Author Archives: Sy

About Sy

Innovation Lead in the Payments Processing Market. Looking for fun in all the right places :)

How to Fix NFC and Help it Go Mainstream…

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Near Field Communications (NFC), promised to turn your phone into the digital key to your identity, transport and money.

The problem? This promise has been around since the late 90s, and shows no sign of crossing the chasm

How Does NFC Work?

The idea is you present your NFC device, to the NFC reader… and almost instantly the transaction is complete.  This will be very familiar to those of you who use the Oyster card on the Tube.

The User Experience Problem

Have you tried paying with a contactless card?  You’re never quite sure when to present the card to the reader, and often it can take a couple of seconds for the reader to recognise the card.  This creates a sloppy experience, and one that means only those with unlocked Nexus devices are using NFC today.

Google solved this in peer to peer using the “tag dispatch” system.  Sadly, the likes of Igenico, Verifone and Streamline who build the payments terminals most retailers use do not react nearly as well as an Android device does.  Herein lies the problem.

How *should* NFC work?

  1. NFC must be as easy to use as a touch screen.  This means overcoming any lag (like the contactless card example above).  This requires the same kind of user experience as touch screens now have.  If you remember those awful touch screens from 10 years ago? Or the one at your local supermarket… vs your phone.  NFC has to make that kind of leap in user experience.
  2. NFC software needs to be context sensitive.   When recognising another NFC device, both devices need to know how to play with each other and what the rules of the game are.  For a specialist NFC App working with an NFC terminal, this isn’t a huge problem… but if you just want to put your phone near the ticket machine at the train station… this becomes a problem.
  3. NFC must become more open.  NFC being a standard that has been driven by the GSMA is needless to say, very Mobile Operator driven.  The whole ecosystem is designed to be managed and leased by the provider of the NFC chip, who in turn re-sells that access.  This is a huge financial hurdle to adoption.  Why should OEM’s and big business adopt NFC, if the MNO gets to be the gatekeeper and charge for the privilege?

Crossing The Chasm

To solve these challenges, old school hardware manufacturers will need to embrace a Google like approach to NFC.  Speed and user experience is everything.  Contextual sharing (media, contacts, documents) has largely been solved, and I expect Apple to follow where Google has led.

Adopting This Approach Would Benefit

  • Security (door locks, car locks, building access)
  • Transport (rail, airlines – similar to how barcodes work today)
  • Ticketing (events, sports)
  • Form of Identify (Passport app, Driving Licence app)
  • Logistics (RFID style self aware packaging)

I’m sure you can think of plenty more, but the above are some of the more common examples.  My speculation is that this is why Apple has focussed on Passbook initially.  Apple owns a portion of the user experience.  The older organisations that own logistics and specialist ticketing equipment may take a little longer to catch up…

Your Thoughts Here:

Do you think NFC has what it takes to go mainstream?  Will another contender like Bluetooth 4 become standard because it’s not driven by the GSMA?  How can older manufacturing led businesses improve their NFC performance?

If Data is the New Oil, Here is everything you need to know about mining…

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This whole “Big data” thing is touted as the new black, the new oil, the new Bradley Wiggins…

The Big Knowledge Gap

Big Data promises new insights, new value and is linked to this social media thing…  But how do you use it exactly?

You see, Big Data has two key selling points.

  1. It’s cheap. You can run it on a laptop if you wanted to, it doesn’t require expensive hardware, and some companies give it away for free.
  2. It’s fast.  Built for Grid Computing, Big Data is the back bone of the social networks and search engines.

How I’d Use Big Data 

For the purpose of this blog, I’m going to look at the value “Predictive Analytics” can bring to the payments industry, since it’s something I’ve looked into a little.

The best description I’ve heard of Predictive Analytics is…

Before my data told me what was in my rear view mirror. Predictive Analytics lets me see out of the windsheild to what is coming down the road.

You could actually use any old data warehouse for predictive modelling, but the “Big Data” tools sure help when you need to be able to ask questions rapidly  or when waiting 24 hours for the answer is not an option.

Now Let’s Imagine You’re a Retailer…

As a retailer I’d like someone to be able to answer some key questions for without having to invest in an expensive loyalty card scheme (e.g Clubcard).

My retailer loyalty card scheme only tells the me who my customer is when they spend in my stores, or with my business partners.

It would be way more valueable if I knew everything about know who my customer is, and what makes them tick.

