New recession begins next year, Shilling says

“I’m predicting another recession next year,” says Gary Shilling, economist. It won't be a "double dip," a faltering of the current recovery, but a brand new recession. Many Americans won't find the quibbling reassuring. If this is a recovery, who needs it?

Shilling's forecast is based in part on current economic conditions, and partly on history. We’re already two years from the end of the last recession and three years from the business cycle’s previous peak, in December 2007.

Historically, economic expansions last about three years, especially in long down cycles of the kind he thinks we’ve been in since 2000.

So, he’s looking for a brand new cyclical recession beginning in 2012.

New recession begins next year, Shilling says Howard Gold's No-Nonsense Investing - MarketWatch

Lots of Moving Parts in Mobile Payment Ecosystem

The mobile payments ecosystem is quite complex. Even if you look only at the matter of security, people have a fairly good idea that there are "lots of moving parts."

Then there are the various segments, including retail payments, online payments, money transfers, mobile wallet services and integration of payment, wallet and location to create localized and personalized marketing services.

There are all sorts of opportunities for third-party or clearinghouse services as well, such as Neustar's "Intelligent Cloud" service, which exposes mobile customer location, or messaging services to application providers who might want to create "geo-fencing" and other features for personalized mobile marketing.

Offline Payments is the Big PayPal Opportunity

Offline, real-world payments are a much bigger opportunity than online payments, representing more than 90 percent of current transactions. That’s where PayPal is looking to shift.

PayPal’s mobile payments currently come in two varieties. PayPal offers person-to-person mobile payments, in which it doesn’t make money if users tap a PayPal balance or bank account or charges a percentage fee on transfers from a credit or debit account. It also makes money on mobile commerce payments, where it takes a percentage fee for goods purchased online on a mobile phone via PayPal.

$3B in mobile payments for PayPal this year but bigger prize at stake

Mobile Payments an Enabler

It is possible there are some potential entities that really see an opportunity to create a new transaction processing (settlements) system to challenge today's settlement networks. That's an ambitious and risky sort of thought, but a thought we suspect most innovators do not harbor. Instead, there are lots of other businesses that can build on mobile payments, without trying to displace existing networks.

Square already has succeeded in adding value on the terminal end of the ecosystem, essentially extending point of sale terminal capabilities to retailers that could not afford it before.

Google is aiming at the other obvious big target: advertising. The coming Google Wallet would allow Google to offer retailers more data about their customers and help them target ads and discount offers at mobile-device users near their stores.

Appending real-world purchase information to its treasure trove of online behavioral data would allow Google to drive significant transactional and advertising revenues.

Mobile Payments Enter A Disruptive Phase

Mobile money coming to Ethiopia

Irish firm M-Birr, in partnership with Mukuru.com and M-Birr parent firm NCL Technologies, will roll out mobile money services in Ethiopia soon, through M-Birr’s subsidiary in Ethiopia, M-Birr ICT Services Plc.

Mobile money coming to Ethiopia

Different Paths to Mobile Payments

There are many different angles to take in the mobile payments, mobile wallet and mobile money transfer segments of the mobile banking market. They are, in fact, often functionally distinct businesses.

All of them share one thing: the use of mobile devices to exchange money. But that’s just about where the similarities end. Here are a couple different services seeking roles in distinct parts of the larger ecosystem. Square already has found a viable niche as a mobile terminal for retailers who want to take card payments, but either cannot afford, or cannot use, a traditional point of sale terminal. That's one of the "device-driven service businesses" we already have seen emerge.

Then there are the peer-to-peer money transfer services, which are quite distinct. Think a mobile version of Western Union's funds transfer system. M-Pesa is a good example of that.

Google is chasing the mobile credentials or mobile wallet segment of the market. But lots of other segments and roles will emerge over time. Think of what was thought possible when Netscape first launched around 1995. Then think of all the things people can do using browsers today. Something similar will happens with the mobile payments, banking, wallet platforms as well.

4 very different mobile payment services

CBO Analysis Shows a Spending Problem

The Congressional Budget Office, recently released a review [here] of the budget estimate they issued in January 2001 and the factors that turned their $5.6 trillion surplus projection into $6.2 trillion in cummulative deficits by 2011.

