Are you holding the future of the payment system? (Contd.)

PayPal Here for business

     People are adopting Mobile Payments at a fast rate. We have started using them in our mobile applications, for e-commerce and throughout the internet for making payments. We know that businesses and consumers use Mobile Payments a little differently and the companies provide slightly different services to cater those needs. Apart from the necessary features, that we saw earlier, companies have also taken couple of steps that provide them a significant edge over others. One point to be noted is most of these services are available only in US right now. Once adoption increases these companies will provide the services in other locations.

PayPal

PayPal is the kingpin in the Mobile Payments space providing solutions for both business and consumer and according to ITG it has a market share of 78%. PayPal upgraded its Consumer Mobile app and capabilities in 2013. All we need to do is download the app, sign in to the PayPal account, take a photograph and provide other security details. Once ready we will be able to see a list of stores that accept PayPal payments. We have to check in to the store, connect securely using the app, make the purchase and mention that we are making the payment through PayPal. The store will get a photo identification from our account and we will be able to make the purchase in seconds. We need not use any card, we need not type a pin, we need not even take our phone from our pocket. It will all happen automatically and we will get the invoice as well. Apart from this there are a lot of cool features in the app: We can order ahead in some stores, browse for stores that accept the payment type, switch credit cards in the PayPal account, link more cards, see all the past transactions, send money to other accounts and receive money from family and friends.

     For business, PayPal Here service provides a card reader to be used to scan any credit card and collect money. For instance, if someone opens a small retail store they can right away start using the service "PayPal Here" to accept money. PayPal, Google Wallet and Square (the top 3 in Mobile Payments) all have an exclusive app that will be used for making these payments. Now when these systems are used as Mobile Point of Sale systems few services such as the transaction fee, time taken to receive the money to our account, transfer money to another bank account, 24/7 Customer service, cost and reliability need to be considered to evaluate them. PayPal takes care of all these things and dominates the space.

The one major disadvantage is that we need a PayPal account to use it. Setting up the process, looking for stores, and getting used to the service will demand a lot of our time in the beginning and this is a major downside for PayPal. Since there is an additional step involved in setting up another player between us and our bank account many people hesitate to adapt to this. But for business this is a really good option.

Square

 

     Square launched its service around 2010 and focuses primarily on business with a market share of 18%. Like PayPal it has all the features in its mobile app. Square also helps business set up a complete point of sale system and also offers other business services like managing orders, inventories, analytics etc., Recently Square has mentioned that its payment device will accept Apple Pay.

Google Wallet

Google introduced Google Wallet in 2011 in US and from that time it has made significant improvements in its offers. The Wallet will store credit cards in the Mobile App and we will be making the transactions using Near Field Communication (NFC). All we have to do is tap the NFC enabled reader with our phone, enter the pin and our transaction is complete.

     Apart from the regular in app services that are offered, Google has more features which are excellent. Wallet lets us store loyalty cards, various redeem coupons, offers etc and use these at the time of transaction using "Single Tap" payment. Google Wallet is linked to the Google account and using this we can send and receive money from friends. Google Wallet can be used for in app purchases in NFC supported android devices. This removes the process of entering the debit or credit card details in the tiny screen, which is the primary hindrance for mobile payments adoption. Google also offers Google Wallet card which can be used as any credit or debit card. It can be used to make payments anywhere in US (where Debit Mastercard is accepted) and also collect cash from ATMs. This card provides us security against theft because if we know that our card is compromised then we can easily stop any transaction through "Lock the Card" option in the app.

     But there is one disadvantage, Google stores all our transactions. Right now the privacy policy mentions that the transaction data won't be used for any purposes but Google has the power to do it if it wants to. This is a turn off for many tech folks especially those who value privacy. Even though Google Wallet offers so many features it still has only a 4% market share and adoption is slow among Android mobile phone users.

Apply Pay

Apple Pay needs no explanation as it is new and a lot of people have already read about it. So lets focus on the key areas where it differs from other competitors.

• Apple Pay has NFC enabled in iPhone 6, 6 plus and Apple Watch. We can make payments using these devices and in the iPhone instead of a pin number we will be using the secure finger print scanner to acknowledge the transaction. This security is the best in class in the industry at this stage. 
• In the transaction process "network-level tokenisation" is used and so the details of the credit card is not shared during payment process. The bank and Apple will accept specific tokens as secure pass and will facilitate the transaction.
• The merchants don't have any information about the card details or about us.They only have the token info and the order info.
• It provides in app purchases in specific apps using the same level of security. More companies are updating their apps to integrate Apple Pay.
• Apple does not store any of the transaction details, does not capture it and does not use it for any business purposes. It will only capture the geographic location of the purchase. All of the card details resides in the phone.