Then I might understand…

  • Is this customer contemplating a big ticket purchase?
  • Is this customer likely spending with my competitors?
  • How can I move a purchase they are thinking about to my store?
  • Would the customer spend if I advertised to them now?
  • Is my customer able to influence other customers to buy? What marketing does this require?
  • What else will this customer buy?
  • How can I make this customer a repeat customer?
The Privacy Promise

Personally Identifiable Information (PII) and Payment Card Industry Data (PCI) are both heavily regulated… this means any data would need to be packaged in a way that wouldn’t identify one individual or infringe any of their rights.  This is usually done by identifying demographics and postcodes, rather than names and addresses.

Setting up Your First Mine…
To do it well companies need to GRASP data science in the way innovative companies use big data.  Click here for a great article on how one small company uses data science.
Focus
Big Data is a tool that helps you find the unknown unknowns…  By the time most companies understand Big Data, the big opportunities will have gone already!

Focus

  • Start Extracting Value from Big Data Today:  Ultimately the people who know how to help your business grow are internal.  Set-up a session with your analytics team.
  • Identify the KPIs you wish to affect, and the questions you want to answer.  Your Analytics team will already have some great ideas.  Work with them, and help them understand what you need as a decision maker from them.
  • Test / Pilot questions.  Using the example questions in the Retailer examples, what don’t you know, that you would like to know about your business?  Measure success, and shout about it when it comes.
  • Move To Business Case.  Once the concept is proven, and the types of insights are seen the need for this capability will become apparent.  Whilst putting numbers to the ability to answer questions, where you often don’t know the question yet is tough.  I’m sure an investment case can be made for this, if your proof of concept is strong enough.
.What are your thoughts? Have you seen any companies use Big Data well? Have you seen a good business case for Big Data?  Am I a raving lunatic?  Comment, interact, reply!
Focus
Focus

Would you buy stuff on Facebook?

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A subset of marketers now have it between their teeth that the next big thing is buying things using Facebook.  This article at econsultancy gives the example of ASOS being the first to launch a fully fledged store front on their Facebook Page.  Is this the future of commerce? – I think not, and it shows a misunderstanding of Facebook’s strategy.

When marketers look at Facebook they see

  • A big online marketing portal where customer interact with your brand
  • A proxy web page where you can interact with a customer without having to put them through a long winded sign up process
  • Flavour of the week.

To be fair to the marketers, Facebook is all those things, but if Social Commerce isn’t making ASOS any money then how should Facebook and Commerce go together?  To answer that, we need to look at how Facebook see themselves.

What do Facebook see themselves as?

Facebook see themselves as internet infrastructure.  The would like to own identity, meaning that you won’t have to sign up for another service again if you have a Facebook account.  To Facebook it makes perfect sense that anyone starting a business today, would simply allow you to log in using your existing Facebook identity.

This gives Facebook a lot of data.

Facebook use their data to define the relationship between entities.  So for example

  • Person likes Brand
  • Person listens to song
  • Person attends event
  • Person watches movie

Using verbs is the big thing I took from the #f8 conference.  Going beyond like to “listened to”, “watched”, “attended”.  As a brand, this is the next logical evolution of using Facebook.  Not only can you engage your customers, you can see which customer interacted with which marketing activity or product.  This is what Facebook call the “Open Graph”.  It’s a word you’re going to hear a lot more of in the coming decade.

Where does this leave Facebook Commerce?

What’s missing from the list of entity relationships earlier?

  • Person buys thing.

“Person bought ASOS Black Shoes” is something I can see other people clicking like and commenting on.  It happens today, it’s just not automated.  Yet your developers can build that, right now.  If you already have that data in your database, it needs to be in the open graph.

This changes Edgerank significantly, because there are a ton of activities that customers were unsure about clicking “like” or “share” with.  This new lower friction brand interaction is where the money is.

What’s next for Facebook and Retail?

Brands get lost in the Facebook page and think of it as a landing page.  Contrast this with the new Nike running mobile app which updates a customer’s timeline with each run.

Applying that to online, or bricks and motar commerce; I’d consider

  • What actions (verbs) to your customers do with your brand?
  • Which of those brand interactions can you capture via the open graph?
  • Which product interactions can you capture?
  • How can you use mobile and facebook to add value?
  • How can you use location and facebook to add value?

Imagination is the key.  What are your thoughts for how to move someone from “viewed” to “bought”?

Mobile Payments – Will they change your day?

