Easier Ways to Make Payments With Smartphones (nytimes.com)

See video: Molly Wood demonstrates how apps from PayPal, Starbucks and Google can help you make purchases with your phone, and explains why you can’t do it everywhere yet

AT this point, smartphones are practically permanent attachments to our hands. But that quickly changes the moment you need to pay for something at a store and you take out a credit card.

The idea of using your phone as your wallet — for storing payment methods and even swiping, scanning or tapping it to pay at the checkout register — is a long-promised future that has been surprisingly slow in coming. Multiple technologies exist for mobile payments, but there is no clear winner and a lot of chaos.

“Mobile payments, it’s been the next big thing for three or four rounds of next big thing,” said James Wester, the director of global payments research at IDC Financial Insights. “I would say we’re probably still three to maybe five years away from seeing mobile payments really common, with most of us using it.”

But recently, several new products and services have been released that could make mobile payments more convenient and worth trying. Before you dive in, though, it’s best to have a map of this complicated landscape.

CreditAndy Chen/The New York Times

Amazon introduced an experimental app this month that lets people store gift cards and loyalty cards from a variety of retailers and check some balances on Android phones and Amazon devices. You can display the gift cards as a bar code or QR code (that odd checkered square on many products now) so that it can be scanned at a register.

So far, you can’t store credit or debit card information on the app. But Amazon already has a payment platform that lets you pay individuals or check out at some online stores, so the app could be a short hop away from being a full-fledged mobile payment service.

PayPal, the online payment giant, has also released new payment options, with an updated app for iOS, Android and Windows Phone that lets you store loyalty cards (like those used at grocery stores or pharmacies) in addition to your regular PayPal sources.

Some new partnerships PayPal has reached with some stores, restaurants and services, including Uber and Jamba Juice, also provide interesting payment twists.

People using the new app can order ahead from a participating restaurant and pay with their phones. Or if you are dining out, you can pay your bill on your phone instead of waiting for the check (and waiting for a server to retrieve your credit card, swipe it and bring it back). Many of those stores and restaurants also offer coupons or discounts as an added enticement.

At Home Depot, a partnership with PayPal lets you check out by choosing PayPal instead of credit or debit at the store’s payment terminals. Then, instead of entering a debit PIN, you enter your phone number and a PIN you previously set up on the PayPal app. No wallet or phone required.

And then there are the persistent rumors that Apple will introduce a mobile payments service tied to iTunes accounts, perhaps based on the existing Passbook app. Apple recently added a feature called iTunes Pass that lets users load money into their accounts (although this must be done in person at an Apple store) to make purchases. The company also allows users to load and organize gift cards through Passbook; like Amazon, it could potentially tie Passbook to credit cards stored in iTunes to allow purchases elsewhere, too.

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But so far, the company that has had the most success at creating popular, usable mobile payments is Starbucks. The Starbucks mobile app lets you pay for items with your smartphone at the company’s coffeehouses and also accumulate rewards like free food or drinks.

Howard D. Schultz, Starbucks’ chief executive, told investors in July that mobile payments made up about 15 percent of its sales transactions in the United States and even hinted that the company would try to share its payment system with other retailers.

If all these efforts by so many companies still sound like a messy playing field, you are right, and those examples are just scratching the surface. Part of the reason so many different apps and mobile wallets exist is that the previous attempts at mobile payments — based on tap-to-pay or contactless payments — took so long to get moving.

But now, there’s interesting movement in those technologies, too. The trouble is, many standards have not yet been worked out.

Contactless payments work using a technology called N.F.C., which stands for near-field communication. It’s kind of like short-range radio. When you pay for something at one of these contactless terminals, you tap or wave your phone in front of it, enter a PIN, and you’re done.

Your phone must have an N.F.C. chip in it for this to work. Most new Android phones and some Nokia Lumia Windows Phones have N.F.C., but iPhones do not.

Contactless payments have had a checkered history. At the moment, the two major mobile payment systems that use N.F.C. are Google Wallet and the Isis mobile wallet app, which was a joint creation of AT&T, Verizon and T-Mobile. (Isis mobile wallet is in the process of changing its name to avoid confusion with the violent militant group wreaking havoc in Iraq and Syria.)

In the past, N.F.C. payments required actual hardware: a so-called secure element within a SIM card, the card that identifies you as a carrier subscriber when you insert it into your phone. When you install the Isis mobile app, you can order the enhanced card free or pick it up from your carrier. Newer phones will have this type of card by default, Isis said. But most existing phones do not.

