NFC Payments, Dead, Dead, Dead…

NFC (the technology behind contactless payments) has yet to really take off, and with two of the biggest names in retail dismissing the technology for payments, it looks like that NFC for payments is a dead technology…

In a recent article published on “thegrocer.co.uk”, Tesco dismissed NFC payments as passed their sell by date. Tesco’s enterprise consultant architect, Lyndon Lee, told the Mobile Payments and Value Added Services conference that NFC offered no proprietary value for retailers and that it wasn’t “cool” enough for the next generation of shoppers.  This echoes statements made by Walmart not too long ago.

When you look at the experience of using contactless payments, you would have to agree with Lyndon Lee’s statements. What does NFC payments give a retailer like Tesco over standard Chip and Pin transactions? The answer, the time it takes for the user to tap in their 4 digit PIN. That’s it. Nothing else is gained. So there is no real benefit to the retailer, not even the benefit of offering something your competitors don’t offer. Consumers in a store that have NFC, still need their cards, still need to use those cards and essentially have the same experience as in a store that doesn’t have NFC. With that in mind, why would you invest in NFC contactless payments across your thousands of checkouts when there is no benefit?

Is the technology cool enough for the next generation of shoppers? Well that’s a little harder to judge, as when used in-side a mobile phone it may well be seen to be “cool” to shoppers. But inside a mobile phone offers other challenges and barriers to entry for the consumer (those for sure aren’t cool). An additional issue is also one of perception, what feels “safe” to tech savy shoppers. Simply waving a phone over a reader doesn’t inspire security confidence, knowing your card details are being transmitted by their phone.

 

Cards are the issue

The problem though for NFC payments, is that it is essentially a technology that was never designed for payments, rather sharing small chunks of data / communications very quickly. I can think of many examples of where NFC is definitely not past it’s sell by date, and is a very “cool”. Take for example wireless charging on a stand, that using NFC then triggers your phone to launch a particular app, like your calendar, mail, tasks, or music. That’s pretty cool, and works great with a Nokia Lumia 900 for example. That’s what the technology was designed for, it was never designed to initiate payments, and because of that along with the nature of the “Card” infrastructure, it’s never going to offer merchants anything proprietary or that different in terms of experience (or security). Not even when you tie it to Mobile Smartphones.

When thinking of NFC in payments, if you are familiar with Sony’s Minidisc, you might start drawing comparisons. Initially, the Minidisc was a great idea, it provided all the flexibility of a cassette with the sound quality of a CD but in a tiny format that was mobile. The problem was that window where this was a great technology was so small, just on the horizon was the MP3 player, which at first was not that flexible or intuitive to use, but very soon would provide us with the first iPod, delivering thousands of tracks to a small mobile device that was made really flexible in terms of adding music, thanks to iTunes. Essentially, the iPod killed the minidisc. The same could be said for NFC in payments, with the rapid development in mobile technology, Wi-Fi and the Cloud, NFC is a technology that had a small window of opportunity within the Payments arena, but is surely to be replaced by cloud based payment gateways in conjunction with mobile smartphones.

 

Added value

Added value to merchants is essential, and basically NFC offers only a slightly different experience when making a payment, so there is no added value. Merchants are looking for ways to engage with customers via mobile devices, and payments provides a cornerstone to be able to do that effectively across a wider net of customers. So whatever a merchant looks at for their payments, it needs to tie in with their vision of adding value to the customers shopping experience with them. Again, technologies like smartphones, Wi-Fi and the Cloud provide the platform in order to be able to deliver added value. With this in mind, do we really need a “card”? Something that was created pre the digital revolution, pre smart phones and pre the cloud? Probably not…

So could the mobile phone, digital wallets effectively kill off all cards? We think so…

Web Developers and Mobile Payments

Now at first you may think “What? What’s web developers got to do with mobile payments?” and for the majority of mobile payment solutions out there I would agree. However, we are living in a digital age, and making a payment on your mobile phone shouldn’t be restricted to just paying in store. Actually, in many ways mobile payments are the technology of the future, but walking into a bricks and mortar store is very traditional – an old fashioned way of shopping some might say. So mobile payments should include making purchases over the internet or within a mobile app. With this in mind, there is most definitely a role for web developers to play, in offering mobile payment services to their web customers.

 

Mobile Payments online

As a consumer I want the security of using my personal mobile phone to complete a financial transaction, and online I want that security more and more. Let’s face it, fraud online is a growing concern and for many consumers out there, it is the fear of online fraud or identity theft that deters them from spending money with certain stores. Before someone actually spends money online they really need to feel secure and trust the business. This is one of the reasons (along with ease of use) that people do trust the PayPal brand when they see it on a website.

Mobile payments can provide the answer to online security issues while reducing PCI compliance issues (if your website processes cards). Mobile payments will also help online businesses maximise their profits, and that is done simply by drastically reducing the fees businesses have to pay for payment processing.