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You know that big search giant? Google, that’s the one. Their Mobile phone operating system Android is doing pretty well.  I happen to think their next big thing is payments.  Want to know why?  Read on…

Since Google announced their Google Wallet, mobile payments went mainstream.  You as a customer probably think, why do I need my credit card on my phone, I’ve got a card in my pocket right?

I have a lot of sympathy with that view.  If you want to pay your credit and debit cards work pretty well.  You know where you stand with a bit of plastic. Check out the video above for a quick demonstration of what Google propose replaces your plastic

Why put payments on your phone?

Because it’s just downright handy that’s why.  It fits into your pocket better than a wallet stuffed with everything and you’re more likely to have your phone with you, even when you don’t have your wallet.  You already prefer your phone to your wallet, payments are just catching up with you.

That’s nice, but why do banks care?

Whenever banks care about something, it raises an eyebrow.  They’re not known as an altruistic bunch.  The banks care about keeping you as a customer.  You are valuable to them in that sense.  With Mobile Network Operators, Visa and now Technology companies launching a wallet, the threat of losing you looms over the horizon.

Banks may not make much money from being involved in wallets, in some cases they actually lose a little money because the fee’s they make are a bit less on contactless or mobile payment transactions

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The business case for banks

The problem is until it makes money, banks won’t run towards mobile payments.  As much pressure as they’re under to improve customer service now that tax payers are a major investor the pressure to survive and not go under is greater.  So banks have to figure out how to make money out of Mobile Payments.  The Math goes a little something like this.

Cost Reduction

  • Customers who have more than one card – reduced – less plastic cost
  • Cards never need replacing – less plastic cost (as adoption grows)
  • Drive customers to self serve on mobile – less branch / contact centre cost

Opportunities

  • Coupons / deals using mobile device – unknown benefit
  • Context sensitive advertisements (buy it now) – unknown benefit
  • Value added services such as Personal Finance Management

It’s clear adoption is going to be crucial to getting any benefit from Mobile Payments.  Without regulation or a mandate from Visa / Mastercard this could get messy.  The opportunities require banks to provide you with offers for things you are likely to buy and use their card to buy with.  Look for offers in your mobile wallet to become common place towards the end of the decade.

The long road to adoption

When it comes to adoption, the Merchants are crucial. From Tesco and Walmart right down to Papa Joe’s little ice cream place.  In the next 5 years, the big names where you do your weekly shop, will change the devices you use at their checkout.  When this happens, there is a good chance they will put a contactless device there.

The temptation to merge their mobile marketing and payments capability will lead to increased adoption.

What happens next

One thing is for sure; Google will seed the market at a loss, and make money from the advertising. That will be tough and near impossible for anyone to compete with, without closing them out through regulation or lawsuits.

Your data will be the price of all these free new services.  So don’t worry about new charges.

  • What are your thoughts about how Mobile will play out?
  • Will banks invest to work with Mobile Payments?
  • Who will win the Mobile Payment race?

Big Data = Big Brother??

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Big Data can make your life simpler, profit for businesses and at a lower cost than traditional business intelligence solutions.  Sound too good to be true??!  Read on…

What’s the problem with Little Data?
When you call a bank, they essentially validate who you are, against the information you gave on an application form.  The way they make sure that is you, is by validating that against a credit agency (like Experian or Call Credit) to make sure you are who you say you are, and that you can afford what you are buying.

Now as you well know, a lot can change between the day you opened a current account and today. Not least your mobile number, email address and importantly things like your lifestyle and buying habits.  What you buy and wanted 10 years ago, are very different to today I imagine!

What is Big Data?
Many modern businesses are made up of products that have been bolted on over the years.  These systems rarely talk to each other, and if they do, it’s even less likely the business is linking the data to be valuable for them, and valuable for you.

Big Data describes the patterns that emerge from analyzing trends across systems inside and outside the company.

Companies like Cloudera & Datameer specialize in very quickly doing what business management have dreamed about for at least a decade, without the expense of a data warehouse, and in real time.  They have the tools to connect to all of your data sources, then provide very visual, actionable analysis.

Where does Big Data come from?
As you go about your life, you leave behind data, like a trail of crumbs.  Every time you correspond with a company, government department or make a purchase – all of that data is logged.  What’s more that has been standard procedure for many years.

On it’s own in a dark corner data about what you bought for lunch isn’t very valuable.  When that data is linked to data in other dark corners it becomes tremendously valuable.

What can you do with Big Data?

