In recent interviews, Reid Hoffman, the founder and Chairman of LinkedIn, angel investor and partner at Greylock, the venture capital fund, has thrown his hat in the ring for defining web 3.0. This term, which everyone and their dog has an opinion on, will be all about accessing, analysing and using the masses amounts of data that each and every one of us produce.
Ever since web 2.0, the collaborative net, defined by players such as blogs, Wikipedia, Facebook and Twitter, we all produce masses of data every day. This is set to increase exponentially as the internet becomes closer and closer integrated in our everyday life, through devices such as smartphones, TV boxes, cars, fridges, etc.
At this point, Hoffman makes a useful distinction between explicit and implicit data. Explicit data is the data we explicitly provide - e.g. I have provided information about my age, sex, job and friends on Facebook. Up til now, much of the information we leave behind, falls in this category.
However, perhaps the most exciting opportunities originate from what Hoffman refers to as implicit data. This is data that we do not explicitly provide, but implicitly leave behind from our actions, e.g. geo-locational data and payments information.
As more and more of our lives become connected, this category is likely to explode in the next few years, and will create amazing business opportunities that we can already see companies positioning themselves towards, but also many opportunities that we can not yet predict. Essentially the type of black swans that Facebook, Twitter and LinkedIn have been over the last 5 years.
Of course there are also massive privacy issues associated with this data. Over the last 5 years, we have all become accustomed to sharing more information that would have been conceivable before. And, despite minor setbacks, we have generally been happy to make this trade off so long as online networks enabled us to better connect with the world around us, primarily used data that we explicitly provided and gave us a high degree of control over how the data would be used and shared.
However, with implicit data, this trade-off becomes far more complex. Firms that are to succeed in this new paradigm must therefore develop entirely new and more powerful value to their users, while they ensure that the users' data is stored, used and shared in a responsible manner.
Friday, 1 April 2011
Thursday, 31 March 2011
Amex Exec on Digital Payments and Key Criteria for Success
A couple of days after Amex launched Serve, David Messenger, head of the online and mobile business unit at Amex today spoke at the Web2.0 Expo about the emergence of digital payments and what Amex views as the key criteria to excel. Below is a summary of his talk along with a link to his talk.
Driver for digital payments:
Promise to merchants: whole new approach to marketing and promotions. Can we enable the insights from rich data captured to drive intelligent and personalised promotions.
Developing countries may be at the forefront:
Driver for digital payments:
- Mobile penetration
- Internet speed
- Social networking and commerce
- New POS technologies, such as NFC
Promise to merchants: whole new approach to marketing and promotions. Can we enable the insights from rich data captured to drive intelligent and personalised promotions.
Developing countries may be at the forefront:
- Limited existing infrastructure to replace
- Governments push for phasing out of money
- Scale: essential to keep costs low and get the data required to develop interesting analytics
- Platforms must bridge distinction between online and offline
- Need to be open (agnostic to payment method, technologies and form factors)
- Partnerships to drive scale in complex ecosystem
- Security: particularly as organisations will manage increasing amounts of sensitive data
- Real-world servicing: managing money and sensitive data, providers must be able to provide service to customers
- Data players (Google, Facebook,etc), that are primarily entering for access to data
- Banks and incumbent payments companies
- Startups that are offering a new approach
Wednesday, 30 March 2011
American Express launches Serve, its PayPal competitor
On Monday, American Express announced Serve, a digital payments platform and electronic wallet that will enable users to pay online and offline merchants with a broad range of payments options, including Visa and MasterCard credit and debit cards.
Serve will be accepted at all online and offline merchants that currently accept American Express, in addition to enabling users to perform Person-2-Person transfers. For offline transactions, users will initially be issued a prepaid Serve card that is directly linked to its electronic wallet. As these cards are considered prepaid, merchants will be charged the lower transaction fee associated with prepaid cards.
Although Serve will undoubtedly introduce an NFC solution shortly, Amex appear to go out of their way to remain technology agnostic and not associate itself too closely with any particular technology.
Partnerships will be core to Serve's long-term vision, focusing on verticals such as social networks, online commerce, gaming and entertainment. At launch, partners include Ticketmaster, Concur and Flipswap. Although Amex is likely to quickly grow this network, the initial list does not appear particularly inspiring.
It is beyond doubt, that Serve is a very core part of Amex long term strategy. And, Amex certainly have considerable assets to bring to the table; merchant network, world class servicing customer organization, robust payments infrastructure and a highly respected brand.
However, at present it is difficult to assess its likelihood of success. Although Amex intend to launch new functionality on an ongoing basis, Serve currently does not appear to bring anything new to the industry.
Moreover, it will be interesting to see if Amex, a company that has traditionally had its strengths in marketing and customer service, is able to compete in an increasingly technical and innovative industry. This might require a far greater cultural shift.
