PayPal, Gas Station Chain use GPS to Launch Mobile Payment

Regional gas station and convenience store chain Cumberland Farms has launched a new "SmartPay" mobile app that uses GPS to launch a PayPal account transaction and offers a five-cent-per-gallon discount for doing so.

The app can be launched at a supported Cumberland Farms location, and then GPS is used to determine where the user is. Once the user enters the pump number, the app automatically makes the payment and emails a receipt.

Some might argue that is perhaps a more-interesting use of "location-fixing" technology than near field communications.

Cloud Computing Will Drive Revenue, But What Types, How Much?

Service providers widely believe cloud computing will be an important source of new revenue, and there is truth to that belief, but possibly not the way many are thinking about the business. Cloud computing includes a number of discrete potential revenue streams, ranging from direct retail sales of applications to end users, either consumer or business. There is the rental of computing cycles and storage capabiltiy, as well as "platform" as a service, where a customer might rent an applications environment, often for purposes of developing new apps, for example.

By most current projections, SaaS will represent the biggest business, representing the most revenue. IaaS might be the next biggest, while PaaS will remain the smallest business, in terms of revenue. One forecast by the Yankee Group has SaaS representing perhaps 70 percent of total revenue in 2013.

North America, specifically the U.S., currently represents the largest opportunity for SaaS, and it is the most mature of the regional markets, Gartner argues. SaaS software revenue is forecast to total $9.1 billion in 2012, up from $7.8 billion in 2011, Gartner says. But that is revenue earned by software suppliers, not directly by hosting companies, data center providers or telcos.

North America shows the highest SaaS deployments in expense management, financials, email and office suites, for example. It might be prudent to discount the notion that cloud computing revenues for service providers running data centers will capture very much of that sort of revenue.

Verizon Promises Mobile Video Service

Mobile video is the benefit for end users if the Federal Communications Commission allows Verizon Wireless to buy spectrum from several U.S. cable operators. Though it is not formally linked to the spectrum sale, Verizon has agreed to provide its products to Comcast, Time Warner, Cox Communications and Bright House Networks under “agency” agreements, in return for Verizon rights to sell cable products under similar agreements.

The agency agreements allow the cable companies to sell existing Verizon products, under the Verizon brand name and retail packaging, and allow Verizon to sell existing cable products, likewise under the existing cable names and packages. If the deal is approved, the partners would, in five years, be able to buy wholesale from the other partners and then “rebrand” them for retail sale.

One suspects there will be a tie-in with the new online video venture Verizon has created with Coinstar, the owner of the Redbox DVD rental kiosk business, though that has not been formally talked about, in public, by Verizon or Coinstar.

One suspects there are other implications, if Verizon’s spectrum buy is approved, and as plans for mobile video are developed. One clear problem is the amount of bandwidth any mobile video service would represent. Many users would find their monthly data caps are reached after watching just two movies, for example.

That suggests something will have to be done that removes that threat. Many have speculated that one solution is to exempt the viewing of such video from user data consumption caps. That also implies, though, that the video service providers and content owners can agree on some reasonable formula for “paying for” the use of such bandwidth.

Proponents of “network neutrality” might have problems with such deals, but that is one reason some have argued against confusing “no blocking of lawful applications” with separate policies to manage networks for performance, or to create different charging mechanisms for different applications and use cases.

Entertainment video has been the poster child for such differential pricing. Other real-time services such as voice and conferencing have been similar examples of applications that virtually demand packet prioritization to maintain quality of experience, at times of network congestion.

Congress, FTC Look at "Mobile Money"

Though executives at banking and financial services firms, as well as telcos, are well aware of the key role regulators play in shaping their businesses, technology firms, especially software concerns, probably do not fully realize how much regulation ultimately will shape the mobile commerce, mobile payments and mobile wallet businesses.

At the moment, most of the activity consists of efforts by participants to get traction with key stakeholders, early in the creation of what most hope will prove to be large businesses.

At some point, regulation is going to play a bigger role in shaping the fortunes of contestants, though.

"Money" is a highly regulated function, and banking likewise is a business with lots of regulatory context. Some of those rules relate to consumer protection, while many others limit and define the lawful scope of what can be done.