     These advantages apart from regular services will help Apple bite off some market share from competitors.

      Even though all these companies offer these incredible services and offers, there are specific hurdles that prevent the adoption of Mobile payments. Some of them are the additional transaction fee involved in the process, installation of costlier NFC enabled systems by retailers, uninterrupted support for the services, introduction of middleman in the transaction process etc., Slowly as technology progress some of these hurdles will be solved and one day Mobile will replace Wallet too.

Are you holding the future of payment system?

Apple Pay used by a customer to make a payment

After the introduction of the Apple Pay in Apple's Sept 2014 event, if you had noticed a little more closely you would have seen that no one ever mentioned that Apple Pay was revolutionary or something that is entirely new. In fact it was one of those topics that was not mentioned a lot about in the newspapers and moreover the world was curious to know about the iPhone 6 (and/or 6 Plus) and the Apple Watch. The reason why it was ignored was Apple was not the first major player to get into mobile payment system. Apple can be said as the fourth major player who has entered the game but Apple has come up with some good solutions that will push the customers who are just on the verge of adopting the mobile payment technology.

Over the years, Mobiles have replaced calculators, cameras, torch, watches, compass, voice recorders, video recorders, music players, telephones, pagers etc., If you think about it, these are not just items replaced but industries, so let that sink in. Now where are we in this cycle of replacement? Some experts say that the mobile payments are the next stage where the Mobiles will replace your wallets. Now this mobile payment system can be a little confusing. As in how does it work? Who will use it? Why should we use it? What will we do with our debit/credit card? and so on. So let us understand about mobile payment systems a little and then the top companies in this space.

Mobile Payments

Mobile phones can be used either by consumers or by businesses (mostly small) to transact money. Even though all the mobile payment systems transact money, the main flow of transaction differs in both the cases and this leads other factors to be considered. Usually if business use Mobiles for transactions it would be as the Mobile Point of Sale (mPOS) system. In this case the Mobile phones help in creating a "Credit Card Terminal" at any place. This will help the retailers collect the transaction amount using Mobile Phones instead of a Credit Card reader. The Mobile phones will have some way to read the card or enter the card details and then will help in the transaction of payments. For example, a DVD retail shop can use a mPOS system instead of a Credit Card Terminal, which is costlier involving a high startup cost plus additional fees. So in these cases a mPOS system proves to be a better option. In this area Square and PayPal Here are the major players.

When consumers use their phones to make a payment it is to provide the money that they owe to the retailers or vendors. We do this every day in our life and these transactions need to seamlessly happen for all the customers. Now the companies are starting to understand the value in this and are creating different ways to make that happen. To put it in a simple way, in the beginning we were transacting using traditional currency. We paid the amount that we owe to a retailer by cash and we still do. Then we started using Credit Cards and Debit Cards to pay. Now the next stage of the evolution is to pay using your Mobiles. After all this evolution is to make us carry few things and spend more on products. Apple Pay and Google Wallet are some important players involved in this space.

A couple of factors need to be understood and taken care in the new system for the Mobile phones to truly replace our "wallets"

1) Transactions should be smooth and done easily
2) Future data must be at least as secure as current transaction data
3) Additional costs involved must be as minimum as possible
4) Needs to be more convenient than the current system
5) Provide additional benefits than current system
6) Both consumers and retailers need to adapt the system
7) Must be more theftproof

As Apple mentioned when it introduced Apple pay, "the new payment system must be easy, secure and private" and with advantages. The current Mobile Payment systems, mainly Apple, Google, Paypal and Square each has a focused on solving the above caveats and pushing for adoption. In the follow up post we will see how these companies solve these issues, their strengths and finally the hurdles in adoption of the system by both the consumer and the retailer.

What is Net Neutrality and how does it affect you?

The future of Internet

What is Net Neutrality?

 

When the Internet Service Providers (ISPs) started providing Internet services to the people they followed the same principle that they had for the telephone lines. The rule is that when you have a phone connection the ISP should not restrict you from calling a specific person. It will allow us to reach anyone, let it be a celebrity, a politician or a murderer. The ISPs didn't place restrictions on any of the calls and all the traffic were treated equally.