Worrying about a new card is a hassle. Worse, the card also puts the carriers in charge of the mobile payments world, and the companies have tried to keep out competitors. The carriers often blocked Google Wallet from being downloaded onto devices on their networks, though that practice has mostly stopped. (I was able to download the app on a Samsung Galaxy S5 and LG G3.) An Isis spokesman wouldn’t say whether blocking of the app might continue.

But other companies aren’t going to sit on their hands and accept Isis. Already, new technology built into the latest version of Android, technology that already existed in BlackBerry phones, makes the extra security unnecessary. The technology, called host card emulation, or H.C.E., lets apps like Google Wallet retrieve stored credit card information from the cloud.

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Visa and MasterCard have approved use of their cards with H.C.E. — basically, the Google Wallet app has permission to act just like a credit card. And potentially, many apps will soon be able to let you make contactless payments, not just Isis or Google Wallet.

One other note, of course, is that contactless payments cannot happen without payment terminals in stores that can read the signals. Not every merchant has those terminals or wants to upgrade.

But those upgrades look like they will be coming. Most American credit card companies are migrating from cards that use a magnetic stripe to those that use a microchip to store information. Those microchips work with contactless payment terminals, so the credit card migration could also help out N.F.C.-based mobile payment methods.

It is unclear exactly how the iPhone will fit into this, because it can’t make contactless payments using N.F.C. Now, if you want to use Isis mobile wallet with your iPhone, you’ll have to buy a special case that includes the N.F.C. antenna. There are few options, and they cost about $70. And it’s unclear whether they will work with an N.F.C. payment app like Google Wallet.

See? There is still a lot yet to be solved before mobile payments are as popular as credit cards.

But the new options popping up are exciting, and once you get the hang of them, they can actually make paying a little easier. I, for one, am hooked on my Starbucks app. But it’s easy to forget that many people still are not comfortable shopping online and are far from storing credit card numbers on a phone app and paying that way.

Tinder's 'Generation Swipe' offers a lesson in brutal simplicity for brands (marketingmagazine.co.uk)

Communication is as fast as it is casual for this generation of consumers, writes Nicola Kemp.

Tinder is having a moment. Wedged in the back of a sweaty lift at a London advertising agency last week, I was the unfortunate eavesdropper on two male executives discussing the relative merits of a client. "I’d swipe right for her" was the consensus.

The ubiquitous dating app has entered the vernacular, and technology has presented the uninspired with yet another platform for sexual objectification. A platform that is being embraced to the tune of 800m swipes a day.

At the heart of Tinder’s success is the brutal simplicity of its functionality. Images of users appear; swipe right if you are interested and left if you are not. If you swipe right for a user who has also swiped right for you, your phone lights up and declares your match.

Compulsive behaviour

This is an app fiercely in tune not just with the functionality, but also the compulsive behaviours of its users. Tinder demands only fleeting attention; consumers can absentmindedly swipe to their heart’s content, stroking both their phones and their egos with a solitary thumb. It’s a self-fulfilling model: the more users you like, the more chances of a match you get.

In an era where potentially life-changing decisions are signalled by the sweep of a thumb, marketers must recalibrate their thinking.

Sean Rad, founder and chief executive of Tinder, has said that the app is "really an analogue for what we do in the real world". But in fact, it is the polar opposite. Users are protected from the sting of rejection; the ability to control interactions is worlds apart from the glorious mess of real life.

In many ways Tinder has more in common with Paro, the robot seal created by Takanori Shibata, which is currently being tested in the UK by the NHS. Paro, who was launched in 2004, has been marketed as a companion for dementia sufferers, the elderly and those suffering from post-traumatic stress disorder. Just as psychologists have argued that Paro offers the illusion of companionship, in many ways Tinder offers many of its users only the promise of intimacy.

However, crucially, this promise is enough, as it is all many consumers have time for.

Over on WhatsApp, more than 18bn messages are sent and 36bn received each day (the difference being accounted for by the Group Chat feature). That is equivalent to more than 50bn text messages per day; on a single network. The numbers are staggering, but the key fact is that the average teen now seems to spend almost every waking moment using their smartphone.

Sweep of a thumb

In an era where potentially life-changing decisions are signalled by the sweep of a thumb, marketers must recalibrate their thinking. For "Generation Swipe", attention is always fleeting.

Of course, like most nascent technologies by the time they have reached the lifts of London advertising agencies, the chances are that Tinder has already reached its peak. But while platforms may come and go, the consumer behaviour that underpins them remains.