 

CloudZync: Delivering a new cloud commerce platform

 

How do they work?

CloudZync provide a mobile payment solution (Zync Wallet) that is an app that a consumer installs on their mobile device. This enables them to make mobile payments to any store or website that accepts payments in this way. From the web, all a web developer needs to do is ensure their customer (the business) is signed up to CloudZync and has been authorised as a CloudZync merchant. The website needs a few lines of code (either J-Query or an iFrame) added that enables it to communicate with CloudZync. And that’s it, well in a basic form. The development integration effort is minimal really, especially if you are a web developer who has experience of delivering eCommerce solutions with technologies like ASP.NET and PHP.

The experience for the consumer is a really seamless, safe and a secure one. On the businesses website, all they need to do is opt to pay using their mobile phone and provide their mobile phone number. The website (via the code added) then pushes the transaction to the consumer’s mobile phone, ready for authorisation. The consumer simply then authorises the payment within their Zync Wallet app and that’s it, job done.

There is no distinction between an “in-store” transaction and a “website” based transaction, because all transactions are authorised on the consumers own mobile device. This means there are no “card not present” horribly expensive fees associated with the transaction.

 

Fees

Merchants that accept mobile payments via Zync Wallet need only pay for the transactions that are completed, and they pay a simple flat rate fixed fee per transaction. This fee is dependent on the amount of transactions the merchant completes, but ranges from less than 1p up to a maximum of just 15p per transaction.

 

No brainer

For businesses, accepting mobile payments like this really is a no brainer. There are simply no fees to pay if a consumer doesn’t make a mobile payment, and when they opt to complete a payment using their mobile phone, the business pays a small fee (saving them money on any other form of payment). In addition, the website is far more secure regarding its transactions, and equally importantly, delivers a personalised and seamless customer experience.

Also, remember that with Zync Wallet you aren’t limited to just payments via your website. You can provide the same user experience to your customers while taking over the phone transactions, and face to face, either in-store or out and about via a merchant app installed on your business mobile phone.

There are also many other benefits of using Zync Wallet payments, including access to CloudZync business services which allow businesses to interact further in a personalised fashion. For more information visit http://www.cloudzync.me/business or if you are a web developer looking to register your services with CloudZync, then visit http://www.cloudzync.me/developer

Zync Terminal, A business app for mobile payments

There are a few neat ways of allowing businesses to use their mobile phones to generate and process payments out there, Square is one that really springs to mind.  But the problem here is you aren’t really dealing with mobile payments, rather you are using your mobile phone to process card payments. For those of you who aren’t familiar with Square, Square provides a dongle that can plug into an iPhone, when used with the Square app, a credit / debit card can be swiped and charged (user has to sign the screen). This application makes taking payments for businesses a little more flexible – especially if you are a mobile business, think hair dresser or burger van (think my stomach may be leading my thinking there).

Zync Terminal, enabling any mobile phone to process mobile payments

Square has lead the way in innovation with this particular type of payment processing, and there are now quite a few “copy cats” shall we say. Some are exact replicas, some, like PayPal and Intuit mobile offerings are little, well odd. These solutions require the merchant to have not just a mobile phone with an app installed on it, but also separate card processing hardware. The mobile phone is used to enter the amount for the transaction, while the separate hardware is basically used to take authorisation of a card payment via chip and pin. This additional hardware is paired to the mobile device via bluetooth, with the mobile then using 3G or WiFi to connect and have the actual transaction processed…Again not exactly mobile, and the check out process, not exactly smooth or rewarding for either party.

The big problem though for these types of solutions are the fees that merchants have to pay. As a business I am loosing typically over 2.5% per transaction, and that really does add up. There are also issues with trust and security, and here in Europe the idea of signing a phone to authorise a payment isn’t confidence inspiring – especially as we have got used to Chip and Pin. You have to sign with Square, while PayPal’s additional hardware solution does enable Chip and Pin. (Though pairing via Bluetooth again, doesn’t inspire security confidence).

So what other options do businesses have in order to process non-cash payments quickly and easily?

 

Zync Terminal

Processing non-cash payments quickly, easily and importantly cheaply is key to businesses. Zync Terminal is a free mobile app that enables merchants and businesses to generate and process true mobile payment transactions. These payments have to be made by customers using the Zync Wallet app installed on their mobile device, so there is a limitation there, but in terms of fees and security, Zync Terminal really is a no brainer for any business.

The app is free to install for a merchant, there are zero administration fees, no limits on the number of devices you install the app on and zero monthly payments. The fee structure is simple, the merchant just pays a fixed fee for each transaction they process successfully. Quite a refreshing approach that drastically improves the consumers experience and the merchants, while helping the merchant with their profitability (saving money on every single transaction). Transaction fees are not only cheaper than costs associated with cards, but also with costs associated with handling cash.