The pie chart below breaks down the major components of the $11.8 trillion swing from surpluses to deficits over the ten year period 2002 to 2011. Higher spending turns out to be the largest factor erasing those surplus projections, comprising 44 percent of the ten-year swing.

The Tax Foundation - CBO Figures Dispel Myth that Bush Tax Cuts Caused Today's Deficit

Social Shopping Aggregates Buyers

Social couponing, or social shopping, sometimes called "deal of the day," is becoming a serious business, but it also is easy to dismiss. It's just coupons, right? Maybe not. The coupon is the tactic used to aggregate buyers. It is a rival channel to alternative coupon channels and other forms of local advertising and promotion.

The group-buying industry is expected to grow 138 percent to $2.66 billion in 2011. The business is highly fragmented at the moment, with some estimating there are about 439 daily deal email programs serving the U.S. market in the first quarter of 2011.

Nor is social shopping just a nice or interesting stand-alone business. Many believe it will increasingly be integrated with mobile payments, mobile loyalty mechanisms and other targeted forms of advertising and promotion.

Beyond Groupon: 5 market-moving trends in social couponing (single page view) - iMediaConnection.com

Secrets of Social Media: It's High School

"Everything you know about social media you probably learned in high school," argues Bill Murtha, President and CEO of Roberts Communications. "In high school, I spanned a bunch of cliques, groups, even a few lame gangs."

"We had juicers, druggies, motor heads, hippies (yes I’m that old,) rockers, heavy metal rockers, jocks and nerds."

Each clique had its own coda, jargon, ethics, special interests, badges of honor (or dishonor) and tests of loyalty.

Products always are some part of how cliques identify themselves. That's the "hook" a brand hopes to put out there when using Facebook or other social networks as a marketing channel. But there are lots of obvious caveats. The products are not the groups. It is the people who are the social network, the products are props.

So most brands will not be authentic members of the social group, but the provider of key props. And not every product has high emotional value, or works as a key prop. Most social groups that have a product as an identifier or prop only have a few such props, just as most consumers have a handful of relevant brands with high emotional ties. Starbucks, Apple, Whole Foods or Lexis might be some of those types of "high involvement" products.

But it simply doesn't make sense that most products people use and buy actually have much chance of achieving either high emotional involvement or therefore effectiveness on Facebook or other networks. It's just like the notion of "followers" on Twitter. Only a handful of human beings actually have "millions" of followers, and nearly all are celebrities.

Something similar happens when brands use Facebook, and most businesses try to use Facebook these days. In most cases, most brands are not going to be among the handful of names that any single human being actually does want to interact with.

Also, it is the other people any person wants to have the involvement with, even when the brand is relevant. The point is to be realistic about what Facebook can provide. Groups are about "people like me," even when the badge happens to be a product or brand. The badge isn't necessarily part of the group.

Secrets of Social Media You Learned in High School | Guest Posts | Social Media Consulting - Convince & Convert

Sometimes Technology Has to Catch Up Before an App Can Take Off

Jack Dorsey tried a "Twitter" approach 11 years ago, broadcasting his notes and thoughts to friends and family using email and a Blackberry. It didn't really work very well. Twitter was launched six years later.

That happens quite frequently in the technology business: people have ideas but the infrastructure won't support the apps.

Right idea, wrong time: Twitter in the pre-Twitter days | VentureBeat

Ditch "Sense" on an HTC?

The big advantage of Android's open approach is innovation. The big danger is operating system fragmentation. You can see the tension in recent developments related to HTC implementations of the "Gingerbread" version of Android.

HTC initially said its new "Desire" device wouldn't be getting an official Gingerbread update due to memory constraints, saying there wasn't enough space on the phone for Gingerbread and HTC Sense.

Then, 24 hours later the manufacturer responded to feedback from Desire owners and changed its mind, committing to delivering Gingerbread alongside a trimmed-down Sense UI.

Now Australian carrier Telstra has indicated it's willing to go even further to get Gingerbread onto its Desire handsets. "Sense" makes the Android user interface "different." But if you have used Sense, you know why users say they want it.