  • Predict when you might be coming into financial trouble (because your MOT and car insurance is due) – and offer you a temporary credit limit increase (That’s helpful banking!!)
  • Send you offers or deals from Burger King if you eat and McDonalds a lot – saving you money, and making money for the bank by selling that data.  (That data might also be of interest to a health insurance company!!)
  • Check your driving record against the DVLA, instead of relying on you to inform them of speeding offenses etc.
  • Offer an appointment with your bank branch manager when you are looking for a new house and asking friends for advice on social networks.

I’m sure you get the idea, and there are plenty more too.  The Big Data revolution has the potential to make your life a whole lot simpler, whilst giving struggling companies another way to make money if sales are down.

What about my privacy?
Always the big worry.  The key will be to make all of these services opt in.  Under the Data Protection Act and Freedom of Information Act, no entity can store information without your express permission.

As I find myself saying often lately… your data is the cost of free

Will you take advantage of Big Data?
Companies are heading this way, very slowly.  Centralized contact data bases, improved cross business data sharing, and developments like data.gov show even the UK Government endorses a Big Data future.  Big Data doesn’t have to mean big brother, and doesn’t have to be feared.  For most of us it will mean less painful interaction with companies that have the data they need to actually be helpful.  Some further reading on how Big Data is different from Business Analytics

What do you think of Big Data?

  1. Will it be profitable for business?
  2. Will it struggle against privacy laws?
  3. Do you trust it?

Hey Techrunch: This is What’s really happening in Payments in 2011

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So Techrunch have been spending a lot longer looking at Payments lately.  Their high level overviews suggests that they just don’t get it yet.

The article suggests the 5 or flavors of the month in Payments (Facebook, Square, Apple, Google and PayPal) respectively, all have a viable play at the wallet.  Which is fair, but misses the big picture.  They’re not playing in whitespace.  Payments already happen.

What’s really happening

Let’s skip right past the hyperbole and make a bold prediction.

2011 isn’t the year for payments at all, because nobody quite see’s all the parts of the puzzle.  Bricks and Motar retail is a $4 Trillion industry.  Online Commerce is a $400 billion industry.  Mobile, Social and Virtual Currency payments combine to about $4 Billion in 2011 (US based figures, do some googling…).

Defining the Change

The likely outcome is that these will all converge.  They can only converge by working with the infrastructure that already exists within western markets (emerging markets are a much more open play for startups).  Try as they might in the West the start up brigade cannot circumvent financial institutions or the schemes.

By the same token: Try as they might, financial institutions can’t ignore the fact that a large percentage their customers are on Facebook.

What financial institutions need to do

So your customer is on Facebook, and everyone is gunning after payments, outsourcing CRM and your brand is losing value.  Whether it’s PayPal, the Mobile operators or the startups, the squeeze has started.  Your branch network and existing customer base is a great asset, but consumers are changing.

If I were a financial institution I would:

  1. Develop a strong presence on facebook
  2. Build your e-portal into the page on facebook
  3. Talk to customers via the web chat / page
  4. Help them with the e-banking portal
  5. Speak to facebook about a revenue share on virtual currency payments funded via ACH / Direct Debit

What the startups need to do

Google are interesting, they’re making a more direct play at sitting on top of Mastercard, and working with verifone to win the physical card sales, and bring those into the searchable world.  Selling advertising revenue to reduce interchange is smart.  Facebook, Square and Apple all have some way to go to reach that point, with segmentation strategies.  Amazon too have a horse in this race.

If I were a startup I would:

  1. Work with schemes (Visa / Mastercard) under a revenue share
  2. Develop an e-wallet capability
  3. Sell that to financial institutions as a whitelabel, brandable product

The dream would be if you knew a company who already works with financial institutions for technology, that was able to do all of this for you.  In my opinion there is a killing to be made, helping banks go social.  Consultancies will spring up in this gap in the next couple of years.  Although having seen a recent KPMG presentation on the subject.  2011 isn’t the year for payments.

I have my eye on 2014.

Your thoughts.

  1. Who’s going to win the start up race?
  2. Which banks are embracing social well?
  3. Does anyone in the market have a holistic view?

Why Our Society Needs Balance

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I was struck by an interesting if somewhat sideways observation from Ceasar Milan… ‘The Dog Whisperer’ when reading Scott Gould’s blog on Productivity vs Creativity

“Mother Nature always wants to be balanced. So there’s no age where they don’t want to return back to normal. I have worked with dogs that are 11 years old, 13 years old, which you witness in the show. I worked with a dog that was 13 years old that was extremely territorial to her food. And I was able to accomplish a calm, submissive state, which is allowing for you to create rules, boundaries and limitations. The mind backs away from the food. So in their world, they are always ready to balance. It’s the human who fights it.”