The big reason behind the fees structure is that Zync Terminal and Zync Wallet don’t accept VISA / MasterCard schemes. These schemes are designed and implemented for cards, and as such, the nature of a card with un-encrypted information will always have a limitiation in the digital world and security threats. In-stead, Zync is a scheme in its own right, a scheme designed and engineered for the digital world and mobile world we live in. Because of this, transactions are far more secure, personal details are far more secure, and financial information, yes you guessed it, is far more secure.

 

The process

So what’s the process for the merchant and consumer? It’s very simple, and can be carried out currently on a Windows Phone or Apple iOS device (support for Android and Blackberry is coming soon). Using Zync Terminal the merchant simply enters the transaction amount, and then scans the consumers Zync Wallet payment screen. The merchant is then alerted to some basic customer details, enabling them to verify the consumer further if they wish. The user then must authorise the transaction on their own mobile device within their Zync Wallet application (they have to provide a PIN). Once accepted and authorised by the consumer, both the merchant and consumer receive a notification that shows the authorisation code for that transaction. That’s it, all done. The whole process can be over in a matter of a few seconds.

In terms of security, each transaction is checked in real time for fraudulent activity. In addition, both the merchant and consumer is authorised by CloudZync and both the merchant and the consumer can verify each other’s details. Oh, and remember the merchant has had to sign in and register their app and device, and the user provide a PIN. For the consumer, they too have had to register the device, login and authorise each transaction with their PIN.

 

Available now

Businesses can sign up to Zync Terminal free of charge. See the CloudZync website for fees and additional benefits, such as access to CloudZync Business Services to help grow your business through other mobile focussed services.

You can sign up for free on the CloudZync website business registration page.

The apps will be made available very soon and CloudZync will send out priority notifications to those users who register early.

So lets look forward to a new era of digital, secure, mobile payments…

New iPhone? Apple Innovation? Be realistic!

It seems that we have yet again got a new round of Apple rumours regarding another iPhone being released. iPhone 6 in Q2 of this year (2013), Apple innovation? I don’t think so!

People cannot expect innovation with each release of the iPhone

 

It’s amazing that basically we get the same rumours from tech bloggers every year, and I am starting to think that it’s nothing to do with Apple, rather its bloggers not really looking for tech to talk about, rather relying on their stable diet of Apple blogs – with fab boys and haters all reading them, commenting away, driving traffic back to their website without actually writing anything with real substance or research.

I think though this trend has been born out of the innovation that was the iPhone and the massive influx of readers of tech blogs because of it. That single massive leap forward in mobile experience seems to still be the fuel of most tech bloggers (especially when we talk about mobile). So is it no wonder that they keep going back to the iPhone, even if we have a new one coming out or not?

 

Reality Check

We know that Apple release a major new phone every 2 years tops, which is usually just preceded by an iOS major update. So towards the back end of last year (September) we got iOS 6 followed closely by the iPhone 5. So if you think we are going to get some major updates within 12 months of that then you are being silly. I have no doubt that an iPhone 5S may well be on the cards, but it’s not going to happen Q2 in 2013, at best it will be Q3 probably Q4 to at least align with some of the Apple faithful coming out of contracts from 4S devices.

The rumours regarding innovation of the next iPhone are also typically very farfetched and people’s expectations are also becoming highly un-realistic. A great example of rumours that cannot be true is the good old NFC support claim. It seems since the 4 we have had rumours of NFC capabilities in the device, and yet no one stops to think that would require an iOS update to support the technology too. So why when iOS 6 was released (with no hint of support for NFC) did we get the same rumours again about NFC in our iPhones? I would also like to add, is adding NFC to a mobile phone really that innovative? Nokia had NFC in pre-smart phone devices a long long time ago…

 

Innovation

It seems that bloggers are claiming Apple must get innovating again. This is usually shown up in the comments of a blog post too, lots of commentators claiming Apple is stagnant, that nothing has happened since Steve Jobs passed away etc etc. To all these people, I would love to ask what do you expect?

Innovation isn’t something that happens each year, you can’t keep innovating, innovating and then innovating some more. What happens is there is a break through from R&D (not necessarily even from that company), they then release their product which we all see as a leap forward, a great example of innovation and then, what happens is that innovating is built upon, expanded, developed through iterations, evolved until at some point in the future, something even more innovative comes along and replaces it. The mobile phone world shows this perfectly.

Let’s think about innovation in the mobile world. During the 80s we had the mobile phone, sure it was a real brick, but essentially that was the massive innovation. Nothing happened innovation wise in the mobile world really, until 3G networks and devices. All that had happened to that point was devices got smaller and a few features added to them, I don’t call that innovation, I call that evolution. With 3G, we then got innovative devices, mobiles that were also other devices, like our MP3 players, Digi cameras and provided us with software. Devices like the N95. We may have been spoilt because it wasn’t too long until we got a massive bit of innovation from Apple, the iPhone. That innovation wasn’t so much a “phone”, rather it was the touch screen experience, the OS and the ability to install our apps in a seamless fashion. That was the real innovation.

