Square Raises $100 Million At $1 Billion Valuation

Square, the mobile payments provider best known for the free one-inch credit card "reader" that plugs into a smart phone (iPhones and iPads at first) and lets anyone accept both credit and debit-card payments, has rasied $100 million in financing, with a $1 billion valuation, the Wall Street Journal reports. See this (Wall Street Journal subscription required). If not, see this.

The valuation will worry some observers, confirming a possible investment bubble in Internet-related start-ups that promises much pain when the bubble finally does burst. But Square's rapidly-growing transaction flow also indicates that mobile payments finally, after many false starts, getting traction.

Square's value proposition also highlights the complexity of roles in the new mobile payments ecosystem. Square sells a service built on a new type of point of sale terminal (the "square" adapter) and so might be said to compete with VeriFone. But Square monetizes the terminals in a different way, essentially making its money on transaction fees, as do credit card and debit card issuers. In that sense it competes with bank card providers.

Square also competes with Intuit, as both Intuit and Square provide special value for small retailers and other non-traditional retailers. And many expect PayPal to make its move into retail commerce, at least in part, with its own point of sale system designed to be used by smart phones or tablet devices.

But Square also has launched "Card Case," an app that would let users pay directly from their smart phones. That makes Square a contestant in the digital wallet space, where Google, among others, plans to focus.

Half of Twitter Activity from Mobiles?

As of May 2011, 13 percent of online adults used Twitter, according to a study by the Pew Research Center Internet & American Life Project. That represents a significant increase from the eight percent of online adults who identified themselves as Twitter users in November 2010.

Some 54 percent of respondents access and use Twitter on their mobile devices, which makes sense. Twitter is a quick reaction update application. Mobile devices are always with people, and can be used at any time, for that reason.

Facebook CTO Bret Taylor has been known to say that “mobile devices are inherently social," and that a third of Facebook users access the app on their mobiles. See this. It appears Twitter might be "more mobile and social" than Facebook, on that score.

Twitter Update 2011 - Pew Research Center

Tablets Changing App Behavior?

Today’s early tablet adopters apparently are using print media, PCs, and other devices less often than they used to, said Sarah Rotman Epps, Forrester Research analyst. Some 31 percent of tablet owners surveyed report they are using their PCs less, while 26 percent are using their notebooks or laptops less.

For some of us, the most important implications of tablet use are not the devices tablets compete with, but the ways application usage and time commitments change. 

It isn't clear whether tomorrow's mainstream adopters will use their tablets in the same way that early adopters do. But it seems likely they will. The bigger question might be whether tablet growth rates can continue at high rates given all the other devices consumers will want to buy as well.

Consumers who intend to buy a tablet in the next six months are almost twice as likely as US online consumers in general to want a new HDTV set, and they’re more than twice as likely to want an eReader, Blu-ray player, 3D HDTV, Xbox 360 with Kinect, and a host of other gadgets, says Rotman Epps.

One might well question whether it is possible for consumers to manage all that in the next six months. When compared with current tablet owners, would-be tablet

buyers have 21 percent lower incomes, are 51 percent more likely to set a spending limit for technology purchases, and are 75 percent more likely to say they delay other purchases to buy a new gadget.

There are some scenarios where PCs still will remain the preferred device. Office settings, where heavy content production is required, still seems to be the province of the PC. It might be reasonable to predict that tablets and smart phones will largely be preferred elsewhere than the office.

Tablets also seem poised to displace portable game players, but not consoles. Casual gaming seems to work fine on tablets, while more-complex games still require a console.

Video consumption in the living room still seems the province of the HDTV, while PCs are used at work and in offices, while tablets will be used elsewhere. There seems little reason to dispute the prediction that tablets will take share from offline products, PCs and e-readers.

Visa Launches French Test of microSD, Australia Test Raises Some Questions

Visa International is planning another trial of microSD-based credentials security, working with French bank Groupe BPCE.  Visa will be using microSD technology from Device Fidelity, which has long championed the use of NFC secure elements, rather than putting credentials into the subscriber information module used by mobile service providers to load subscriber information. See this.


The trial will use iPhone cases containing the NFC radio and antenna, as well as the microSD slot for the secure element. The Samsung Galaxy S and a pair of BlackBerry devices also will  be used in the trials.


The trial is significant because there still remains disagreement within the ecosystem about where to put the credentials loading and security functions. Mobile service providers want to load the credentials into the subscriber information module used to load mobile subscriber account details.


Others, including Device Fidelity and many handset manufacturers, would prefer some new method that does not use the mobile operator SIM. The differences of opinion have other angles, including form factor of the SIMs, perceived security advantages and, most importantly, control over the credentials loading process. 

