PayPal scoffs at Google Wallet

 

 

 

Yesterday, American Express came out and said that it wasn’t associated with Google Wallet. Today, PayPal is slamming the service, saying, essentially, that Google Wallet is a lousy idea.

“In our opinion, this is just another validation of PayPal’s approach,” said Anuj Nayar, senior director, global communications. “We’ve had a cloud-based digital wallet for well over a decade that’s already regularly in use by over 113 million people. The debate about NFC has been raging for over a year now, but we’ve always had a different vision that isn’t tied to any single technology or method of payment.

We don’t build products based on hope or hype; we focus on providing the best consumer and merchant experience possible both today and in the future. Payments is very complex and actually running a successful global payments business is very different from announcing one.”

Google seems to be desperately trying to make something work with NFC. It’s a backwards approach - instead of trying to figure out a consumer problem and solve it, Google seems to be taking a technology (NFC) and figure out how to shove it down consumers’ throats. The new Google Wallet product is just stupid.

That doesn’t mean Google is out of it for the long term. Its ownership of the Android platform is a challenge for any player in the mobile payments space. But Google isn’t in nearly as strong a position as Apple. Apple has always been able to dictate the entire experience on its phones. In the United States, only Sprint has allowed Google Wallet’s NFC implementation onto phones it sells.

Square disrupts, PayPal shrugs

Square's frictionless payment doesn't worry PayPal, NFC gets hacked, and mobile payments head to the Olympics.

The mobile payment war rages on

David Pogue took a look this week at Square’s latest maneuver in the mobile payment race, its Pay With Square app. Pogue says it’s far more disruptive than the simple ability for anyone to accept a mobile credit card payment:

“You walk into a shop or cafe. The cashier knows that you’re on the premises because your name and thumbnail photo appear on his iPad screen. He rings up your items by tapping them on the iPad.

“And now the magic moment: To pay, you just say your name. The cashier compares your actual face with the photo on the iPad’s screen, taps O.K., and the transaction is complete. No cash, no cards, no signatures — you don’t even have to take the phone out of your pocket.”

Writing about taking the app for a spin at a coffee shop in San Francisco, Pogue describes a few hang-ups: merchants have to use an iPad as a cash register and they must enter every item they sell. Another issue concerns Square’s security and actually stems from customers themselves — users are required to upload a photo of themselves to set up a new Pay With Square account, but as the coffee shop cashier told Pogue, “sometimes use pictures of cats or SpongeBob instead of their own photos,” which prevents a visual ID of the customer.

The mobile payment competition isn’t sitting still, however. Pogue also notes that PayPal is working to catch up with Square’s frictionless purchase technology with its own local payment system, PayPal Local. And at the recent VentureBeat MobileBeat conference, PayPal’s vice president of global product Hill Ferguson said he isn’t particularly concerned with Square. John Koetsier reports at VentureBeat: “Though [Square] can facilitate very personal commerce — put it on Bob’s bill — [Ferguson] says it is not going to work very well at Safeway.” Ferguson also acknowledged that PayPal is a “two-click” system, as it doesn’t own the ecosystem “like Google Play or Apple,” but says he sees both companies as “fantastic potential partners, doing highly complementary things.”

NFC security hacked at Black Hat 2012

Andy Vuong at the Denver Post took a look at NFC technology this week, its potential uses — including but not limited to mobile payments — and the likelihood of it becoming mainstream in the U.S. Vuong writes that the biggest question concerning NFC’s future may be whether or not Apple will include the technology in its next generation iPhone.
Mohamed Awad, associate product line director for NFC products at Broadcom and a board member of the NFC Forum, told Vuong that he doesn’t think the future of the technology hinges on Apple’s adoption, and he also dismissed security concerns. Vuong reports:

“‘The credit card in your wallet is just magnetically encoded, so anybody with a magnetic reader can read all of your credit card information,’ [Awad] said. ‘On your smartphone, there is a secure element in there, the encryption is much more tight and it’s a much more secure platform.’”

The security concerns, however, may not be so easily discounted. Research consultant Charlie Miller demoed the security gaps at the Black Hat security conference in Las Vegas this week. Meghan Kelly at VentureBeat reports that Miller showed a video in which he closely followed a friend, keeping his hand “awkwardly close to his buddy’s back pocket” in order to hack his phone. Kelly says that though Miller noted the attack was difficult and that the NFC bugs he found are “not too extensive,” he was still able to exploit a bug in the Nokia N9 smartphone. She writes:

“The N9 has a feature in it called ‘pairing,’ which allows the phone to connect to other devices using Bluetooth and NFC. … If a hacker creates a tag that can pair the phone, she can have access to the Bluetooth network and eventually make it into the rest of the phone. Miller demoed the hack and pulled all the data from the phone, including the photos and address book. He also showed that you can send text messages to other phones using the hacked phone, as well as make calls.”