Since then, we have had a period of evolution again. So don’t expect mass innovation, and anyone saying people are innovating, like Samsung with Android, then to those people, I say you don’t know what innovation is. That’s evolution of someone else’s innovation.

If anyone is innovating at the moment, then it’s Microsoft. But they aren’t really innovating in terms of a mobile phone, rather their innovation is software lead, delivering a single experience and UI across any device. This innovation from Microsoft is not a massive leap forward like the iPhone experience delivered, rather a step forward that may at some point down the line lead to a bigger innovative jump…

 

Quick Summary

Innovation doesn’t come round year on year, it doesn’t even come round every other year. Innovation comes round when it comes, at the moment we aren’t in a position to expect something brand new and highly innovative. Rather we should expect to keep improving our mobile devices, so when Apple deliver a new iPhone and its better under the hood, that it’s screen is improved, that performance is slicker, there really shouldn’t be people complaining that Apple aren’t innovating. Just because the company brought us the iPhone, doesn’t mean they can innovate whenever they wish. Innovation comes around when it comes around, until then, just watch and be impressed with how our devices continue to evolve, to improve and move forward.

Android fragmentation, development frustrations

As a developer we want to be able to produce nice maintainable code, ideally a single code base and deploy that on as many platforms as possible. While on the desktop this is pretty simple, come to the world of mobile and well, things get more complicated, with Android I would say a mess really.

Androids fragmentation makes it hard to support all devices, hell, there isn’t even a business case to do so

Things to consider

I don’t want to talk about cross platform development etc. rather there are a few blogs I’ve written on this subject already (see Cross Platform Mobile Development – CloudZync blog, and one of my recent blog posts, Cross Platform mobile app) , so for the point of this post, we will presume that you are going to build a native app with a technology like Xamarin (Monotouch). So what challenges are there then to build an app that works on multiple platforms?

Well first off what platforms are supported? At the moment, that’s limited to iOS, Windows Phone and Android devices (no Blackberry in there at all – though I hope this changes if Blackberry 10 starts getting some form of traction in the consumer market). For each of these operating systems we still need to take into consideration the actual platform style, there is no point in trying to deliver a Windows Phone type app to an iOS device as it simply won’t work (they don’t share the same controls and the look and feel would be a very jarring experience). You may be thinking that that means you still need to maintain separate code bases, even with our cross platform technology, but you would be wrong.

The beauty of C# and the whole Microsoft development environment is the way you can structure applications. If you are familiar with MVVM then you will understand my point. MVVM (Model View ViewModel) allows a developer to separate concerns within the application, to be very basic, it means we can separate out the UI elements from the actual working code. (Have a read here if you want to undertand MVVM) So we can maintain a single code base in essence for the app across the multiple platforms even if we change and modify the UI.

Fragmentation

This is the point of this article, while we have to do different things for different operating systems, we have to do different things still for the same operating systems even, well in the case of Android quite a lot different.

With Windows Phone and iOS, life is pretty easy, the only real issues relate to image sizes, so you have to package up a couple of different size options for icon images (which can be a pain). With iOS you do have to consider if you are deploying to an iPhone 5 as opposed to an earlier device, due to the screen sizes. For example, in the CloudZync Zync Terminal app (an app that allows merchants to raise and process mobile transactions), on an iPhone 4, we had to place a “done” button into the keyboard in order to hide it and show the rest of the screen, in the iPhone 5 this wasn’t needed as the screen was longer and we didn’t need to hide the keyboard (something that only really got spotted in testing).

So while doing these few extra things can be a pain, they are all pretty small. Then we look at Android, and this is when things get a little harder and a pain to be honest.

Android not only has a fair few flavours on the market, it also has a number of issues with the types of devices it can be found on. So while we are packaging up 2 versions of an image for iOS, on Android we find we could be packaging as many as 10! That’s a real pain to say the least, but not a real head scratcher.

The real problems arise when we look at the different flavours of Android and how they act. When testing apps across different Android flavours we notice we get different experiences. What is really frustrating is how different those experiences can be and what that means in terms of coding and testing. But things get worse still. For example we looked at developing our Zync Terminal App for Android and looked at a few different Samsung Galaxy devices. All consistent you would think, but nope, they aren’t. On top of that we noticed we had to use different API calls on different phones to access different parts of the device, such as the camera. That becomes so frustrating, not to mention time consuming in terms of development, but also in terms of testing, and time consumption means expensive.

