Seven brands who are using Apple Passbook well

Apple’s Passbook which had a soft launch alongside iOS6, seems to have been met with a lukewarm reception by those in mobile. Hoping for NFC in the iPhone5, people were naturally disappointed that Apple delivered something lacking in originality. However, that might be its strength. A combination of user familiarity, native integration, alerts to the front of the screen and ease of set up for brands could make Passbook something of a hit.

First of all, Passes are easy to set up via their API, but also through a number of interfaces. They can be highly targeted and set to pop-up on screen at a specific time or a specific location. Imagine if Foursquare, for example could push an offer to the front screen whenever you passed a venue? Passbook can do exactly that. Whilst, offers, loyalty and ticketing are an obvious use, there is a massive opportunity for brands to use Passbook to offer a better service or utilities. It’s already being done for accommodation information, medication alerts or credit card statements. So perhaps it’s time for brands to get imaginative and find some new and interesting uses for Passbook Passes.

Brand Emotivity has written a white paper on the opportunities of Passbook and how to implement it, which is below, or can be downloaded here.

I previously blogged how Eventbrite and Auchan, the French supermarket are making good use of the system. Other brands who have been successful with Passbook is Starbucks (probably the ‘best in class’), Sephora, Air BnB, Medpass and Billpass.

See the slideshare below (or ) to undertand the opportunities, see how these brands have used Passbook and how to create your own passes.

Apple’s Passbook: Early evidence is that it’s a hit with users

Whilst many commentators were discussing the features of the iPhone 5, one announcement that received less notice was the introduction of Passbook in iOS6. Many industry figures had been holding out for NFC to be introduced in Apple’s new handset, so Passbook barely counted as a consolation prize. However, this feature may turn out to be a significant channel for brands and consumers.

The system has had a soft launch from Apple – not a bad idea after the maps fiasco. Some of the first for Passbook apps for McDonalds (France), Eventbrite and Airbnb were recently released in iTunes and early signs appear to show high adoption levels. Online ticketing business, Eventbrite, said that over 20,000 tickets had been sold through Passbook in the first week. The French supermarket, Auchan, has just announced that 10,000 people registered for a Passbook loyalty card within a few days of its release.

Apple’s reasoning behind Passbook is that it creates a frictionless experience by delivering barcodes within apps and negates the need to install millions of readers for NFC chips. It would seem that the advantage for consumers is familiarity combined with additional features such as location services (useful for Airbnb) or event reminders (useful for Eventbrite).

Waiting to pay your bill in a restaurant? Don’t worry, you can now do it by phone

In a joint venture between PayPal and Pizza Express, the two companies will now let you pay your restaurant bill from your phone. No waiting for staff to bring your bill, you can do it from the table via your mobile. This is obviously a trial venture and the app is iPhone only, PayPal users only and Pizza Express only. That doesn’t seem to be a vast audience, but PayPal seem to be pretty confident of the popularity. The sentiment is certainly a good one, as Mark Angela, Chief Executive of PizzaExpress said in a joint press release with PayPal, “We knew there was no point just launching an app for the sake of it, so we waited until we had a system that could genuinely improve our customers’ experience of eating out at PizzaExpress.”

mCommerce can bring £billions to the UK … if only we had the data connections

A new study from eBay, suggests that the UK could be seeing if £4.5bn in mCommerce by 2016. The only thing holding it back are the poor mobile data connections. In a survey conducted for the online auction site by retail specialist Verdict, they estimate that 16% of the UK lacks the coverage for mobile broadband with a further 20% below average. That could result in a loss of over £1bn per year in revenues. In a study of 1500 UK consumers they found that lack of coverage, low speeds and reliability were the major barriers for mobile shopping. The costs of data is also an issue for many customers. The DMA/Empirix study published last week also found that consumers were ready to shop, but the brands were not providing the service.

eBay has sent the results of Ofcom and are pushing to speed up the delivery of 4g which will provide much faster broadband. Although 4G networks are rolling out in the US and elsewhere, the UK has yet to agree the terms on which it will be auctioned off. The operators claim they have not seen their return on the £30bn + cost of the 3G licences. Mobile is the fastest growing channel for eBay who expect to see over $4bn in sales this year. More on the report here.