Communication is as fast as it is casual for this generation. The danger is that, while your agency has been busy crafting a beautiful six-and-a-half minute ad (sorry, "brand film") starring a Hollywood A-lister, your consumer has already swiped left.

Hot to app (ragtrader.com.au)

K&L Gates senior associates’ Shehana Wijesena and Amanda Hutchings explore the legal issues around developing and commercialising an app.

The ever expanding functionality of mobile apps has made shopping through mobile devices an all day, every day reality.

From Donna Karan to Chanel to Louis Vuitton, entrepreneurial fashion labels are embracing this technology to engage new and existing customers through digital means, enabling them to boost the marketing, brand awareness and sales of their garments.

While neither brands or users want to be bogged down in legal jargon when developing and commercialising an app to promote and sell garments, there are some key legal issues to keep in mind to ensure you avoid any pitfalls.

Your terms of use

Your terms of use or “End User Licence Agreement” form the agreement between you and the users of your app. This is the way in which you can govern how the app may be used and seek to limit your liability (to the extent permitted by law).

Terms of use should be tailored depending on the operation of your app and the jurisdictions in which it operates.

Ownership of copyright in the app

If the software code for the app was written by an employee of your organisation during the course of their employment, it is likely that you will own the copyright in this code.

However, if the code was written by a contractor, the copyright in the code will be owned by them until they have assigned it to you in writing. This is the case even if you have paid for the work to be done.

If you need to own the code in the app (which is recommended), it is crucial that you enter into a written agreement with the contractor assigning you all copyright in the code for the app. Otherwise you will have little recourse if the contractor uses the code for other clients.

Software development agreement

If you use a contractor to assist you to develop the app, as well as addressing copyright ownership and what uses of the software code are permitted, your software development agreement should also detail how the app will be developed.

Things to consider during the development phase include the specifications for the app, details of the material that you will provide the contractor to develop the app, and timeframes for delivery of the app.

If the contractor uses open source code, third party content or application programming interfaces (API) to develop the app, you would also want warranties (and corresponding indemnities) from the contractor that they have abided by all laws and licence conditions when using and incorporating this code, content and API within the app.

Open source code

Although open source code is made publicly available, you must still adhere to the terms of the licence agreement governing use of the code.

Non-compliance with these licence terms could expose you to liability for copyright infringement.

If you are considering incorporating any open source code in your app, you should ensure that you can comply with such licence terms.

API terms of use

If you are using a third party API in order to imbed certain functionality into your app (eg Facebook), you must do so in accordance with the third party developer terms. Third party API terms may contain excluded uses in relation to, amongst other things, the way data is presented on the app.

Trade marks

Whether you use your label name or a unique name to brand your app, you should obtain trade mark registrations for your app’s name in the countries in which it will be made available.

This will protect you against competitors who wish to capitalise on the goodwill and reputation associated with your app and your brand.

If you decide to give your app a name which is different to your label name, it is advisable to conduct trade mark availability searches before settling on a name to prevent exposure to claims of trade mark infringement.

Third party content

You should make sure that you have obtained the appropriate licences to incorporate third party content such as images, text, videos and music in your app.

If you don’t have permission to use such content, you may be exposing yourself to liability for copyright infringement.

Privacy

When someone uses your app, it is likely that they will provide you with personal information, such as their name and email address.

Privacy laws in various jurisdictions may require that you collect, use, store and disclose this personal information in a prescribed manner, and that you specify the manner in which you plan to collect, use, store and disclose this personal information in a clear and up-to-date privacy policy.

A breach of privacy legislation can have significant legal and reputational backlash.

App store terms and conditions

Once your app has been accepted for use on a mobile device, it will be subject to the terms and conditions of the app store through which you will distribute your app (eg Apple’s ‘iOS Developer Program Licence Agreement’).

These terms and conditions relate to the function and marketing of the app and are in place to ensure that apps are reliable, perform as expected and are free of offensive material.

These terms and conditions should be reviewed early in the development phase of your app, as they may contain conditions which affect the design of your app.

If you agree to the terms and conditions of the app store, and your app does not comply with these terms and conditions, your app may be withdrawn from the app store, making the time and expenditure invested in developing your app fruitless.

Above all, an app needs to best service your customers’ needs without threatening the integrity and identity of your brand.