Let me give you a little interesting point about our development, it seems that the cost of building and testing our app on iOS and Windows Phone together was about the same as the cost associated with just building for the major Android devices (so that’s us cutting corners and not supporting a lot of Android devices officially). To me, that can’t be right and is not a good place for Android. I can build an app for two very distinctly different operating systems with completely different experiences for the same price I can build an app for a single platform, Android…

Technically I’m not being fair, as this article suggests I’m looking at Fragmentation, so I’m actually developing for 3 versions of Android and umpteen Android based devices – as opposed to two operating systems in iOS and Windows Phone.

Conclusion

I want to maintain as much code with a common base, and we use Xamarin to deliver our apps on Android. The sad fact is that it doesn’t make much business sense to support all of the Android flavours or devices. The fragmentation issue just makes it too expensive to really develop for all Android variations (especially when we look at the demographics of a number of Android users).

While Android holds a very healthy market share (across all flavours) it makes sense to build for Android, but I do find myself hoping that iOS, Windows Phone and Blackberry start taking large chunks of market share away from Android. As an OS to for businesses to build for, businesses that want to maintain code across multiple operating systems, who want to deploy apps with great consistent robust experiences, Android is miles behind Apples iOS and Microsoft Windows Phone.

Mobile revolution just keeps on going

Even if you don’t follow technology, you will know that smart phones are continually moving forward and in many ways changing our daily lives. In just a few years, gone are our digital cameras, gone are our diaries, contact books, iPods and much more. We now use our mobile phones for work, for play and to make our lives a little more convenient, and this doesn’t seem to be changing…

 

What’s in your wallet?

One of the most exciting developments in the smart phone world is the concept that we can replace our physical wallets with our mobile phones. If you follow what’s happened with regards to our MP3 players, digital cameras, diaries etc then it’s a very real possibility. However, most technology companies who are looking into developing the digital wallet, think that wallets revolve around nothing more than our debit / credit card and the odd loyalty card. I personally have a lot more in my own wallet, and if you ask my wife what’s in her purse, well that list is pretty expansive.

So when I think of a digital wallet, I think of replacing everything in my current wallet with just one app on my smart phone.

 

Old infrastructure

One of the big issues for digital wallets is trying to leverage an ageing infrastructure and an old technology, one which was never designed for a digital economy. Yes, I’m talking about debit and credit cards. The infrastructure they are built upon is primarily a dial up, which isn’t the speediest now when compared to fibre optic broadband for example. In addition, debit and credit cards rely on essentially some very basic data, the long card number, start date, expire data and a CVV code, that’s it, and all that data is un-encrypted. One of the reasons why internet fraud is such a challenge is because to make a transaction, I only need those numbers, that’s it.

There is nothing wrong with debit and credit cards, but when faced with the digital economy it’s apparent that the concept of a static card with un-encrypted numbers is not cutting edge. In terms of mobile phones as a mobile wallet, a debit / credit card details need to be broadcast, and that’s where NFC (Near Field Communication) comes in.

NFC is a relatively newish technology, it allows data to be broadcast over short ranges and read. This is similar technology to that which is utilised by contactless cards, essentially your debit / credit card is broadcasting your card details waiting to be read. When in a mobile payment environment, the terminal reads the broadcast data, just this time it comes from your mobile phone (this is the process basically).

 

Fees

Every time a consumer users a debit / credit card, the merchant that is accepting the payment pays a fee for the privilege. Larger organisations get some good rates, however smaller organisations pay quite a premium for the ability to accept card payments. When we look at contactless there is quite an overhead for small businesses and when we look at solutions like Square and PayPal, the poor old merchant is in some cases loosing over 3% of their transaction in fees. That’s a massive amount of money over a 12 month period.

 

Mobile should be different

Mobile payments and a digital wallet, when looked at as a something new, independent of card schemes, can really make a difference to us as consumers but also to business owners. Remove the card from the transaction and all of a sudden payments can become a lot more secure and merchants don’t have to be paying through the nose to accept a payment.

This is essentially how CloudZync works with their Zync Wallet. Consumers install the Zync Wallet app (it’s a free app) to their mobile phone, register themselves and their devices and use a Zync Account just like a normal bank account. Put money in your account and you can then make mobile payments using your mobile wallet, Zync Wallet. No card schemes are included, rather it’s a direct link from your mobile to your Zync Account. This means that mobile payments are secured by CloudZync, no payment information is ever shared, not even with the merchant and ALL transactions have to be authorised by the consumer on their registered device.

Zync Wallet, finally an app that puts your wallet on your mobile phone

 

The Zync Wallet app isn’t just about mobile payments though, it’s also about replacing your actual physical wallet, so vouchers are included, loyalty schemes, membership cards and identification, anything you can include in your physical wallet right now you can include in your Zync Wallet app.

 

Parting thought

Mobile phones have helped us move forward, re-imagining diaries, calendars, digital camera’s, contacts, how we listen to music and now, with Zync Wallet, replace our physical wallets.

When technology is used to realise a re-imagined process, then technology can make a real difference. The trick though is to re-imagine, not to try and mesh together old technologies with new desires and requirements, when we do that, we simply don’t deliver something that works for business and doesn’t work for consumers…

Is there such a thing as a bad Smartphone?

