The future of payments and loyalty is here now


Imagine a world in which you easily pay without having to carry your wallet. You can manage who has rights to pay within your family and manage preferences easily from your mobile or web. Imagine the surprise and delight of being recognized automatically as you are  rewarded with personal content that regularly enhances your daily experiences.

All of this is available today, but so far only exists within Walt Disney World.  I’ve just returned from a family trip and the Disney Magic+ band was an amazing aspect of the trip.  The bands are linked to your account which tracks hotel and restaurant reservations, members of your traveling party and preferences you’ve set for things like FastPass+ or access to special events.  Once you are on site, the band serves as your room key, ticket to the park and FastPass+ gates as well as payment for just about anything you might consider.  I’ll get to the one (ok two) exception(s) I found in a moment …

My family arrived on Thursday and that day I carried my wallet as I always do along with phone.  It became clear very quickly though that the wallet was simply redundant and I left it in our room for the days that followed.  Entering the park is a simple tap on the sensor touchpoint which after a few seconds glows green to confirm you are clear to go.  Band wearers with payment capability are also asked to confirm their identity via a quick finger print touch for ID.  What’s interesting about that piece is that you haven’t previously conceded your print (unless you’ve been to the park previously though I doubt that’s used).  I’m guessing it’s used as a backup for a fraud check as you’d have a biometric print on file to review.

Inside the park, you can use the band to pay for anything you need or want along the way.  Food and souvenirs can be paid for with a simple tap and confirmation via PIN.  If a photographer snaps a pic of your family they can tap the band to map the image to your account. I noticed that the images were available within about an hour which is pretty amazing (and a bit unnecessary even) given the volume of traffic and level of activity the typical party has going on.  In restaurants with table service each server and many of the hosts have iPod touch or iPads with scanners mounted on the underside of the cases in which they sit.  When it’s time to pay / be ID’d the process is quick, painless and frankly a pleasure.

One of the more interesting aspects of the bands though is how you are identified while enjoying a ride.  At the end of many of the more exciting sites there’s a picture wall which shows you enjoying things … these images are automagically synced to your account as well!  While pretty much everyone runs over to enjoy the pictures, Magic+ users are informed the images are already waiting for them which is pretty amazing since there’s no action required.  The bands are RFID which allows them to be scanned from a bit of a distance … I’m not sure what frequency they run on, but it’s enough of a distance that you have no sense the scanner is nearby.  They enhances the impact of the images auto-syncing to your account.  While I did not witness this firsthand, I believe it would also enable Disney Cast Members (park and resort staff) to seamless wish people a happy birthday, anniversary etc which today is largely managed through buttons people proudly wear.

All in the experience was pretty excellent.  I did however run into two small glitches in the matrix.  The first was in a vending machine in our hotel.  The machine accepted bills and NFC payments, but not the Magic+ band which feels like a miss given the use in 99.99% of the rest of the park.  The other was when I had the concierge adjust and change a dinner reservation and was asked for my credit card to hold things.  This one was a surprise frankly as there was a card on file for our bands and rooms and really felt unnecessary – especially since payment for the meal out be managed through the band!

Quick note on the vending machine as well … As it offered NFC, I tried MANY times to get Apple Pay to work, but it failed and eventually took the NFC function offline (literally deactivated) after a few tries.  The machine actually suggested I use a softcard (ISIS) which was the first I’ve seen in the wild … after a trip back to the room for my wallet I was finally able to buy a bottle of water – with cash.

The Disney implementation of Magic+ bands shows how proper consideration can really deliver a high value, low friction experience regularly across quite a few use cases and is something I hope others will learn from.  When you can control the end-to-end it’s certainly easy by comparison, but it did cost Disney around $1 Billion to roll-out.  The best part was it was very clear that everyone around was able to use it, not just techie types.  Additionally and perhaps even more importantly while there’s a lot of complex technology in place, the experience was not technical but rather more personal and allowed more positive human interaction.


Alipay Epass enables simplified ecomm for Chinese consumers on US sites

You have to respect Alibaba and their Alipay service. The latest enhancement called Epass is a full-service system to enable cross border commerce. Now Chinese consumers can pay for US brands using their existing Alipay accounts and everything is taken care of ensuring proper brand goods delivered in a predictable manner.

Pass users will see an EPass payment option when they check out on a retailer’s site. Chinese shoppers pay in yuan using their Alipay account and Alipay transmits the payment to merchants in 14 currencies via 180 international financial institutions. Customs duties are calculated at checkout.