So it is no accident that both Congress held hearings on mobile money in March 2012, while the Senate and Federal Trade Commission also plan their own hearings in April 2012.

“We are, I think, on a precipice of some fundamental change in the way money is exchanged between consumers and businesses,” said Rep. Shelley Moore Capito (R-W.Va.) during the House Financial Services Committee consumer credit panel’s hearing on The Future of Money.“


The Senate banking committee also will hold the latest in its series of planned sessions on the mobile payments issue, and it plans to call witnesses from the Federal Reserve system to discuss information security and financial disclosure issues.


Separately the FTC will hold hearings on April 26, 2012. 


Among the questions are "jurisdiction," as one might argue the Consumer Financial Protection Bureau, the Federal Trade Commission, the Federal Deposit Insurance Corp., the Federal Reserve or  Federal Communications Commission have roles to play. 


Unfortunately, some contestants will wind up finding out that regulatory bodies have imposed rules that make some business plans unworkable, others merely much less profitable. 

"Post-PC" Means More Androids than Windows Devices

Android will be the leading platform for “smart connected devices” by 2016, overtaking Windows and iOS in units shipped, according to International Data Corporation.

The IDC predicts that in 2016 shipments of smart phones, PCs and tablets will reach 1.84 billion. This will be more than double the 916 million shipped in 2011, which created $489 billion (£308bn) in revenue.

To Fix Anything, You Must be Able to Define "What is Broken?" In Mobile Payments, We Don't Know, Yet

Lots of consumer innovations and products fail. Some might say the failure rate is 50 percent to 90 percent or even higher. Given that track record, one would have to be skeptical about prospects for any of the proposed new mobile payment, mobile commerce or mobile wallet systems. Even if any of those efforts ultimately do manage to change the shopping, buying or paying experience, most of the current iterations will not survive.

So having a clear understanding of precisely what is to be fixed might be worthwhile. Some of us have argued that the retail, in-store payments process, in fact, is "not broken." Retailers would prefer not to pay as much as they presently do to conduct the transactions. Payment processors would like to protect those transaction revenues.

But "paying for things" doesn't seem, in North America, to be something that causes consumers lots of difficulty. Nor is the ultimate potential reshaping necessarily clear. Up to this point, there has been a clear emphasis on changing the "retail" payments process. But retail shopping is clearly under serious pressure from online alternatives.

Best Buy is moving away from the "big box" business model as online competitors continue to chip away at the formerly-successful business model. Some might question the long-term potential of the moves, as many likewise would question whether Barnes & Noble can survive as an operator of retail locations as well.

That is not to say all retailers are destined to disappear. But many "big box" approaches might not work as well as they have in the past. Some might argue the only long-term model is the "Apple Store," where the object is to showcase merchandise and explain, educate or demonstrate its use, not "sell" it. That will have "payment process" implications, as many customers might "purchase" in new ways other than standing in front of a cashier operating a traditional point of sale terminal.

But there are other implications for mobile commerce as well. If fewer retailers are selling products, and fewer customers are "buying" in many retail settings, what does that mean for all the effort going into mobile payment terminals, applications and systems? Will the mobile device assume an important new role as a device to show the product catalog?

Will the mobile increasingly become the checkout terminal? At a broader level, how might the "shopping experience" change?

Beyond that, what is "broken" about the commerce, shopping, payment or marketing experience? Unless something is broken, there is no "fix." And if past experience with technology provides any clues, those proposed remedies need to provide a consumer experience that is about 10 times better than the current process.

Also, any proposed new process and experience will involve some amount of end user behavior change. So the pain of enduring the present state of things has to be greater than the pain of adopting the new solutions. It is not yet clear any of those preconditions exist.

It is not enough to say a new way of doing things is "better." It must be an order of magnitude better, and in consumer or end user terms, not in terms of how fast, how powerful, how different the new experience is said to be. Though hard to measure, it is the experience itself that must be an order of magnitude better.

LG Flexible E-Paper is Coming

People think e-paper, flexible thin displays that mimic paper, will be important for e-reading apps. As often happens, though, people might find other uses for the technology. In some cases, it might not be the flexibility but the thin or light display that emerges as the value driver.

Some of us have been thinking it would be an ideal medium for point of sale displays, or digital signage, for example.