If you go online and you look for articles on Smartphone’s you will no doubt find loads of reviews of particular phones, operating systems, features etc. and unfortunately you then more often than not get a biased warped view based on the authors preferred device, brand or ecosystem. Unfortunately actual facts and relative information back down to an average user is just lost or not present. Opinion in mobile is, well everywhere, and yet when we think about it, can we really purchase a bad Smartphone these days?

 

Dumb to Smart

It all depends on what you want from your phone, but many more of us now want our phones to be a useful device, be that just for searching the web, consuming some content or actually trying to carry out some small amount of work on them. This is illustrated by the amount of market share Smartphone’s now command across the globe. But if you are moving from a dumb phone to a Smartphone do we really need to know every feature of that device or ecosystem? Probably not…

 

Purchasing

My brother-in-law works for a mobile phone network provider here in the UK, and I always like to get his insight into the kind of people who come in and purchase Smartphone’s. The truth is that the majority of us just want a Smartphone, and because we have heard of the iPhone or Samsung Galaxy, that’s what we go in and ask for. We have no idea why we want those phones over another brand or device, just that these are the phones that people are aware of, and that’s great testament to both companies marketing capabilities. It also shows that many of us purchase mobile phones still very much based on brands we have heard of and what our friends have purchased. We don’t purchase a phone like we would a PC, spending time looking at the specification, the pro’s and cons of a particular bundle from the store etc etc. We still see phones as a short term thing which will get renewed in 12-18 months (if on a contract).

Obviously I’m generalising here. There are lots of people who pick their phone based on the quality of the device, the camera, the durability, performance and of course the operating system. But these types of people are the minority (though if you read blog posts or technology articles you would think everyone was a phone expert. We must remember that the majority of phone users do not go near a mobile phone blog or technology magazine).

As a mobile phone manufacturer or operating system, this all means that marketing and relationships with the network are the only way to shift mobile phones. The main audience therefore has to be those moving into Smartphone’s for the first time, mainly because anyone who has had a Smartphone for 24 months is probably attached to that operating system, and therefore more likely to stay with that particular device or brand. (Especially if they have purchased a large number of apps) For the likes of Nokia, RIM and HTC this means all is not too late, since Smartphone users make up just over 50% of the mobile phone market, that leaves another 50% of untapped customers. The battle lines therefore are still being drawn.

 

Consumer education

The problem for all mobile phone manufacturers, with the exception of Samsung and Apple, is that the 50% of potential new Smartphone customers are not that into the real benefits of a Smartphone device. Rather they are getting one because they can send the odd email, surf the web and perhaps use Facebook. Let’s be honest, any Smartphone therefore is a great purchase, and no doubt these customers will just request the phones they have heard of, so the iPhone and Samsung Galaxy.  That’s a problem…Though customers will be happy, they could have been a lot happier potentially with a different device or a different operating system, especially if they were shown or told about all the options.

An example is my own mother. She wanted a new phone, but was told to get an Android Samsung Galaxy, mainly because that’s what the sales guy had. He didn’t take into consideration any of her needs, requirements, what she was looking for neither in a phone nor from the OS. My mum actually wanted an OS that played nicely with her office work, an OS that potentially would tie up with her tablet that she is looking to purchase and something that was really easy to use, real easy. For me, that meant really only looking at the iPhone or a Windows Phone, of which the sales agent didn’t have much in-depth knowledge of. He could talk about the iPhone, but as for Windows phone devices or Blackberry, nothing to say at all….In the end I got my mum to pick based on the UI, what felt easiest for her to just pick up and use, and she went with a Nokia Windows Phone 610, an entry level Smartphone that does everything she wants and more.

The point here is that my Mum would have ended up with a phone that she would have thought was good, but not one that was great for her. I think that’s a problem manufacturers have to overcome with network providers and sales staff somehow.

 

Any Bad Smartphone’s?

Essentially, there are no bad Smartphone’s these days, technically. However, there are bad Smartphone matches for users. The problem is that sales staff don’t marry up what a consumer wants to any given device, rather they let the consumer just real off a phone they have heard of, or sell the device they have themselves. This means that a good Smartphone will feel like a bad Smartphone for a particular user because it simply didn’t fit their criteria, or they have since seen another device that better suited their needs….If sales agents and consumers treated phones like a very expensive purchase, one that needed to match to a consumers requirements, then we would see a very different mobile phone landscape of that I am sure, and there truly wouldn’t be a bad Smartphone….Until then though, status quo…

iPhone 5: What Apple got right

September 12^th was the big day and Apple finally showed us their new iPhone 5. However there wasn’t anything there that many of us didn’t know about already, such was the extent of leaks leading up to this event.  So far the reaction to the event is one of underwhelming acceptance…It seems that Apple hasn’t been an innovative company for some time now, rather everything they do is playing catch-up with other people’s ideas and innovations while attempting to maximise and squeeze yet more revenue from their current customers. This, Apple does exceptionally well at…

iPhone 5, it got no NFC right at least: Picture from engadget

Catch up on the iPhone 5 launch event here at engadget

So while there are many blogs, articles, reviews out there that show what’s wrong with the iPhone 5, and there is quite a list, I am going to focus on something they did get right, and that flies in the face of all the technology journalists, who on this subject often show they know nothing about technology and or business combined…Apple got it right when they opted NOT to include NFC in their device.

