Category Archives: near field communication

Google’s slice of the credit card cake

We wrote in Bloomberg Businessweek in March that Facebook could become your future bank, or more exactly, use its lock-in as one of the top smartphone apps to get in the mobile payment processing game. Billions of dollars flow toward Visa, Mastercard, American Express and PayPal each year from the small percent of each payment they extract to help you buy things at stores or on the web, and as near field communication turns cell phones into digital wallets, all that money could go into play. Facebook has 250 million avid smartphone users and a Credits system set to transfer funds, so why not make money by expediting shopping on iPhones?

Now Google is first out of the gate, with more than a dozen Droid handsets due by Christmas with the built-in NFC payment functionality. Today, Bloomberg reports, Google will announce its first mobile-payment system available on smart phones.

How much money is at stake? PayPal makes $4 billion annually on $92 billion in online transfers (PayPal is the means of choice for about 18 percent of all e-commerce transactions). American Express, which controls about 24 percent of credit card transactions in the U.S., takes in more than $25 billion in annual revenue. Money isn’t revolutionized very often; credit cards — once called traveler’s cards — took off in the 1950s, and PayPal was able to capture the new need for secure shopping on the Internet at the turn of this century. Now with money moving to cell phones, the definition of cash has once again gone into play. There are 302 million active cell phones in the United States; think of the market if only half of them start using Google or Facebook apps to buy the morning coffee.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: Domiriel

Japan shocks and the last-second decision

We’re at SXSW Interactive in Austin this weekend exploring 1,400 panels, and everyone this year is searching for the next big technology. It ain’t here. Last year it was Foursquare and location-based services, and a few years before it was Twitter; this time, nothing new has risen (except for me-too startups flaunting cloud-based web editing, Groupon coupon knockoffs, etc.).

So a suggestion: What about a service that uses consumer location and mobile to influence buyers right at the moment of decision? If you want to see a rare example of this last untapped land of marketing influence, check out mGive, an innovative mobile service that helps consumers give money instantly with a text-this-to-that on their cell phones. Many orgs raising funds for the devastation in Japan use it (you can find a list of reputable aid groups for Japan here.) What’s fascinating is the simple dynamic steers consumers to a close based on a snap judgment, a dynamic most marketers can’t achieve.

Think of the opportunity: A man in a wine store, confused over labels, about to approach the checkout. A woman buying soccer cleats for her daughter, looking at the rack of 100 Nike and Adidas models on the wall. Today there is no way to touch those people just as they reach for their wallets. To pull off a signal consumers might respond to would require vast integration — of LBS, store inventory, customer preference data, observation of consumer modality (“the woman is approaching the Nike shoe wall…”), push notification, pre-staged marketing offers or price framing, and perhaps even near field communication that turns mobile handsets into faux credit cards. But if you did that, you could personalize an offer just as Sally Smith reaches for the sneakers. Advertising could become truly relevant, helping a buyer nearing commitment make her confusing decision. We might raise even more money for Japan.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.