Protecting yourself in the ways outlined above, through the development and launch stages of your app, will ensure you minimise your exposure to risks and maximise the potential return on your investment

Bitcoin could be considered legal tender in Australia (paymentscardsandmobile.com)

Australia’s tax commissioner has indicated that the bitcoin digital currency could be considered legal tender in the country. Several countries around the world are struggling over whether to classify bitcoin as a currency or as a commodity.

bitcoin could be considered legal tender in Australia

Speaking at an event last week, the Australian tax commissioner, Chris Jordan, stated there was a push by some proponents to have bitcoin treated like money, but he added it did not meet the current definition of legal tender. However, he suggested that this could be changed in the future.

“There’s a definition in the Tax Act of money. It’s got to be the legal tender of a country. We can’t say it’s money. If this grows more and more maybe the definition needs to change,” he said.

A change to the definition of legal tender would require amendments to the Tax Act by Australia’s federal parliament. The tax office issued guidance earlier in August that said bitcoin was considered an “intangible asset” under the Australian taxation system

3 Most Common Mobile Marketing Mistakes (tech.co)

Mobile marketing is a serious business. Creating a mobile app is not enough nowadays; you also need to promote your app the right way. Below, I’ll discuss mobile marketing mistakes and tips to avoid them.

1. Disregarding the mobile experience during design

Mobile UX is an altogether different experience that many designers fail to understand, as they make a futile bid to shrink all the functionality of the desktop version into a small mobile screen. Mobile users will see right through such attempts and be put off.

A mobile app is an entirely different experience, and it should be treated differently considering the new opportunities it provides. One of the primary things to keep in mind during mobile app design is that the small screen of a mobile allows you to focus on what is truly important.

How to avoid this mistake: Focus your users’ attention on the few things that truly matter. When it comes to mobile app design, one of the best ways to do this is to trim down the functionality you had created for the desktop version to a few core tasks.

Surprisingly, studies have shown that users hardly notice the differences in a mobile-optimized design. In fact, with large buttons, visual appeal, and emphasis on just the core features on the main page, an app is truly fit for mobile.

2. Building an app without a proper marketing strategy

Building an app and submitting it in the app store isn’t enough. You cannot assume based on the number of downloads in the app store that your app will also get huge downloads just by being available there. This calls for a proactive and cutting-edge mobile app marketing strategy that will help you properly market and promote a new mobile app.

Check out this screenshot from the RE/MAX website. The footer has a dedicated space for sharing information about the availability of a RE/MAX app for iOS and Android.

In case your business already has a mobile app, it’ll be a wasted opportunity if you do not mention it on your landing page. Target customers visiting your website to let them know about the availability of an optimized mobile app.

How to avoid this mistake: With the world going mobile, most mobile customers would notice an app on your website’s landing page and download it for convenience and easy accessibility. Choose communication media like your website, email, and social media (Facebook, Twitter, and YouTube) to repeatedly share information about your app. Once you get your customers to download the app, make sure the happy ones leave reviews to influence potential customers. (Well, unhappy ones always do!)

Encourage customers to give reviews for your products/services; you may even consider in-app prompts that remind customers to leave reviews after completing a significant action like using a coupon, making a purchase, or realizing an achievement (like game levels).

3. Building a mobile website and calling it an app

With stiff competition and high expectations from customers, it is important that developers stay away from making a launcher for a mobile website and portraying it as an app. It’s foolish on their part to think that customers don’t know the difference.

Do not underestimate the knowledge of your users, because you’ll very soon find them rejecting your attempt at a camouflaged mobile website in the form of an app. They will surely abandon your offering and move on to an alternate native mobile application. In short, your customers aren’t concerned with the complexity of your development process; they’re purely focused on their own experience.

How to avoid this mistake: Mobile app developers are often focused on building a native app for multiple platforms, which can be overwhelming. Instead of engaging in too many platforms, I recommend that you focus and support one platform. You can actually use this as a learning experience to understand your target market and build a native mobile application that resonates with your customer base.

Apple’s digital wallet patent references ‘virtualised currencies’ (paymentscardsandmobile.com)

With tech giant Apple positioning itself to enter the mobile payment space, interest has been piqued by a recent digital wallet patent application that has just been made public.

Apple has patented a digital wallet proposition

The patent application reveals the back-end architecture for a versatile mobile ‘omni-wallet’, which also references ‘virtualised currencies’. The back-end patent application outlines a digital wallet system that can handle digital debit and credit cards, along with coupons issued by merchants and other organisations. However, this does not necessarily mean Apple will enable digital currency functionality.

Apple’s iOS ecosystem is a closed model, compared to Google’s Android platform which uses an open approach. For some time, Apple refused to allow any digital currency apps in its App store. However, a revision of its App store review guidelines, conducted in June, now paves the way for iOS-enabled digital currency apps.

