Time for Payforit to come out fighting

So is this International Mobile Payments week, or what? Out of nowhere there have been a raft of launches of mobile payment services, some of them pretty disruptive IMHO, and, of course, the Payforit Summit, which took place in London on Wednesday and attracted quite a crowd.

The two biggest initiatives in the world of m-payment that we have seen this week has been the launch of Zapp, but VocaLink and Zinc by WorldPay – both products that look to up the ante in terms of making simple mobile payments easy to do, ubiquitous and perhaps even something that consumers will actually start to use.

Of course they are up against some stiff competition, but they seem to have decided that now is the time to bolt out of the gate and really start pushing mobile payments to both merchants and consumers with the idea that someone has to if any of this is going to take off.

In light of all this, the Payforit Summit was particularly interesting. Now, Payforit is quite a slick payment took now, for digital goods and, if they can get it down to really low value transactions (and improve the outpayments still further) they are certainly on to something. It could have a bright future.

But a glance around the room at the event this week showed that, while a large crowd was keen to come along and learn more, it was a crowd made up of all the people who already know about Payforit. Where were the retailers? Where were the games providers? Where were the publishers, content owners and so forth?

I am not denigrating the organisers of the event: they did a fantastic job and it was a really interesting and informative conference. But the people who really need to know about it – not least so that they can start, as trusted brands, to push it at consumers – were conspicuous by their absence.

Now if you look at the marketing oomph that, say VocaLink, has put into launching Zapp and, to a lesser extent, WorldPay into rolling out Zinc, you see that the key now to getting these great mobile payments services used in anger by consumers comes down purely to marketing.

Payforit has a niche to fill and it can do it very well. But unless everyone knows that it is there and in particular it is pushed hard at the merchants who could get consumers using it then it will languish as an also ran.

There are a growing array of payments tools out there and no one – merchants nor consumers – really knows what to do. So they do nothing. This is what is holding back m-payments. It will take an Apple or a Google to come along and stick a sexy front end over a banks payment tools to get it into the mainstream, and by then it could well be too late for many of these other products to work.

So, Payforit people, why don’t you get together and each put in a bit of bunce and get some proper marketing to merchants done around this. It is these guys that should be at your events and should have gone home late last night, fed, watered and really seriously looking at how to implement Payforit on their sites. Ding ding. Round two….

Mobile brain drain

On a recent trip to Moscow to the excellent DEMO Europe event – where tech start-ups pitch to an audience of other techheads, VCs, angels and the press – I was astounded by how advanced, creative and focused mobile and online technologists are in Russia, Russian Federation countries and Turkey. It really put into perspective how small, really, the UK and developed European markets actually are. And how excited and forward thinking these ‘new’ regions are.

But the real eye-opener for me was in talking to the US Ambassador to Russia, Michael McFaul, and entrepreneur Gentry Underwood (founder of Orchestra and developer of Mailbox, recently sold to Dropbox). Neither really told me anything about technology or the mobile market that I didn’t already know, but rather they offered a stark reminder of how politics impacts the world of mobile and online tech.

The issue is that of education and immigration. Ambassador McFaul was passionate about how, despite front line political issues between Russia and the west being a bit sticky right now (namely because of Syria and US policy on the Middle East), behind the scenes the two countries are working very closely together to share technological expertise and, for the Americans, to tap into huge wealth of knowledge and creativity in digital technology in the former Soviet Union.

The problem is that there are not enough ‘brains’ in the US – and to some extent the UK, Germany, France and Spain – to offer creative new ideas and the creation of new products that create new markets. Especially in mobile.

Both McFaul and Underwood, are concerned that massive tech brands such as Apple, Microsoft, Google and Facebook are taking all the best brains, leaving a paucity of top flight engineers, designers and technologists to help develop other, smaller and more entrepreneurial businesses.

But there is also, according to both McFaul and Underwood, another issue at play: the way that the economic downturn has created an atmosphere that is unfriendly to foreigners.