Obviously, if credentials are loaded into the mobile SIM, a role automatically is created for mobile service providers in the payments ecosystem.

Visa, handset manufacturers and other interests might like to escape such control.


But there’s a reason new technology gets tested. Sometimes partners find some approaches are not suitable, for any number of reasons, or are not suitable at this time.



Australia’s ANZ Bank, which has been testing a microSD approach to storing credentials in mobile devices, has concluded its Near Field Communication test, but has decided not to proceed with a full deployment based on MicroSD technology.



The bank, in partnership with Visa, launched a trial in March 2011 where a MicroSD card pre-programmed with a user's banking details could be inserted into an NFC-enabled phone case on iPhones and Android-handsets. Users could then open an app on the phone to be used in conjunction with Visa PayWave readers.

ANZ Bank says the MicroSD card system used in the trials didn't measure up to the bank's needs, for some reason. See this.

FCC Wireless Competition Report is Inconclusive, Sort Of

The Federal Communications Commission’s 15th “Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile Services  makes no formal finding as to whether there is, or is not, effective competition in the industry” actually reaches no stated conclusion on the U.S. wireless market, in terms of effective competition, a surprise to some observers, who had predicted that the FCC report would declare the U.S. market “not competitive” in some substantial respects.

On the other hand, one standard test of industry concentration shows a "high degree of concentration." But many observers would simply ask what other state of affairs could possibly be the case.

The report does use the “Herfindahl-Hirschman Index,” (HHI), which is calculated by summing the squared market shares of all firms in any given market, and is a commonly used measure of industry concentration.

Antitrust authorities in the United States generally classify markets into three types: Unconcentrated (HHI < 1500), Moderately Concentrated (1500 < HHI < 2500), and Highly Concentrated (HHI > 2500).


In the mobile wireless services industry, the weighted average of HHIs (weighted by population across the 172 Economic Areas in the United States) was 2811 at the end of 2009, compared to 2842 at the end of 2008.


By that measure, the U.S. wireless market is “highly concentrated.” But observers will argue about what that means. Access services of any type are “highly concentrated” in almost every market, in the sense that there are typically two dominant wired providers.


Wireless markets typically have more providers than that, but even wireless is “highly concentrated.” Whether access markets, wireless or wireline, can be anything but highly concentrated seems to be the issue. There is a good reason why access markets traditionally have been “monopoly” markets. Until recently, it was thought impossible to have facilities-based competition in access markets.


In fact, in most markets globally, that will still generally be the case. Hence we see wholesale networks being built in several countries, the theory being that markets will not support more than one optical access network.


So you can draw your own conclusions. The report does not specifically say the the U.S. wireless market is uncompetitive. The HHI test would suggest the market is highly concentrated, though.


And many would say there is virtually no possibility of any other outcome in the access business. That is why wholesale-only optical access networks are being built in New Zealand, Australia and already is available in Singapore. In other words, traditional tests of market concentration always are difficult to apply in the access business, since there probably is only room for a small number of facilities-based providers, in any scenario.
Mobile voice coverage would not strike most observers as being anything but competitive. The report states that 89.6 percent of consumers can buy service from five or more suppliers, for example. To be sure, the number of competitors is higher, across the board, in more-populated areas, as you would expect.

Wireless broadband coverage is relatively consistent with the voice findings, as 68 percent of U.S. consumers have a choice of four or more providers. The caveat is that the. competition is mostly confined to more-densely-populated areas, again as you would expect. Rural consumers clearly do not have as many choices.

Google Tries Social with New Google+

Where Does Tumblr Fit?

If you are familiar with blog software and Twitter, you might wonder where Tumblr fits, as not really a replacement for a traditional blog, and it’s not a substitute for Twitter. You then will have to decide if you have time to add yet one more social tool for which you must create content.

Tumblr can be used primarily as a microblog, which is to say, a content site that doesn't require heavy text, but more pictures, videos and photos, but with more ability to post than Twitter provides. See Journalists, take another look at Tumblr

Parts of its utility are the “heart” and "reblog"features, which make it ridiculously easy to note that you "like" a postand to instantly “retweet” with the ability to replicate photos, videos, quotes and links while perfectly preserving the original source. Tumblr, some would say, is more socially oriented than a traditional blogging platform, more suited to microblogging that is highly visual. See http://www.tumblr.com/explore.

But here's a commerce site built using Tumblr. See http://blog.pret-a-portel.com/post/4788460184/the-real-deal-anna-karina or http://pret-a-portel.com/.