 

No NFC for the iPhone

While many reviewers are saying this is dangerous omission I have to say it’s highly sensible. If you believe what tech journalists are saying, then we should all be making NFC enabled mobile payments pretty much now, and they have based this belief not on fact, rather on marketing gumph from a few companies out there, VISA, Google and a bunch of phone networks. What they all fail to take into account is that customer experience is being put ahead of practicality, security and cost. In the real world, this means most businesses will not be using it.

The payments industry is pretty much in a mess, there is nothing wrong with the customer experience of using cash or cards, yet there is a common belief amongst businesses and customers that they should be able to make payments with their mobile device. This has lead to endless different approaches to mobile payments, almost all of which centre around NFC capabilities. However, let’s just think for a moment. Cards are not secure things; we know this by how easy it is to make fraudulent transactions, especially in a digital age. NFC is not a secure form of communication, VISA even state this in their own Patent applications. So put the two together and you get…A great demonstration of how we can use mobiles to make contactless payments, but ultimately a nightmare for merchants with endless costs and charge backs, essentially fraudsters saying “don’t mind if I do”. No wonder most merchants say “no thank you”….

Other phone manufacturers may have embraced NFC in their devices, but even then, each manufacturer and device OS uses it in different ways. Just because your device supports NFC doesn’t mean it supports contactless payments. We see this mess with Googles own Wallet only being able to support the one bank card, its own pre-paid card having to be pulled and you not being able to use your Google Wallet at a typical contactless payment point. Throw in the fact that the phone carriers want a bit of the NFC action and you can quickly see how messy this environment is. Sure it’s competitive, but it’s competitive because no one is doing the same thing and everyone is arguing over who owns what part of an NFC based transaction. Even Microsoft’s Windows 8 phones support NFC based transactions, but you need to get yourself a secured NFC SIM with your card details on it. Not exactly lending itself to you simply adding all your payment cards to the device. But this is because the phone carriers want some of the payment transaction action, and it’s a way to stay friends (at the detriment of practicality, customer experience and security).

I haven’t even spoke about costs of supporting NFC for the merchant, which essentially means new hardware, firmware, support and maintenance for that hardware and perhaps updates to their POS if they want to distinguish between a chip and pin card transaction, signature, card not present, or contactless payment, even mobile contactless payment.

So while so many seem to be singing the praises of NFC and perhaps mentioning concerns that the iPhone 5 doesn’t have NFC, I would say no NFC for Apple is a wise move. Apple usually only embrace a technology once it really has proved itself, so not to deter from the customer experience of using their devices. NFC is no different….As a reviewer of the iPhone 5 there are many areas of concern, lack of NFC is for sure not one of them…

Apple saying NO to NFC is correct…

It seems that the past 2 versions of the iPhone have had media speculating and claiming the iPhone will support NFC, primarily for some NFC based Wallet experience. Speculation surrounding the iPhone 5 is no different, especially as Apple have recently applied for a number of NFC based patents for mobile devices.

However, to date, Apple (and the people on Wall Street) has been pretty sceptical about the whole NFC wallet experience, and so far Apple has said NO to NFC in its devices. I personally think this is a wise move by Apple, and shows that they aren’t just jumping on a technology bandwagon, rather assessing the pros and cons of the technology for certain uses (commerce it seems not one of them). Unfortunately others see this as a ground to get ahead of the competition, and are investing heavily in the technology, without I feel adderssing the issues with NFC commerce. The upcoming Microsoft Wallet uses NFC in a secured SIM fashion, making it quite restrictive, while the Google Wallet (which is an NFC based solution and has been available for sometime) struggles to gain any form of real traction with consumers and may well be dissapearing from Sprint if rumours are true.

NFC: Not the right technology for commerce

 

NFC in a mobile device

NFC has been available in certain mobile devices for a number of years. Early Nokia devices supported NFC but, well let’s be honest, what could us users do with NFC? There are a number of issues with mobiles supporting NFC, mainly due to the antenna required for NFC and where to securely house it in the mobile device itself. Many manufacturers have experienced lots of problems with this, and it is still a problem when integrating NFC into a mobile device. Reliability is usually the biggest concern, and it doesn’t take too much for NFC communications to simply stop working. This presents a challenge to mobile manufacturers, one which isn’t as easy to overcome as the media and users think.