Alibaba started Alipay in 2004 to facilitate payments on its websites and spun off the unit in 2011 into a company controlled by Alibaba Chief Executive Jack Ma. Because it was spun off, Alipay was not part of Alibaba’s mammoth $25-billion initial public offering of stock in September, the largest ever.

Alipay says EPass can provide retailers with payment-processing services, as well as shipping logistics and marketing services as needed. Alipay will take a cut of each transaction but did not specify how much the percentage is.

via LA Times

5 year old’s excess in-app purchasing highlights the real issue

So how did a 5 year old rack up such an expensive bill in just 10 minutes? He purchased one bundle of 333 keys, one of 90,000 darts, and another of 333 bombs that each cost 69.99 GBP ($105 USD). A number of smaller purchases added up to the final total. [phoneArena]

I’ve got three kids and we’ve discovered this problem, though thankfully to a much lesser degree. It’s easy for someone without kids to look at this and quickly say it’s bad parenting and you should watch what they are doing more closely. I agree … but the real issue is how the password system works.

When you enter your password for a download (and particularly in iOS) the gate stays open for a period of time allowing in-game purchases or even subsequent downloads through. It’s designed to make life more simple but since there are absolutely NO kid controls or functions it’s pretty easy to fall into the rabbit hole.  Just watch a kid aggressively try to clear the between level BS messaging in most “free” games ….

Samsung Develops Wallet Platform


So Samsung is finally showing some cards around mobile payments and it looks like they’ve developed a full-up wallet system rather than simply utilize an existing method.  This certainly aligns with their desire to control more of the ecosystem and looks like a strong contender assuming they are able to deliver carrier partnerships as well to enable access across their installable base.

Samsung’s Wallet looks a lot like Apple’s Passbook and that’s a good thing.  While it’s capable of incorporating NFC, the initial proximity solution will be based on scannable codes … just like Passbook.  Again this is a good thing as merchants and brands will (hopefully) only need some slight modification (if any) to enable a second set of passes.

Currently, Wallet is only available as a preview for developers, who can download the SDK and API guides for it now, and the app itself will be available in the near future. Samsung says that it has lined up partnerships with Walgreens, Belly, Major League Baseball Advanced Media, Expedia,,, and Lufthansa for the app’s launch, but it won’t be integrated any NFC payment features into Wallet, despite its new partnership with Visa’s PayWave service. When we asked why this was the case, Samsung said retailers prefer barcodes over NFC because they don’t have to install any new infrastructure to support it.  via The Verge.

Given the imminent launch announcement of the Galaxy S IV, the likely sales of millions of devices (much like the S III and Note lines) this could and should get some immediate attention.  Developers can start here.  Earlier this week, MLB (also a Samsung partner) announced support for Passbook at 13 ballparks … with the intentional similarities here from Samsung, perhaps we’ve got a real chance at a standard for how payments get presented.

Mobile Wallet format wars

First a bit of a disclosure. Through work, I have a business relationship with Google and previously MasterCard and over the past few years have spent a pretty considerable amount of time working on and thinking about payments. I’m don’t think I am biased but you can be the judge…

This week another consortium was announced to develop a mobile wallet solution. Merchants like Best Buy and Target (among quite a few others) are looking to develop a format and technology that would allow consumer payments within their stores. It’s not clear how this will work or even when it will arrive. Today it’s simply a press announcement.

Previously, we’ve seen quite a bit of press from Isis a joint effort between Verizon, AT&T and T-Mobile. While Isis has gotten some solid press, released their web site and some pseudo demo videos try also have yet to launch. Their proposed launch markets of Austin and Salt Lake City still wait …

While Google Wallet has been live for a year growth appears limited by only being directly offered through Sprint on about half a dozen phones. There’s a lot of opportunity for other carriers though the Isis partnership seems like a pretty clear obstacle until that at least makes it out of the gate.

There are other methods of paying with (tapping) your phone today but they involve the use of a sticker as a proxy for your card and in most cases do not offer any proper interface on the phone to receive back the transaction. An SMS is a start but is pretty lame by today’s standards.

Because the traction on NFC has been slow — and depending on which analyst you ask we are anywhere from 3-5 years from mass adoption — there are some rather interesting bridge solutions ready today that add technology into our traditional card mix. The two that get the most attention are Square and LevelUp. Perhaps PayPal deserves a mention here as well as they are pushing rather hard to break through the virtual barrier into traditional commerce. Though even with theor recent merchant deals it seems like a long road ahead. Both Square and PayPal offer dongles to accept card swipes but also have other methods like phone number (PayPal) or simply your name (Square). LevelUp uses the phone screen to present a QR code much like Starbucks does for it’s own system. While Starbucks an Square announced a recent deal (and investment) one won’t replace the other from what I’ve read instead you will simply have another option in store.