Kelly writes that Millers takeaway for the mobile security community is to “[m]ake phones prompt the user before accepting an NFC connection.”

Visa takes mobile payment to the Olympics

Bill Gajda, Visa’s head of mobile, brought some perspective to the state of mobile payments this week in an interview with Roger Cheng at CNET. Gajda says that though mobile payment experiments are underway, the mode of payment won’t become mainstream in the U.S. for two to three more years. Cheng reports that the issue isn’t only related to hardware and technology hang-ups, but that “Gajda’s more realistic view of the broader acceptance underscores the difficulties in changing long-drilled consumer habits and getting past the comfort level of paying with cash or swiping a credit card.”

Visa is planning to address the issue of consumer awareness at the 2012 Summer Olympic Games in London, England, which begin this week. Cheng reports:

“Visa is using the Olympics as an international showcase for mobile payments. The company has hooked up 140,000 payment terminals in London with near-field communication, or NFC, chips that enable the tap-and-pay process. The locations include 5,000 London taxis and 3,000 point-of-sale venues at the Olympics. The company is handing out several thousand Olympic-edition Galaxy S3s to VIPs such as athletes to test out the service.”

PayPal: how we’ll win in mobile commerce

 

 

It’s getting to be a tough market in mobile commerce. Google and Apple are both out with solutions that approach digital wallet status, upstart startups like Square are claiming merchant mindshare, and the original mobile payments company, PayPal, is having to forge a path from the desktop to the smartphone.

 

It’s a little ironic that PayPal originally began life as a way to beam money between Palm Pilots, way back in the mists of dot-com time: 1998. For the past decade it’s been more known as the desktop payments company for buyers and sellers.

But with the massive move to mobile due to smartphones and tablets, PayPal has been forced to refocus.

Part of the company’s response was the elevation of Hill Ferguson, formerly leading the mobile team, to vice president of global product at PayPal. It’s a clear signal that mobile is the future of the company. Another was the acquisition of mobile payments company Card.io just last week.

Source: John Koetsier

Hill Ferguson

VentureBeat spoke to Ferguson at our recent MobileBeat conference.
“The great thing about mobile products is that it forces a simplification of the agenda in everything you do,” says Ferguson. “That’s true for our company as well.”

Ferguson looks at the facts: In 1990 the country had 100 million PCs. A decade later, and we’re at a billion … but we’ve got 10 billion mobile connected devices: smartphones, tablets, feature phones, other internet-connected gadgets for communication and music and business.

That means mobile comes first, and when you do mobile first it forces you to focus on the things your customers want most from you, Ferguson says. And that helps some companies who are not known for being simple: on the mobile web, simplicity is a sheer necessity.

That brings to mind, of course, one great disadvantage for PayPal: because the company owns none of the ecosystems on which mobile happens, payment is more challenging than for others. Google Play and Apple iTunes, for example, mean that those two giants can implement single-click purchasing.

“Our version is 2-click,” says Ferguson. “We don’t actually own the ecosystem like Google Play or Apple … we have 1 step of authenticating the user and then a step on confirming the payment.”
One click or two, PayPal is doing a lot of work to take what is mostly online offline: a partnership with Starbucks, and another with Home Depot, which enable users to buy coffee or countertops with their PayPal accounts. And PayPal Here, a Square competitor, has seen strong demand so far, says Ferguson.

“The heart of small business is with us, and they’ve been waiting for this product,” he says.
One real advantage for PayPal is that its global business has given it not only 100 million active users, but also good visibility into emerging market needs, as well as mature markets. In emerging markets the phone may be a person’s only computer, while in mature markets the smartphone has become the ultimately most personal computer.

“In Latin America and south-east Asia, you’re seeing smartphones starting to penetrate,” says Ferguson. “But feature phones are still big, and PayPal is used to top up cell phone minutes. And the behaviors of each are converging rapidly.”

Ferguson isn’t particularly worried about Square: Though that company can facilitate very personal commerce — put it on Bob’s bill — he says it is not going to work very well at Safeway.
And Apple and Google? Ferguson sees them as fantastic potential partners, doing highly complementary things.

“And,” he says, “if they want to complete, they have some assets to play that game.”