I happen to think HTC does really nice hardware, and I really enjoy "Sense." What I'd do if an HTC device did not have Sense, and I was shopping for a new device, isn't clear. It would be an issue, but it's hard to say if it is a deal breaker. It would be a major negative, though.

Australian carrier says it'll ditch Sense to get Gingerbread on the HTC Desire

Software Will Win Over Hardware Approaches to Mobile Payments, card.io Says

"Pay with a credit card by taking a picture of it" is at the heart of card.io's mobile commerce platform. When it's time to make a payment in your app, card.io activates your phone's camera and pulls up a green frame on the screen. Put your credit card within the green frame, snap a photo, and card.io's proprietary technology will scan the card for whatever information is necessary to make a transaction.

The actual transactions are processed by third-party payment processors used by the merchant. Finally, your credit card information is immediately deleted from your phone.

Co-founder Mike Mettler, a former developer at AdMob, said the company was betting that in the long-run, software approaches will win over hardware approaches.

Former Admob Execs Tackle Mobile Payments, Photograph Credit Cards | News & Opinion | PCMag.com

Danish Operators Join Forces on Mobile Wallet

TDC, Telenor, TeliaSonera and Three are cooperating on the launch of a digital wallet service based on near field communications in Denmark. Note the emphasis on "wallet," or credentials management, rather than "payment."

The roll-out will start in the fall of 2011, but it will take a few years before the technology reaches widespread adoption, the companies say.

Consumers will be able to use their mobiles to pay for goods, services and travel, at a discount if digital coupons are available, and also open doors at hotels or borrow a book at the library.

Danish Operators Join Forces on Mobile Wallet | PCWorld

How Mobile Is Changing Social Media | Social Media Examiner

With all the change going on the social software and mobility spaces, it's easy to mistake what the potential importance might be. Consider the matter of "location," which some associate with the "check in" feature. That is important to some users, but lots of people would say it doesn't provide much value at the moment, and that is a reasonable assessment.

But location-based services at some point will more clearly be seen as changing the way businesses use social media and software, some would say. "Where I am right now" is a bit of information that changes the context of social networking when correlated with "where are my friends, associates and relatives, right now?" The difference is that location awareness potentially leads to different kinds of sharing and messaging. And many of the changes relate to potential commerce activities.

"Location" also is changing the way brands are going to do "advertising" and "promotion."

One often hears it said that social networking (different than social software in a larger sense) is becoming a substantially "mobile-focused" experience. There are location implications there as well.

sme_bw2010_jason_falls_v2 from Michael A. Stelzner on Vimeo.

How Mobile Is Changing Social Media | Social Media Examiner

HTC Evo 3D, View 4G Launched at Sprint

The HTC EVO™ 3D and HTC EVO View 4G™ launch today, June 24, 2011, exclusively on the Sprint network.

HTC EVO 3D, America’s first glasses-free 3D phone will cost $199.99 and HTC EVO View 4G, the first 4G-enabled tablet in the United States, will cost $399.99. Both prices exclude applicable taxes, and the devices require a new two-year service agreement or eligible upgrade.

Incidentally, Sprint has added some funny videos and polls on the pages touting the new devices. http://now.sprint.com/alltogethernow/index.php?pid=2&ECID=SEM:Google:C:Sprint:HTC

Exclusively from Sprint and Available Today: HTC EVO 3D, America's First 3D-Enabled Smartphone in the United States, and HTC EVO View 4G, with New Digital Pen Technology

What’s needed to do payments right

Ubiquity is a primary requirement for a successful payments system, executives at PayPal believe. "A payments service needs to be everywhere to be effective," says Sam Shrauger, VP Global Product and Experience, PayPal. 


That puts PayPal in the camp of would-be and developing mobile payments providers that really must look for ways to create a universally-available service, without the limitations of mobile device operating systems, communications capabilities or input-output methods on the consumer side of the business.

PayPal also would like to avoid forcing the essential merchant partners to invest in upgrades to their point of sale terminals, especially at a time when there are many ways to handle the communications part of the process.