Currently, in the UK and US, the best foreign students – who can afford a western education – are being educated and developed to a very high level, but rather than being allowed to use that knowledge to better the economies of the countries they have been educated in, they are ‘encouraged’ to go home. And they take their skills with them.

The official UK policy is to attract the best and brightest from overseas to study here – but only if they can pay through the nose to do it. And the visa application process – and indeed the visas on offer themselves – are so convoluted that they are very hard to fathom. Looking at them, however, you see that student visas almost all insist that the student, on graduation, doesn’t have much leave to remain. We are actively turning these highly skilled people away.

Couple this with an enormous backlog of visa applications for students to study in the UK and what one Home Office insider describes as “utter ineptitude”, it doesn’t look good.

The education systems in the UK and US are also woefully behind the times when it comes to teaching the kind of skills needed to foster the mobile technologists of the future too.

With the big IT giants draining the top domestic brains from the workforce, and with these highly educated foreign graduates going to China, India Russia, Turkey and Brazil, the developed world is teetering on the brink of being left behind in the digital technology race.

Of course, there are many brilliant people in each country, but if you look at it purely as a numbers game, there are more of them elsewhere than there are in the UK and, increasingly, in the US. And they are increasingly getting funding for their ideas.

So what needs to be done? Better education is obviously key: we need to create more digital brains domestically. We also need investment in start-ups. But we also need to look at the value that foreigners bring to any market. And this is perhaps the hardest issue: especially given the current climate of anyone foreign being seen simply as a benefits claimant who gives nothing back.

But the other thing that my jaunt to Moscow showed me was that any old enemy can become your friend and friendship is more productive and rewarding all round than mistrust and downright hatred.

Playing the numbers game

Consumers are once again getting confused – this time with the burgeoning number of, well, numbers, with an Ofcom study showing that many people don’t understand the call rates associated with 03, 08 and 09 numbers and turning away from using them – often not making important calls – because they fear massive call charges.

This is all very reminiscent of 20 years ago when premium rate numbers ended up all over the papers because of massive bills ‘inadvertently’ racked up by ‘unsuspecting’ callers. But is this really the case?

Alright, adult and other proper premium services have always relied on high call rates for their premium products But, for a while, back in the 1990s, many businesses adopted freefone numbers for customer contact as they were getting so many calls. These days, however, a growing amount of contact with businesses is through IM, email, skype, text and even social media channels. As a result, businesses have started to use premium or local numbers again for call centres calls – to justify having call centre staff.

While I am clearly not your average telephone user, I have long used chat services and IM and email to contact businesses as it is cheaper, quicker and easier. ‘Normal’ callers however don't always trust these ways of contacting business.

As a result, Ofcom is looking to re-order numbering. Again. It is also proposing insisting on putting more warning messages in calls to tell people exactly what they are likely to be spending when they call a particular number.

But will this make any difference? Probably not. To be told that a call is going to cost £X per minute doesn’t really tell you how much the call will cost, as the one variable in the equation is time.

Similarly, the move could be damaging to an already damaged PRS business, where margins are getting tighter and call volumes are on the slide.

While the arbitrage market goes from strength to strength (for better or worse) it is predicated on leveraging more and more international traffic. Domestic calling to ordinary companies for help and advise, or for important things such as enquiries to HMRC (the tax office) – something cited by Ofcom as a particular issue – are not really fit for purpose any more. While I am all for operators make some money out of calls, sometimes you have to pick your battles. Confusing ordinary people is not the modern way.

As more and more OTT services start to arrive – especially apps that let you call PRS numbers from mobile at a landline rate – then any premium on mobile calling is starting to be eroded. Maybe, while Ofcom has its rethinking cap on, it needs to look at a radical shake up of numbering and what can be used where.

I’d be interested to hear what you think…

The people have spoken: and they want mobile PoS

As 2013 progresses apace, we edge ever nearer to mobile payments breaking through into mainstream use. A study by Timetric reveals that consumer demand is going to force retailers, mobile companies and technology providers to start implementing true mobile point of sale technologies in shops.

