“SEO is a marketing function for sure,
but it needs to be baked into a product,
not slapped on like icing
after the cake is baked.”

Duane Forrester

Apple Surprise Market with NFC Position

Apple have yet again managed to surprise the market with last week’s launch of the new iPhone 4S. While I’m not focusing on the rather underwhelming advancements of the iPhone 4S, the real surprise is what wasn’t included in this model – NFC.

Some commentators are suggesting that this may be because Apple haven’t managed to secure enough components to build sufficient volume of the iPhone 5 which had been on the drawing board (which would include NFC); while others are saying that the omission of NFC for this model is because there isn’t any industry standard for NFC and, in particular, contactless mobile payments.

The past decade, together with the much talked about legacy of Steve Jobs, shows us that Apple does not produce evolutionary products, but rather revolutionary products. Apple were the ones who created an industry standard for music downloads; a standard which subsequently allowed Apple to dominate that industry.

It is likely that Apple, in line with their history of developing simple and intuitive solutions, is still in the machinations of identifying what the consumer really wants and how and when to deliver it. It would seem they are not going to be rushed by Google Wallet or the imminence of ISIS, but rather go to market with a sought after product when it makes sense to do so.

Perhaps this now means that phone manufacturers like RIM and Nokia have an opportunity to be proactive rather than reactive in this space. Perhaps they too should be looking at what it is their target market wants rather than waiting to see what it is Apple is going to offer. Perhaps once the stakeholders in the emerging sector take stock and look at what solution the consumer wants, and one that doesn’t place added cost on the merchant, then we might see some real and meaningful traction in contactless mobile payments.

The blogging world has been full of recent comparisons regarding Google Wallet, ISIS and PayPal. But there has been no real commentary on what the consumer feedback has been; what the usage looks like; and, whether or not any of them cater to the consumer’s needs or a wants

 

Although possibly contradictory to statements previously made by his counterparts in American Express, Stefan Happ, SVP Americas, recently stated at the RAMP conference in Chicago that he is “not sure if the right solution for the end user has been found yet” when it comes to mobile contactless payments. He went on to say that his division would take a step back and only act once such a solution was evident. Perhaps he is waiting on their purchase of Serve to serve up such a solution, or perhaps he is bold enough to wait for the right third party solution to come along before then embracing it.

Last week a New York venture capitalist suggested that when you have Square on one side and Google on the other, that anyone in between is facing an uphill battle. The definition of Mobile Payments is rapidly becoming as broad as the definition of e-commerce became. Obviously Square is providing a merchant oriented mobile solution while Google is providing a consumer orientated contactless mobile wallet. In regards to contactless mobile payments though, is a mobile wallet really what the consumer wants or should we really be looking to provide a General Purpose Reloadable (GPR) solution – perhaps linked then to other loading sources like a bank account rather than just credit cards? Certainly with recent fee increases by the big banks on debit cards there would seem to be a market for this.

What is evident to nearly everyone you speak to is that take-up will be driven by early adopters. Early adopters could be described for the purposes of contactless mobile payments as being people between 18 and 26 years of age.

Such a target user is likely going to be looking for the sort of simple and intuitive solution Apple has a history of delivering. The Google marketing machine though is drawing parallels between its Google Wallet and the ‘George Costanza wallet’. Forgetting for just a moment that the target market probably don’t know of George Costanza, nore would they identify with his situation – doesn’t this imply that Google Wallet is not supposed to get rid of the clutter but rather transfer it onto your mobile phone? Has anyone really thought this out?

One would think that with such an impressive list of players associated with the Google Wallet that they could come up with a more relevant campaign message. Presumably though to do so is only possible if the proposition itself is relevant to the target market.

Despite the positive spin Google is placing on the take-up of the Google Wallet, there is very little comment (positive or negative) which would suggest that people are actually using or in fact enjoying the user experience.

Google is certainly a very successful and innovative company, but they appear to have a history of throwing many new products out into the market and see which of them gain traction. Perhaps the most recent example is Google Plus. They had a tremendous uptake in the first few months of people wanting to see what all the hype was about, but at the end of the day no one is using it. Can this simply be put down to the fact that Google roll out these new products for the wrong reasons, or is it because companies like Google are not designing a product to meet a customers need or want?

Notwithstanding their continual statements about entering the mobile payment space, PayPal don’t seem to be much different when it has come to their product design. Even with their recent acquisitions of Zong, RedLaser and Magento, it would appear that PayPal are merely enhancing their e-commerce platform and extending it into mobile commerce (being purchased made in-app from a mobile handset). Even their annual PayPal X conference which was originally designed to exploit their advancements in the mobile world has now been renamed ‘x.commerce’ and is focused on new commerce platforms.

ISIS currently seems to have the best plan of attack. With VISA, MasterCard and Discover on board, the ISIS platform seems to be the best positioned to cater for a user’s needs and wants – albeit it is still a mobile wallet rather than a GPR account.

Perhaps ISIS can be considered the open platform to mobile payments as Android was meant to be the open mobile operating system to the mobile phone market. All this really means is that it will be up to the individual banks or carriers to ultimately set and position the end user proposition – something big companies don’t seem to be doing well.

But the fact that ISIS won’t be ready to launch until the end of 2012 could be a huge deterrent if there are already other leaders in the market who have got the customer proposition right.

All this suggests that the big players have disregarded the thoughts of both the user and the merchant in in developing a workable and sought after product.

As I have said before; the best way to educate a user is through a merchant. But once again this brings up the issue of interchange. If merchants are to embrace mobile payments then either the card companies need to deliver a more reasonable interchange model on sub $10.00 transactions, or those behind emerging mobile payment businesses need to develop a hybrid of a closed and open loop platform which bypass the card companies on certain transactions such an interchange model.

This all raises the question, what is Apple doing? There will continue to be speculation from many commentators who claim to speak with authority, but one thing is for sure; whoever first meets the needs and wants of the consumer will firmly entrench themselves in this emerging market – even if that is alongside Apple.

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