"Very narrow payment offerings," then, are not the approach PayPal will take when it does reveal what it plans to do in the mobile payments space. PayPal does believe that whatever it does, it will have to be compelling enough "to make people change their current behavior."

Others will take the other approach, which is to create "niche" offerings. Starbucks and Square probably are the best examples of that at the moment. Starbucks only cares about what its own consumers do, at Starbucks locations. Square really is optimized to enable non-traditional retail payments in scenarios where the retailer doesn't own, doesn't use, or cannot use a traditional POS terminal.

To really “do payments” right, you’ve got to have more than just technology," says Shrauger. "Above all, any new solution has to deliver something better than what exists today. Not just new and different–better."

PayPal already has introduced retail payments on a limited scale in the United Kingdom, so it already is moving down the track of retail payments at physical locations.

What’s needed to do payments right

PayPal Doubles Mobile Payments Predictions to $3 billion in 2011

PayPal has raised its forecast for 2011 "Mobile Total Payments Volume" to $3 billion, up from $2 billion just a couple of months ago. It's the third upward revision to the numbers since the first estimate of $1.5 billion at the beginning of the year.

"Mobile payments are growing at a rate we never could have imagined when we started processing them back in 2006," says Laura Chambers, Senior Director, PayPal Mobile.

"We’re now seeing up to $10 million in mobile TPV a day, a big increase from the $6 million we reported in March," says Chambers. "And we currently have eight million customers who are regularly making purchases on their mobile phones, up from a previously reported six million users."

PayPal Doubles Mobile Payments Predictions to $3 billion in 2011

PayPal Will Look for Scale When it Launches Mobile Payments Platform

PayPal isn’t yet ready to say anything in public about what it might be planning in the mobile payments arena. But it isn't so clear that PayPal will want to wait too long for near field communications to achieve wider deployment before it tries to gain traction in some other way, especially ways that offer immediate scale.

That's the problem these days. Mobile payments ultimately will require huge scale. But few providers are able to demonstrate, today, such scale.

The contrast is Starbucks, which leveraged its existing terminals, existing loyalty programs, customer affinity for the brand and existing prepaid card infrastructure to create a program that creates instant scale for the brand, and doesn't try to create a ubiquitous, generic mobile payments business.

We might hear something in the fall. But there are clear reasons why PayPal is looking at mobile banking, mobile wallet and mobile payments in a general sense, and will emerge as a provider in some capacity.

The angle might build on PayPal’s strength as a trusted payment provider in the online marketplaces, as well as the advantages for international transactions. About half of online transactions use a credit card, while 22 percent use a debit card. But PayPal gets used 23 percent of the time, making PayPal as important an online payment mechanism as debit cards are.

So some of us would not be surprised to see some initiatives that build on the peer-to-peer payments business PayPal already runs. See https://personal.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=marketing_us/mobile_payments. From PayPal’s point of view, the service gets used both to buy things and send money to people. But retail transactions seem to hold potential that could vault PayPal into an entirely new segment of the payments market.

A new payments startup, Naratte, uses ultrasound to authenticate and transmit payment data. PayPal is reported to have looked at the approach.

The company’s founder, Brett Paulson, also has built a demo app specifically leveraging PayPal’s API that enables contactless “tap and go” transactions on almost any phone on the market today.

The payment technology, called “Zoosh,” establishes a secure link between payment source and merchant by generating a high-pitched sound which is inaudible for the human ear.

“All you need is a speaker and microphone, which you already have on your device,” says Paulson, Naratte’s chief executive and cofounder. “We’ve built everything in software so you just download an app to get a contactless experience.”

Laura Chambers, PayPal’s manager for mobile, also has been quoted in a statement saying that she and PayPal were “very excited about Naratte’s Zoosh technology” after seeing demos. “Zoosh’s approach provides instant scale,” she offered, “which is a major hurdle for most mobile payment technologies.”

Mobile Banking Demand Next 6 Months From New Smart Phone or Tablet Buyers

More than half of smartphone and tablet owners use their devices for some form of mobile banking (distinct from payments or wallet operations), according to a study from Chadwick Martin Bailey and iModerate Research Technologies.