Contactless Payments Launches in the UK (finally)

Orange and Barclaycard have been promising contactless payments in phones for over a year. They finally launched the UK’s first NFC phone last week. It will first be available on a Samsung Tocco Lite on both pay as you go and monthly and the payment facility (called Quick Tap) can be set up by Barclaycard or Barclays Debit Card customers. NFC works much like an Oyster Card (for those of you who’ve travelled in London), whereby you top-up your account with up to £100, and can make single transactions up to £15. In essence it’s like cash, but without the pocket full of coins.  The contactless payments can be used at 50,000 stores, including Pret a Manger, EAT, Little Chef, Wembley Arena, Subway, Wilkinson and McDonalds.

Consumers often raise the issue of security with NFC. Could someone just brush past and deduct a payment? No, because the data is encrypted and can only be read at terminals. In fact, the NFC chips have been available on Barclaycards for some time, and there are no examples of that security being compromised. What if someone looses their phone, could someone just spend the money? Not really. If you lost it will all £100, once you tell Barclays the payment facility is cancelled and the money refunded. If you went out with £100 cash and lost it, you’ve lost £100. That doesn’t happen with contactless.

In spite of that, there are understandable consumer concerns about security, which is why users can add a pin number, making the contactless facility more like a traditional chip and pin. Will contactless catch on? Certainly Orange and Barclaycard have massive confidence in the scheme, and will be rolling out other handsets shortly (lets hope one of them is a decent smartphone). The potential of contactless as both a payment and marketing channel is there, however there is one big but. Consumer adoption. In spite of large investments in mobile NFC by banks, operators and handset manufacturers, there is little evidence that consumers are demanding contactless payments. Pushing technology to consumers does not a promise of success. The world of mobile is littered with failed technology (mobile TV, video calling, any Nokia phone in the last three years …). What is disappointing with the Orange/Barclaycard offer is that neither the handset nor many of the brands involved are exactly cutting edge (contactless in a Little Chef???). True, you have to start somewhere, but this isn’t going to reach the kind of social opinion formers who will evangelise about the technology. Maybe it will all happen with a contactless iPhone 5!

Visa puts yet more cash into mobile payments

Yet more evidence that mobile transactions will be big. Visa had previously committed to spending 100 million Euros per year rolling out mobile payments. They have now made a significant investment in Square’s credit card reading technology. Founded by Jack Dorsey, previously of Twitter’s fame, Square aims to bring mobile payments to the masses. The concept is simple enough – Square is a device that will allow anyone with a smartphone to take payments through it. Imagine that you have a plumber in to fix your boiler. You obviously won’t have enough cash to pay him, so he whips out his smartphone, clips on Square and it instantly becomes a chip and pin machine. In the US there are 27 million businesses that don’t take credit cards. Square’s aim is to give them that facility. As Keith Rabois from the company explained, ‘we’re empowering people to accept credit cards that historically have not’.

The service is proving popular already, with over 100,000 merchants signing up to it.  The investment from Visa gives added weight to the concept of mobile transactions. The significance of this is not simply in helping small merchants to take payments, but in the overall consumer perception of phones as the place to make payments.

Starbucks offers Mobile Payments to Customers

In a very interesting move, Starbucks has introduced a mobile phone payment system to over 6,000 of their US stores. Customers with a Starbucks card can use a mobile app to make a payment on the card. They simply show a barcode at the till and the payment is taken. They can top up their card via PayPal.

With the world of mobile retail hotting up, there will be greater demand from consumers to make payments through their phones. However, there is a battle going on between various providers. In the UK the operators put their energy into PSMS and the web-based system PayForIt. However these payment methods have a limited future. It limits the kinds of things that can be paid for (mobile or web content only) and the high operator charges make it prohibitive for many brands. Looking ahead the future is likely to be in contactless or NFC payments, however outside Japan and Korea it has not taken off yet. Even in NFC there is likely to be a battle between operators, handset manufacturers and credit card companies for control of the channel.

So in the meantime brands are using their own payment methods. The iPhone appstore demonstrated how registered users could quickly make a payment against an existing credit card, which has extended into retail with the likes of Amazon’s one click payment system. Various providers have played with their own mobile payment systems, but few of them had the reach for it to take off. The move by Starbucks is significant though: 20% of their US transactions are made on the card. Given the large number of outlets from Starbucks their mobile payment system has a good chance of taking off.

Square: it’s mobile payments, but not quite as we thought

It came to light this week that Twitter founder, Jack Dorsey, is working on a new project for mobile payments called ‘Square‘. The project has been around for a few months, but the press finally put together the various pieces and worked out what they were up to!