Finding Balance
It is in our nature to find balance, but our social conditioning has made us seek social reward, which is given for adhering to the norm. The ‘Overworked’ – work hard – play hard attitude prevails. Although there are nuances, based on social groupings, in the Western Capitalist societies this is the norm.

Social Conditioning
The nature of corporate driven consumer based capitalism, sucks value into monopolies and rewards hoarding. Capitalism needs balance. Democracy and the judicial system alone have failed to provide that balance, since political parties and judicial review is blinded by the status quo.

The very measure of success being more money = more rewarding is causing the problem.

The Hoarding of Value
The act of making money alone isn’t the problem. The systemic ability to hoard, capture, and suck that money up the wealth chain is. There has to be a reward for building, maintaining & improving. However, the current economic system needs to sell a consumable product, in order to improve next quarters revenue figures also has to socially condition you with advertising to want to buy that product.

Punishing sustainability
We don’t build sustainable products because they generate less reward in our current economic system.  That mechanism is the flaw, not the idea of capitalism all together.

Instead of rewarding quality, we reward the ability to make money.

I don’t believe for a second there was ever a master plan to get to this point, it just happened because we believed making money could only come from quality. Time has proven this naive.

Real Growth you can believe in ;)
The problem is, growth alone has been attributed to improved living standards. Growth = better life has been the economist’s, politician’s and business man’s Modus Operandi for decades, without clear evidence of that being the case. Growth = Better life FOR SOME.

The Right Kind of Rewards
Growth needs balance. Human’s are a creative species and will invent. This invention needs reward. A well timed reward reinforces good behavior. Yet our rewards system is geared towards hoarding finance. You can earn twice as much by knowing how others will do, than by doing.

Our Academic education system, has produced adults who have not been rewarded for doing regularly enough. Our social reward system (pay) is geared towards hoarding that pay towards those who can predict and engineer business reality.

How can you help?
The recent ‘Start Up Britain’ initiative is nice, but what we really need to do is re-dress this imbalance in society. I’d argue Game Theory and rewards in education have a role to play here, as well as rewards outside of money.

Your thoughts

  1. What other measurements of success can we bring?
  2. Can we bring balance to capitalism?
  3. What role does education play?
  4. Are you striving for what you need, or what you want?

A Framework for Relationship Capital

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I’m willing to bet you can name a few products that you’d never buy, but think the advertisement’s are great right?  (I’m looking at you citroen advert).  Finding great marketing that speaks to your customer’s persona & values is the end game.

That shared values relationship with your customer is everything, and keeps you in business.  The major problem with large corporates is somewhere along the line this was forgotten in the name of cost cutting.  In the never ending search for efficiency the customer lost out. (Press 4 to be put on hold for another 20 minutes…)

Word of Mouth is the Marketing you know
Thinking with your customer hat on, you know when a restaurant waiter has been exceptional.  There is a social code for it.  We tip them, and think highly of the restaurant.  We may even recommend it to friends.  This is Word of Mouth, and it’s the oldest and most well known type of marketing.  The equation used to be simple.

First Class Service = Repeat Business.

With larger organisations this still applies… but when a call centre worker has a script and a customer has a problem not on that script.  The picture breaks down.  Your employee isn’t empowered and neither is your customer.  Enter Relationship capital.

Happier employees = Happier customer
The way to deliver emotional integrity is by empowering your employee’s to make decisions.  This is something that can’t be taught in a class room & requires the right kind of hire.  Zappos call it “Delivering Happiness”.

Moving from the script to giving more power to your staff can seem like a scary idea.  It is much harder to measure quality than quantity after all.  Yet corporates are waking up to the concept.  Just look at how the banks are bending over backwards to be helpful to customers.  I wonder if this will continue to be token marketing, or involve deep, culture level changes within business?

Your thoughts

  1. How can you deliver more emotional integrity in your day job?
  2. Have we all become too corporate?
  3. Are you one of those frustrated employees not given enough autonomy?
  4. Do targets and KPIs confuse the real picture of what your customer thinks of you?

Qwiki is the Coolest Innovation Ever – Here’s Why

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The fact that you can embed this thing, and have an instantly searchable – self generating, user curated information experience is just so FREAKIN cool!  This can and will change how education works.  Imagine how this could beef up your presentations? Sales? Ability to learn on the go.  This is the kind of thing the internet was invented for!  Will you use it?