Meanwhile, Square – which takes payments from cards onto smartphones – has decided to start wrapping local recommendations into its payments app in a drive to start to make recommendation more relevant. The thinking behind Square’s approach is to not rely on who is checking in where, but who is buying what where and what you yourself have bought. This, it believes, will help drive more mobile sales as users start to trust the recommendations.

This move away from being location-specific recommendation and with recommendations from friends driving viral uptake of services or sales, is something that we are likely to see a lot more of over the coming months. Its not so much about what your limited number of friends recommend, but more about what people who like what you like, buy what you buy and so on that will drive the next era of mobile-social recommendations.

This in turn, believes, Square at least, will drive more mobile payments.

But as consumers get evermore used to spending money on and through the mobile devices, there is potentially a black cloud looming. The UK’s Office of Fair Trading (OFT) has launched an investigation into whether kids – though or exclusively – are being unduly pressurized into making in app and in game purchases – especially within in free games.

The OFT believes that this is on the rise and that thousands of pounds are being somewhat coerced out of innocent players and its is being assisted by the growing ease with which consumers can pay in-app.

And this is quite a conundrum. One of the key USPs for mobile payments – especially seamless and buried payment processes – is this ease of use. Sadly, it seems that that very ease of use is being taken advantage of and millions of pounds are being pulled out of peoples’ pockets unwillingly.

It should be stressed that, at this stage, the OFT is not investigating specific breaches of the Regulations. The OFT is inviting stakeholders, including games developers and hosting services, to provide information to help it understand the prevailing practices in this market. It has set an initial deadline of 28 June for submissions. This consultation itself is expected to last until October 2013, at which point the OFT will indicate its intentions going forward.

Until the OFT publishes its initial findings those involved in supplying freemium apps will need to consider whether they are doing enough to ensure parents are aware of the practical steps they can already take to protect children including .

making sure a child using a smartphone/iPad doesn’t know the password/pin needed to make purchases.

Time to love SMS again...

It comes as no surprise that SMS revenues for operators are set to be hammered by OTT messaging services such as iMessage and Whatsapp to name but two. I know I use both extensively and now find it quite shocking when I actually have to send a text. And if text is the only option, I now try and use Facebook messaging instead – especially now I can flick my friends faces across the screen while waiting for a reply.

The rise of messaging technologies that act a bit like text is unsurprising: for starters its largely free, so of course people are going to use it. But I think it also reflects once again how out of touch with consumers network operators are. SMS became a mass market consumer tool pretty much by accident: it wasn’t designed to be used by users, it was for engineers. As more people used and started to want to share more stuff such as photos – as they increasingly were with email – operators gave us MMS. And it was rubbish.

Now operators face the same problem again. While consumers got used to doing more and more with email – but couldn’t do it via mobile easily – they wanted to do it with text. And the operators blew it. Now they have people wanting to do much more with their messages: share their location, share content and data, find out who else is near them and message them and generally start to combine all the thinks they can do with social and mobile and other apps into messaging.

And the operators appear once again to have blown it. At least if the recent research by Informa for the FT is to be believed (See front page). Users are flocking in droves to these free OTT messaging services, while social media DM is also eroding SMS numbers.

And it is set to cost the operators dearly. They are already seeing SMS profits drop and the decline appears, currently, to be exponential as more smartphones hit the market and more users switch messaging services to save money and get more functions.

But the operators don’t have to just stand by and watch it happen. SMS still has one great USP: its cross network and, so long as you can get a signal, it works. Operators need to look at how to capitalise on this and turn SMS into something far richer and far reaching for all users.

While there are moves to let text users update Facebook et al using text. The operators need to look at how to develop an all encompassing messaging service, not limited to 160 characters, that allows seamless sending of photos, movies and data, that can use location information and can be of variable charges – to allow for purchasing of things – to make it relevant and leverage its cross network, work anywhere capability.

Text need not die and it would be a shame if it did, but only the operators can save it now…