The ‘virtualised currency’ reference is open to interpretation, but could cover a wide range of concepts, ranging from store credit to various loyalty schemes offered by merchants, or even Apple itself. Apple could also opt to introduce a digital currency of its own, similar to Amazon Coins. The US Patent and Trademark Organisation (USPTO) published an Apple patent application for ‘iMoney’ in 2013.

Facebook Partners With PayPal, Stripe, Braintree To Autofill Billing Info In Mobile Commerce Apps (techcrunch.com)

Facebook wants to put an end to typing billing details on the small screen, help developers and payment processors earn more money, and prove that its app install ads make money for e-commerce companies. So today it’s rolling out last month’s test of “Autofill With Facebook” in partnership with PayPal, Stripe, and Braintree to two e-commerce apps, JackThreads and Mosaic, with more to come.

It’s important to understand this feature is a partnership with payment providers and is additive, not necessarily competitive, at least for now. One day Facebook could try to conquer more of the payments flow by processing payments itself. But currently, if a developer uses Braintree, Autofill With Facebook layers on top of it, and Braintree still earns its processing fee. These three partners could become two shortly, as we’ve reported that PayPal may be close to buying Braintree.

The “early test” feature as Facebook calls it will appear in the Mosaic (photo book-buying) and JackThreads (hip clothing) iOS apps for some users starting today, and for those who have payment info stored on Facebook by the end the week. You can add your payment info to Facebook by hand here.

Previously this test was only available in early beta to a small percentage of JackThreads users. Developers can sign up for access later, but won’t be able to use the feature until they get approval.

Update: Facebook tells me that while PayPal has committed to joining the test and supporting Autofill With Facebook, it hasn’t actually built out its integration yet. JackThreads and Mosaic both run on Braintree, and Stripe has built its integration for some apps that will launch the feature soon.

Using “Autofill With Facebook”

Here’s how the feature works for users. E-commerce app shoppers browse items and add them to their carts like they normally do. Then something different happens if they’ve previously stored billing info with Facebook when they bought a Facebook Gift, Credits or in-game purchase on desktop.

When these people go to checkout and are asked to fill in their billing info, such as credit-card number, billing address, and shipping address, a “Check Out Faster With Facebook” message and blue “Autofill Your Info” button slides down from the top of the screen. When tapped, users are shuttled into their Facebook for iOS app where they can look over their payment details and select a shipping address.

They click “OK” and on the backend, Facebook and the app developer’s payment processor do a “handshake” so the credit card and other info is securely transferred. On the front end, the user only sees the last four digits of their credit card number for security. The user is then whisked back to the commerce app where they see their payment info pre-populated in the fields. They can then confirm their purchase without ever having had to type anything.

Some people are sure to think Facebook passing your credit card info around is creepy, but in fact the social network has a relatively solid track record for data security. It’s had a few hiccupsand bugs, but no wide-scale hacks of user passwords like Twitter and LinkedIn have. If you’re concerned with Facebook taking over the world, though, this test could certainly be a pre-cursor to it knowing more about what you buy. Then again, if you own Facebook stock, maybe that’s a good thing.

Facebook’s Big Dreams For Commerce

For users, this makes converting on mobile much quicker and simpler. That means they’re more likely to go through with a purchase before they get distracted or second-guess themselves. E-commerce app developers earn more money thanks to more conversions.

As for payment processors, they get to handle more payment volume and earn more fees.

For Facebook, this is part of “Build – Grow – Monetize” platform strategy. When you make an auto-filled purchase, Facebook knows who you are, how much you spent, and in what app. That’s critical to it proving the return on investment of its app install ads. If JackThreads hits you with a $1 Facebook ad to download its app, and Facebook sees that you clicked and five minutes later spent $25 at JackThreads, it can convince the e-commerce app developer it’s a good use of spend and they should buy more campaigns.

When I asked Facebook payments product manager Deb Liu about working together with PayPal and other payment processors, she explained “We’re all trying to solve the same problem: helping devs monetize and convert. The more conversions, the more payment volume that goes through Braintree, Stripe, or PayPal [and they make their fee that way].”

And Liu said Facebook is now looking to identify and fix other issues with e-commerce: “Mobile is where the conversion gap is, where our customers are going in the future. It’s really important to make this an amazing mobile product. That said, we don’t rule out ever doing this on desktop some day.”

Postscript:

Perhaps Facebook is looking to work as an identity and data layer on top of other payment processors forever. Alternatively…