 

The role of NFC

NFC is great for sharing quick bits of information that we don’t mind sharing.  It works great when sharing things such as website addresses, third party pictures, even certain personal information – such as a business card. But once we start to want to share more private and personal information, information we wish to keep secure, then issues arise.  After all NFC broadcasts data using radio waves.

 

NFC and commerce

Apple is sceptical about this, and its right to be. The NFC contactless model with credit / debit cards isn’t great, and hasn’t really taken off. You also don’t have to spend too long on YouTube to watch a number of videos highlighting security issues. Data that is broadcasted essentially can be read, with this in mind and the fact that payments currently rely on credit / debit card details (un-encrypted) being read, you can see where security issues can be exploited. VISA is aware of this, and it’s even mentioned in their patent application form.

This issue of security and relying on an infrastructure not designed for mobile / digital commerce is at the heart of why I believe Apple has not embraced NFC, and is why we have seen other mobile commerce suggestions put forward by Apple. 

 

A different model

At my own company, CloudZync, we also believe that NFC is a great technology, with a role to play in the future of mobile communications; however we don’t believe its appropriate for commerce in its current format.

Sharing information with NFC is great, but again, we must be aware of security and of the potential costs and practical uses of this. I have seen many demonstrations showing users scanning NFC tags in a magazine to read the information on their mobile device. However, how much extra does an NFC tag enabled advert cost as opposed to an advert running a 2D QR code? And if we have multiple adverts near each other, aren’t they going to cause issues when trying to read the data? We must ask ourselves, “does an NFC tag in this way add anything to the user experience compared to a QR code”. The answer I would say is a big NO. This is a bigger NO when you remember how cheap QR codes are to use and the fact that they can be read by any Smartphone right now.

The issue of cost for merchants is also overlooked with NFC, and that is another reason why we haven’t seen contactless cards as yet take off, let alone mobile payments.

Unfortunately to me it seems to much emphasis has been put on NFC being combined with the current card schemes to deliver contactless and mobile payments. The model doesn’t make too much sense and feels like a bit of a “hotch potch” approach to a solution. Though I am not an Apple fan, I must say they don’t often do “hotch potch” solutions, and so it shouldn’t be of great surprise if we see Apple continuing to say no to NFC for commerce. I’m sure Apple may use NFC in their future devices, but for commerce, I’m not sure they will at all…

My own company, CloudZync will be launching its own take on mobile commerce very shortly, and there isn’t any NFC required…

My CloudZync move

Things have been changing in the technology world at rapid rate of knots in the past 3 years, and in that time, I have personally found myself getting involved in a number of emerging technologies and seeing my role within different companies change. Well those of you who perhaps are connected with me on linkedIn (http://www.linkedin.com/in/cloudzyncandrew) may have noticed that I am now working with a new company, CloudZync.

Emerging technologies, new concepts and ideas are what I love to get involved with and over the past 12 months, I have been lucky enough to be working on some exciting developments that have led to the creation of the CloudZync company.

 

CloudZync

I’m not going to spend much time going into too much detail here, only to say that CloudZync will be offering in the coming months, a cloud platform unlike any other, delivering a truly global mobile commerce platform, that yes, does incorporate a complete Digital Wallet experience on consumers smart phones and yes, you can complete true mobile payments with the app and platform.

CloudZync: Delivering a new cloud commerce platform

This line of business is somewhat different to anything else I have been involved in. No longer will I be focused on ECM, BPM, Adaptive technologies, consultancy etc. rather my sole focus will be on building and expanding a commerce platform delivering a single business and financial service to CloudZync users.

Cloud and Mobile

The move to CloudZync may not be too big a surprise if you have been following my tweets. Increasingly I have found myself drawn and interested in both Mobile and Cloud technology and looking at the potential these two combined could deliver. Looking towards the future, I can see some very exciting developments with the use of Cloud and Mobile technologies, and as ever, I find myself wanting to be more involved in these areas. For me, Cloud and Mobile are at the leading edge of technology developments and business service forward thinking.

ECM and BPM

 I haven’t forgotten my roots though, and good ECM, BPM and adaptive concepts will no doubt influence my thought processes in my new role. With that in mind, I strongly believe that the cloud and mobile will have massive roles to play in the ECM and BPM fields, especially as companies get to grips with social and mobile more in the coming years.

Keep following…

If you follow my blog because of the ECM / BPM elements, then please keep following. I will be keeping my eye still on these areas and no doubt will find myself commentating on new developments as and when they happen. Likewise if you follow me on Twitter. I won’t be talking as much about ECM / BPM, but I will be following conversations and joining in with them when I feel I have something I want to shout about…

Interesting times…

I’m really excited about CloudZync and what it can potentially achieve. I really do believe that this is the most exciting time to be working in the technology arena with new technologies, new thinking and greater competition.