have seen.all the excitement around it is there from a consumer perspective.

I think the excitement is from the technology companies perspective. Now that's picking up, absolutely would imagine for Google it's a lot more of the data than it is trying to be in a payments processing center.

Right and maybe a little bit from early adopted consumers but I guess my question is, to what extend is there a hurdle that you have to get local merchants to adopt these technologies, you know, local merchants are not, when they have to do something new that 's a barrier to adoption it seems to me.

How are you addressing the investment.

And they generally only care about two things, cost is number one and fore-number one, and number two is speed of transactions, if they are of the high-volume store like a coffee shop. And if NFC can conquer both of those for them, they will be much more receptive if there's no additional cost, either in hardware or in transaction fees, and you can expedite that line, that's what they first and foremost love the idea, and there's been lots of attempts about creating data-driven royalty programs for awards for local merchants, very very difficult to do, although now, we're with the adoption of smart phones, and the scale of the players, like MasterCard, like Google and others going in to promote NFC, It has I think it's first real chance of getting there.

Since floating an answer to some of the questions.

I think look these things always technology transformations always think in some ways longer than you think, but in some ways shorter than you think. I think, 10 years from now we'll all accept this as a reality I don't know how long it'll take to get there. If you look at Starbucks, I mean Starbucks launched a noble loyalty program and it's just based on barcode scanning and they just have over 3 million users like that, and then they just launched NFC in the UK, NFC payments.

With barcodes in orange you're seeing sort of momentum in this space. The stats actually speak for themselves. Look, I don't know if the analysts are right, but here is what the analysts are saying so there was 4.9 billion of local commerce in 2010, and the projections are that gets to 163 billion in 2015.

That's mobile commerce. Mobile payment, there was a 170 billion dollars of volume in 2010, and that's going to 630 hundred billion. So you look at digital, you look at, there's a ton of there's already a ton of activity in this space.

A lot of this is overseas though.

A lot of it is overseas but there's a lot of proof of overseas and Japan, Singapore contractors, you know.

Do they already have NFC in Japan like they have ?

Yes, Singapore, Japan, they have NFC everywhere, everybody uses it. You know, T points has 45 million wealthy customers using NFC .

How would, if NFC became widespread, how would that help sorta the whole, what you've been talking about tying offers to, to ads What I go back even one step to Louises comment of,there is a cost issue to a lot of merchants so why would merchants ditch their legacy hardware if everybody has a credit card anyway.

And this is actually one of the areas where offers can be helpful. So if you go to the local coffee shop and say "I will guarantee you a thousand new customers" into the next month but you have to add this device to your store we'll probably do it if it say if we tell them alright each customer is going to save 1.5 seconds paying and you have to pay five hundred dollars for this new device they probably won't do it so it's another area where offers not really offers in general but just getting people into the story, sending customers can be a very, very powerful motivator.

If you think about the mobile phone, one of my favorite companies in the world is called Catalina Marketing and and they dominate the space for, primarily supermarkets and loyalty programs in supermarkets and pharmacies. So you pay and at the end you have some offers on your receipt. That's very twentieth century.

What can you do on the phone? Alright, I pay with NFC, and then I might see a couple offers right there. I can save those offers offers to my online phone.

If I just got those offers. I mean, every time I go grocery shopping I see those offers and maybe I'm not the target audience but you know there usuallyat something I want to buy, and if you just replace those same offers on my phone, it just turns into digital spam instead of

It's better though,I mean, the key thing is that defective feedback so Catalina typically has over a ten percent redemption rate for one of the coupons that they give out because in many cases they're very there like they know that the supermarket has too much milk they know that you buy milk once a week and they'll say here's two dollars off milk.

So you know they have massive redemption rates for the offers that their giving away, but they don't know if you use it till another two weeks or another week at least on the phone I can say, I want this offer I'm going to save this to my phone and then I'm going to use it next week so there's a lot of neat stuff you can do now that you have a smart device as opposed to a piece of plastic .

Alright so Square just had an interesting announcement yesterday where they're turning their iPad app into more of a cash register in a sense and they also have this idea of square cards where its kinda like a wealthy card type of offer what do you guys think about that approach?

Yes, I will go first. I think they've definitely started moving toward some good pivots, right, where initially when it started out going after higher risk higher fraud merchants as volume and then they had their underwriting problem which was pretty clearly going to hit them and so they're very successfully to me evolving the model, going from what in smaller divots that would've been a huge, would've been a big divot instead they're going into pivots.

It's going well that's a good way to go. They're also talking apparently a lot about community driven aspects for the merchants of sharing the data across them to help drive more volume. And between them which really hasn't been done by a payments processor or POS system that's grabbing the data. So as long as they have the capital to support, which they clearly do, these ongoing activities, and now the partnership with Visa, there's probably some really cool stuff that will evolve out of it.

yet to be seen.

Were they having underwriting problems?

Well, they paused it for a while because of sponsorship and underwriting about a year ago.

I think that's another area where you can take a smartphone that can do pretty much anything and you can disrupt an old industry. And you put, like, square is really competing with cash and the best way to compete is not to display something that works pretty well but cash doesn't work. If you wanna make a five hundred dollar purchase at a flea market and all you have is a credit card.

Now you enable the flea market seller and the artist to actually accept credit cards, and I think what square is doing is pretty amazing. And I think they have a lot of success ahead of them. And plus with GPS coordinates and everything else, I think they can manage the fraud problem very effectively.

Paypal did it a long time ago. They've a different set of fraud parameters to look out for, but they've got a very smart team.

But it also opens up and once people are starting... merchants are starting to take payments via these, via their mobile phone and once consumers are paying, well that opens up the possibility for a peer to peer payments, right? I mean, for instance, for Google, Google has Google Check Out, right?

You already have the infrastructure to become you own payments...processor . To what extent does it make sense to tie that with some of these other which are more advertising and offer driven programs. I mean, is it better for the consumer or the merchant in the end if you can be the payments processor and lower the payments fees?

Yeah, I think there's a misnomer that Squares are actually trying to compete with Mastercard and Visa. I mean, you swipe your card, use your credit card. I think what they're competing with is cash. They're going into the small guys, and frankly Paypal did this very early on, and they're servicing really small merchants and displacing cash, which is actually good for Visa and Mastercard.

I think it's good to actually tie loyalty and offers to those things. And what really merchants care about is traffic. They want traffic and they want new customers into their store. The payment processing is a small cost on a relative scale. It's important, for big merchants it adds up. But the real important thing is driving traffic into Is Google doing anything on the loyalty side?

We don't have anything to announce at this time.

OK. Well, we're out of time. Please give a round of applause to our panelists. And thank you so much. I hope you learned something, I certainly did.

You guys can walk down the stage and we'll have our next presentation. I think we'll to do a stage

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Filed Under: Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, lawsuit, mobile, paypal, search engine optimization, SEO, Social Networking

Google Responds To PayPal Lawsuit: People Have The Right To Seek Better Jobs

May 27, 2011 by Erick Schonfeld Leave a Comment

At least that is PayPal’s side of the story. Last night, I asked Google for a comment. It took them a while, but a spokesperson just emailed me the following statement:

Photo credit: Flickr/Henk-Jan Winkeldermaat