The payment networks and banks are also playing here with wallet tech they hope will be adopted though appears to be a very slow train.

And of course the elephant in the room is Apple. They’ve shown about 80% of a wallet in iOS 6 via Passbook. Like many people I’m hopeful that they will go all the way when the next iPhone shows itself in September. While Apple is likely to light a fire it’s unclear if they will stay proprietary or try to define the industry. It’s likely that we will see some quick arranged marriages following their announcements and the organizing committee is already forming.

The worst possible scenario and frankly the direction a lot of this seems to be heading is that the choices create a stalemate. There are already too many similar potential options and not enough differentiation both between players, but even more importantly from today’s way to pay. Unless an actual problem is solved or benefit added its like the industry is simply talking to itself.

PayPal’s Coolest Mobile Wallet Feature: The Oops Button

Good overview of the latest paypal mobile wallet (and offline features) … they have a lot to overcome to become a viable in-store solution.

The most notable feature of PayPal’s mobile wallet is payment flexibility. Users of PayPal’s mobile wallet application will be able to choose how they want to pay for purchases even after the sale. That means a purchase can be transferred to a different credit card, a debit card, a PayPal account or even a store gift card, if necessary, directly through the PayPal app. The payment could also be split between multiple cards/payment sources.

via Forbes.

Where is PayPal’s gateway to real world payments?

I just caught a post on Techcrunch that got me thinking about PayPal’s mobile strategy a bit … Apparently they’ve finally released a Symbian client following the long(er) standing clients for Blackberry, iOS and Android.

Apple and Google’s competing plans for NFC and the likelihood of competing payment services, you’ve got to wonder what PayPal has in store.  As the current leader in P2P and longer tail transactions, they don’t have a scalable solution for real world commerce.  PayPal is stuck in the matrix if you will.  Bling Nation has enabled tests with NFC tags, but that’s really a bridge to integrated NFC and if the dominant players are unlikely to allow access to the secure elements within their systems (where payment and security live).

The ISIS consortium has yet to announce a handset partner, only that Verizon, AT&T and T-Mobile will all work together with Discover and Barclay’s.   If the Google and Apple plans come forward as expected there will clearly be room for multiple payment options as both have devices on multiple carriers.  I did a quick search this morning and found a piece recently posted on Fast Company claiming instead of NFC PayPal will instead focus on QR via their RedLaser application …

EBay’s solution is the humble QR code: a cheap and common successor to the barcode of yore. Late last year the auction giant acquired RedLaser, an iPhone and Android app that lets smartphones scan QR and UPC codes on retail goods to compare prices at brick-and-mortar and online retailers.

Rob Veres, eBay’s General Manager of Redlaser, says that the company’s recent QR pilot program with Atlantic Records has already proven that QR codes can create leads and drive sales, but he believes what small businesses really want is rewards programs that work as well as major retailers’. “The big guys already have their loyalty plans, but smaller businesses don’t,” says Veres.

EBay plans to change all that by taking a loose approach to geo-targeted discounts. Instead of requiring people to physically show up and “check in” to get deals, as on Foursquare, Veres says merchants can instead stick QR coupons in advertisements around town. Once captured by a user, that QR code can instruct the user’s phone to show information about the shop or product, search for price comparisons or ratings, or even initiate a purchase over the phone’s data connection. [Fast Company]

QR is again a bridge … and while there’s been considerable adoption, device integration and ease of use has not fully reached mass adoption.  RedLaser is nearing 9 million users though so they are making some decent ground.  Until there’s mobile web purchase for retail (particularly smb) this is not going to go too far.  All of these plans lead to a wallet-like solution and you’ll want the full benefits not just a random purchase here or there.

So back to Nokia … I wonder if Nokia might end up being PayPal’s answer to the real world.  While Nokia has effectively stalled in this market they are still the world leader in market share and have suggested all future devices will include NFC.  They don’t have any public payment partners yet … Another option could be BlackBerry which has also said they will include NFC in future devices … again no payment partner here.

PayPal has evolved quickly, though they have stayed within the online realm.  Bump accommodates some limited real-world p2p, but nothing close to real commerce – at least not yet.  They’d better hurry as Visa is working back towards P2P with their own solution …