In the Internet space, "Net Neutrality" is the norm followed where all the "data" is treated equally. Every person who has access to Internet will be able to reach any website in exactly the same speed. One type of data is not prioritized over another type. So for example, it does not matter if you are searching something in Google or reading a review in Zomato or looking for a new property in 99acres you will be able to access all these pages in the same speed. None of the content providers (e.g, Zomato, 99acres.com, basically all the websites) can make their content load faster than others. This norm makes sure that there is a democracy in the web. 

What is happening now?

 

 Recently there is lot of trouble over maintaining Net Neutrality and to understand it a little bit of history is needed. The Federal Communications Commission (FCC) in US created the "Open Internet" rules in 2010 which prevented ISPs like Comcast, Time Warner etc., from discriminating some content providers over others. In essence this rule made sure that Net Neutrality was followed by the ISPs. However in Jan 2014 this rule was vacated by the US Court of Appeals. So in order to maintain the democracy in the Internet and ensure that a fair service is provided by the ISPs the FCC needs to create another rule.

Two sides of the story

 

ISPs are saying that the Internet in 1990 was entirely different than now and no one expected people to watch high quality contents via Internet. In the present time, Youtube, Netflix and other sites offer high quality video content which takes up a lot of bandwidth and is not used by everyone. Content providers like these contribute to most of the data being transferred, so ISPs want to be able to charge these content providers accordingly.

Proponents of Net Neutrality say that the Internet was formed on basic principles like Net Neutrality. The democracy in the Internet will be maintained only when no government, public or private enterprise have control on what people see. The freedom of speech will be severely hampered if it is not maintained. They are also against the charge, which the content providers will end up paying, as it would lead to the death of start ups and will support major organizations. The proponents,whom we are talking about, are Google, Facebook, Kickstarter, FourSquare, no of politicians, approximately 1.4 million people who have voiced their opinions in FCC and a lot more.

Apr 2014 Proposal

In Apr 2014, FCC proposed a new rule which will lead to a "tiered internet service", i.e the proposed rule will allow the ISPs to charge the specific content providers so that their content will reach the people faster. This will divide the Internet into a "fast lane" and a "slow lane" where the content providers who pay for their content will end up in fast lane and the rest will be in the slow lane.

FCC started seeking public comment for this rule and as expected this triggered a huge response from the public. Initially the reach of this proposal was only through news and other tech blogs, but it got a major push when John Oliver publicly supported for Net Neutrality in his HBO show "Last Week Tonight with John Oliver" . After this the FCC website crashed in the process of recording all the comments.

#GoSlow

 

In order to get more people to support Net Neutrality various organizations like battle for the net, save the internet etc., have taken different steps. A notable step is where a lot of websites posted a "loading" screen image in their website on Sept 10th 2014, which was promoted as "Go Slow",  "Internet Slowdown" campaign and also under other names. Netflix, Mozilla, Reddit, Kickstarter, etc., are some of the websites which participated in the campaign. The general idea is to educate people on the consequences and give them a taste of the future in case the FCC rule came into practice. This campaign gained a lot of momentum and recently FCC website witnessed the maximum number of comments in history for an issue. The comments section for this issue is closing on Sept 15th 2014.

How will this affect business?

 

At this stage all the consequences are only theories as to what would happen and some of them are reasonable and will be immediate. Proponents argue that once this rule comes into place the major content providing companies like Netflix, Youtube etc will start paying charges to make sure that their content reaches the consumers faster. This rule will affect the start ups which would struggle to pay that charge in their initial development phase and the innovation in silicon valley will definitely be affected. We must realize that most of the pages that we visit let it be Google, Facebook, Twitter, Instagram, Youtube, Amazon etc., all started as smaller companies which through their services slowly scaled into larger companies. The growth of such innovative companies will take a major hit due to this rule.
 

How will this affect us?

As consumers we might feel that this simple rule is not going to affect us. We can argue that these companies will get funding to pay for these charges in future or the companies will start coming up in different cities like Tel Aviv or London. The problem is, it does not end there. It is not just some start ups that will be affected. The consumers will soon start paying the ISPs to get access to the fast Internet lanes and those small websites that you access now will be slower. Remember the main lesson in the Internet - Fast is always better than slow. We will start using only the services in the fast lane and other services in the slow lane will take a hit. The ISPs will also gain power on what should load faster for you and will start creating different schemes or packages for this so that you can end up paying more. ISPs will have the power to reduce the traffic to websites which are against them, they will be able to favor one company over another, they can suppress the voice of a new political party. All this may not happen but they will have the power to make it happen.