About 21 percent of users view balance information while 17 percent review transactions. Some 13 percent have transferred funds. About 12 percent have viewed their available credit, while 12 percent have paid bills. The survey was not intended to uncover demand for new mobile payment or mobile wallet services, or peer-to-peer payments.

But the survey suggests it is new users, who have never used any mobile banking service, and who will buy a new smart phone or tablet within the next six months will fuel the growth, as many current smart phone or tablet owners already seem to have made up their minds the feature has no value for them.

The study of over 1,400 U.S. consumers also found that 45 percent of U.S. consumers own a smartphone or tablet. Of that group, 52 percent currently conduct some form of mobile banking.

However, the real growth in the mobile banking market will come from those who don’t yet own smartphone or tablet. The study shows 39 percent of those who plan to buy a smartphone or tablet in the next six months are highly likely to use their smartphone or tablet for mobile banking. By contrast, only six percent who already own a smartphone or tablet, but don’t mobile bank say they are highly likely to start in the next six months.

“I think what we’re seeing is that mobile banking among current smartphone owners has plateaued,” says Jim Garrity, vice president of Chadwick Martin Bailey’s Financial Services practice. “For all intents and purposes, those folks have already made a decision about whether or not they want to participate in mobile banking. The real opportunity is in the 14 percent of consumers who are planning to buy a smartphone or tablet in the next six months, because among that group many say they are highly likely to participate in mobile banking.”

The study also found consumers are becoming more comfortable using their smartphones to make purchases as well. According to the survey, 45% of smartphone owners made a purchase with their device over the past year. The majority of those payments are tied to credit cards (49 percent), while 40 percent of those purchases were tied to debit cards and PayPal.

See the full results here.

PCs Still Main Platform for Online Newspaper Reading, SayscomScore

About 90 to 98 percent of online newspaper reading, across countries, still happens on PCs, comScore reports. Between one and seven percent of newspaper reading occurs on mobile phones. Though tablets are heavily used for content consumption, tablets do not yet represent much newspaper reading activity, ranging from nearly zero to less than two percent of total online newspaper reading, says comScore.

Of course, media executives have high hopes for tablets as a device that could spur heavier online readership, especially paid readership.

The iPad is currently the dominant tablet device across all geographies, contributing more than 89 percent of tablet traffic across all markets. The iPad’s contribution to total non-computer device traffic is highest in Canada (33.5 percent). Brazil has the second highest non-computer device share of traffic coming from the iPad at 31.8 percent, although non-computer devices account for less than 1 percent of total traffic in the country. In Singapore, where non-computer devices comprise nearly 6 percent of total traffic, the iPad accounts for 26.2 percent of this traffic.

Newspaper Site Category Traffic by Geography and Device Type May 2011 Multi-Country Report for Selected Countries Source: comScore Device Essentials
	Computer	Mobile	Tablet	Other	Non-Computer Traffic Newspaper Category Index*
UK	90.2%	7.4%	1.9%	0.5%	184
Singapore	91.2%	5.8%	2.8%	0.2%	149
Japan	93.0%	5.2%	1.4%	0.3%	151
U.S.	93.3%	4.6%	1.8%	0.3%	108
Australia	94.6%	3.4%	1.9%	0.2%	126
Chile	95.4%	3.9%	0.4%	0.3%	226
Canada	95.5%	2.2%	1.9%	0.4%	131
Spain	96.3%	2.4%	1.2%	0.1%	163
India	96.9%	2.9%	0.2%	0.0%	94
France	97.7%	1.1%	1.1%	0.1%	159
Brazil	98.1%	1.0%	0.8%	0.1%	316
Germany	98.1%	1.1%	0.7%	0.1%	117
Argentina	98.6%	1.0%	0.3%	0.1%	124

*Non-Computer Device Traffic Newspaper Category Index = Share of Non-PC Traffic for Newspaper
Category / Share of Non-PC Traffic for Total Internet x 100. Index of 100 indicates average representation.

Device Essentials Measures Digital Traffic from All Devices