Square is a great concept: install some software on your smartphone, then plugin a small plastic square. You swipe a user’s credit card and take a payment.

As with all great ideas, the concept is extremely simple. It is aimed at small businesses who don’t aren’t able to invest in PDQ systems. The revenue model comes from taking a small fee per transaction. It’s great to see a mobile application that will help small businesses – afterall many of the online brands that we know and love (or hate) started as small businesses.

Most people think of mobile payments in terms of taking the money from the phone bill, however Square takes a more left-field approach to it. There is no question that people are reluctant to enter credit card details on a mobile site. Even though the connection is almost the same as PC web, the trust element with mobile is missing. So if Square takes off (and I hope it will), as well as providing a useful and much needed service for SMEs, it may also change perceptions about payments through the phone.

With the introduction of NFC (Near Field Communication) systems on mobile, in app payments and now Square, the next year will see mobile commerce becoming massive.

The future of mobile micro payments: is there one?

It was reading ‘Being Digital’ many years ago that first alerted me to the idea of micro payments. Rather than paying a subscription to a magazine, for example, why can’t we pay a few pence to access an article that we are interested in?

I was interested to see someone from the mobile aggergator, Oxygen8, writting about the problem with mobile micro payments.

Arguably we have a good mobile micro payment system already in the form of Permium SMS (PSMS). It is, in many ways, the idea format – simple, secure and universal. Not only that, but PSMS has age verification built in. PSMS really took off with the ring-tone market, quickly followed by text voting and charity donations. However there is one big problem with PSMS. The mobile networks take around 66% of the value of the transaction. On a credit card transaction, only 4% of the cost is paid for the transaction. There are othe problems too. When it comes to goods and services, PSMS can only be used for mobile products: ringtones, games or apps. There are some PSMS shortcodes that can be used for website access, but you couldn’t use it to buy a newspaper for example. Added to that, VAT is charged on the full value of the SMS. If you are using PSMS as a payment system for services that already include VAT, then technically VAT should only be charged on the transaction cost itself.

I think many of us are waiting for a mobile micro payment system. I would love to hope on a bus, get out a taxi or pop into the newsagents and wave my mobile phone to pay for things. Then there all the remote services from articles on the internet to booking tickets that would be so much simpler if I could just pay directly through my phone. Taking the concept a bit further, why shouldn’t I be able to pay for everyting through my phone where my monthly bill look something similar to my credit card bill?

A few years ago the mobile networks attempted to address the micropayments issue by introducing something called PayForIt. This was a mobile web, one click payment system for transaction values up to £10. I doubt that many people outside the mobile industry have heard of pay for it. The networks have invested very little money in promoting this system. And at the same time, they are still taking massive transaction fees for each payment, so from the merchant’s point of view, even though there is potentially a higher uptake with PayForIt than credit cards, the cost per transaction doesn’t make it viable.

Cashless and online payment systems have had something of a chequered past. Does anyone remember CyberBanx? Or Mondex, a cashless card invented by HSBC? Or the more recent attempt by banks at mobile payments called mpay? In fact, the only online payment system to have become universal is PayPal thanks intially to the online porn industry and more recently to ebay. But even PayPal mobile has stummbled at the first hurdle. Does anyone actually use it?

So what is the future for mobile micro payments? The short answer is, it will be a difficult one. Whilst it would seem that the mobile networks could get their act together with lower transaction fees, it’s unlikely they will. Apart from the fact that there is no unity amongst the networks to make such an agreement, there appears to be no interest for them to do it. It’s possible that PayPal will get their act together with mobile payments, as they are doing with the Blackberry App Store, but at this stage I don’t see it going much beyond this limited scope.

Probably the best opportunity for mobile micro payments comes from NFC, near field communications and RFID chips. These are secure chips that are used in payment systems such as The Oyster Card, used for London’s Transport. In fact, Oyster could be the UK’s best bet for a cashless micro payment system. All they need to do is stick the RFID chip into mobile phones. We already have readers on public transport and many newsagents in London. All the needs to happen is that it is extended to other outlets, and voila! In terms of paying for online or mobile though, there is still considerable work to be done with the mobile networks. There are many examples worldwide of NFC payment systems, and mobie NFC working succesfully, so maybe there is some hope for the UK.

I would love to see a universal mobile micro payment system. By universal, I mean one that everyone can use without difficulty. Many people do not have or use their credit cards. This is particularly so in developing economies such as China. Given the current state of affairs, I think a universal mobile micro payment system is a long way off.