Now we are thinking that this is happening in US, how is it affecting an Indian citizen? First this issue is not happening just in US. For your information, Chile is the first country to have a rule supporting Net Neutrality. Second there will be no effect in India because of this rule for now. At the moment Telecom Regulatory Authority of India (TRAI) has provided guidelines to the ISPs to make sure an "Unified Access Service" is provided. In case the existing proposal of FCC is made into a rule then other countries will soon follow suit. Before we realize Airtel, Docomo and other companies might start creating custom broadband packages and will ask everyone to pay more. We will be able to prevent such a scenario only if we educate the people who will be affected. So lets try and share thoughts regarding Net Neutrality before it arrives in India and before the rule changes :)

What can we learn from Google's "Ten things we know to be true"?

Most of us trust Google and its products. Unlike any other company it has grown tremendously in a short period of time, disrupting a lot of industries (not just companies!) in the process. It includes the advertisement industry, the cable and network, phone industry and books just for a start. Using strategies like giving away its products for free, making process efficient and creating a strong defense - which are its products - around it castle (Search), Google has grown and thrived.

During this process Google has plotted 10 things down which they believe to be true. As a admirer of its growth I was attracted to these 10 rules and slowly started applying in my life. I observed good changes in my life, after I consciously started following them. So below are the some of the values which we all can learn from Google in order to utilize our time in a better way and grow.

It’s best to do one thing really, really well

This is the most valuable quote of the 10 things that applies to any situation. I certainly don't believe in multi-tasking. However I agree that multi-tasking is necessary to get things done. If you want to do some solid good work then make sure that you focus only on one thing at a time. It will be hard in the beginning but once you complete the first task with all your focus then you will understand the power of this rule.

Fast is better than slow

"Perfection is the enemy of progress". Some things in life do not need perfection. For example, I used to arrange things in a neat way even though I knew that I will use them in some time. Don't waste time on all these things. As Sheryl Sandberg mentions in her book "Lean In" "Done is better than perfect". So do these things a little bit fast spending only the amount of time it requires and not being obsessive about perfection.

Democracy works

I tweaked this quote from "Democracy on the web works" to democracy works. I have not greatly experienced this but from my observation I can see that whenever there is democracy in office, people tend to perform better. The more a person is able to voice his/her opinion the better the team performs.

Don't be evil

One of the most famous quote which became not just a philosophy that Google follows but also all the Silicon Valley start ups do. It can be clearly related to someone'e life. There are a lot of situations where we tend to do something rude or wrong and then we can prevent it by just thinking about it. Whatever decision we hastily make, just take a moment's time and think about that. Provide the benefit of doubt and prevent evil.

Focus on the user and all else will follow

If you are working for a client, either in the IT, Consulting, Services or Analytics then this rule will apply to you. As a person who belongs to this crowd, I have been strongly reminded of this time to time. While we spend more time on a project we tend to divert from what the client needs. Every day when you take a decision just remind yourself as to what the client wants. Don't divert from it. When we consciously do it we could avoid a lot of unnecessary errors. If you work for a products company, focus on the end consumer and make sure your products and services are delivered keeping in mind how the end user will use it. Always focus on the user and think as a user.

There’s always more information out there

How many of us have been so negligent about the access of all the information that we have. Two years ago when I found that you can do a Online course for free and still get quality education (using Coursera) I was surprised and also felt bad that a lot of people didn't know about it. So now as a first step if I need any info on something new, I search and collect all the information that I can from the Internet.

Great just isn't good enough

When we are working on something or trying out something new do not be complacent once you reach your goals. Strive harder and improve continuously. Make sure the standards that you set are so high, that you will never reach it. How do you think Google became the first 100 billion dollars valued company? The standard that they have set for the "Search" process is so high that they strive continuously to improve it. This led them to create a lot of improvements like name searches, instant search etc.,

There are three more things in the list which I have not applied yet. They are The need for information crosses all borders, You can be serious without a suit and You don’t need to be at your desk to need an answer. Do tell me if you applied it in your life and what is it that we can learn from it.