Serve will be accepted at all online and offline merchants that currently accept American Express, in addition to enabling users to perform Person-2-Person transfers. For offline transactions, users will initially be issued a prepaid Serve card that is directly linked to its electronic wallet. As these cards are considered prepaid, merchants will be charged the lower transaction fee associated with prepaid cards.
Although Serve will undoubtedly introduce an NFC solution shortly, Amex appear to go out of their way to remain technology agnostic and not associate itself too closely with any particular technology.
Partnerships will be core to Serve's long-term vision, focusing on verticals such as social networks, online commerce, gaming and entertainment. At launch, partners include Ticketmaster, Concur and Flipswap. Although Amex is likely to quickly grow this network, the initial list does not appear particularly inspiring.
It is beyond doubt, that Serve is a very core part of Amex long term strategy. And, Amex certainly have considerable assets to bring to the table; merchant network, world class servicing customer organization, robust payments infrastructure and a highly respected brand.
However, at present it is difficult to assess its likelihood of success. Although Amex intend to launch new functionality on an ongoing basis, Serve currently does not appear to bring anything new to the industry.
Moreover, it will be interesting to see if Amex, a company that has traditionally had its strengths in marketing and customer service, is able to compete in an increasingly technical and innovative industry. This might require a far greater cultural shift.
Monday, 28 March 2011
Google teams up with MasterCard and Citi for Payments
News is now breaking that Google has partnered with MasterCard and Citi to demo their new NFC-enabled mobile payments solution.
As has long been expected, the solution will initially launch on the Nexus S phone, with a number of other enabled phones being launched shortly, and the Verifone terminals that Google is rolling out in New York and San Francisco.
The most interesting aspect of this story comes from the recently published patent application that Google filed for the software behind their solution. The application describes Google as a third-party broker who receives the customers' shopping cart and coordinates the payment and shipping details.
This contrasts Google with other payment solutions, such as PayPal, that simply receive the payment details between the customer and merchant, and do not have access to detailed, level 3 data. Google have already positioned themselves as the masters of online data, and should they succeed with this venture, they will get access to the holy grail of offline data as well!
As has long been expected, the solution will initially launch on the Nexus S phone, with a number of other enabled phones being launched shortly, and the Verifone terminals that Google is rolling out in New York and San Francisco.
The most interesting aspect of this story comes from the recently published patent application that Google filed for the software behind their solution. The application describes Google as a third-party broker who receives the customers' shopping cart and coordinates the payment and shipping details.
This contrasts Google with other payment solutions, such as PayPal, that simply receive the payment details between the customer and merchant, and do not have access to detailed, level 3 data. Google have already positioned themselves as the masters of online data, and should they succeed with this venture, they will get access to the holy grail of offline data as well!
Thursday, 24 March 2011
Great Article about Facebook Deals and Payments
The below article reports on the new Facebook Deals platform, which it reports will exclusively focus on social experiences, such as renting a karaoke room with friends or a tour of a haunted house, and may require customers to use Facebook Credits for payment.
The article goes on to suggest that Facebook's much talked about Payments subsidiary may be intended as the vehicle that manages the payments interface for Facebook's e-commerce ventures, of which Deals is the first.
Although Facebook Credits currently takes 30% of the total purchase amount, the article suggests that this may still be a reasonable deal for deal-sites that already spend a great deal on Google and Facebook ads to attract customers in the first place.
Regardless, Facebook has already signed up Gilt City, HomeRun, OpenTable, PopSugar City, Tippr, KGB Deals, Plum District, ReachLocal and Zozi for Deals, so the proposition must be reasonable.
http://networkeffect.allthingsd.com/20110324/more-on-facebook-deals-will-only-include-social-experiences-may-use-credits/
The article goes on to suggest that Facebook's much talked about Payments subsidiary may be intended as the vehicle that manages the payments interface for Facebook's e-commerce ventures, of which Deals is the first.
Although Facebook Credits currently takes 30% of the total purchase amount, the article suggests that this may still be a reasonable deal for deal-sites that already spend a great deal on Google and Facebook ads to attract customers in the first place.
Regardless, Facebook has already signed up Gilt City, HomeRun, OpenTable, PopSugar City, Tippr, KGB Deals, Plum District, ReachLocal and Zozi for Deals, so the proposition must be reasonable.
http://networkeffect.allthingsd.com/20110324/more-on-facebook-deals-will-only-include-social-experiences-may-use-credits/
Wednesday, 23 March 2011
Foursquare Explore: the Real World Google Adwords?
Yesterday, Foursquare announced that they will launch a new feature called Explore, which will recommend places, such as restaurants, bars and cafes, based on a user's check-in history and and the history of people like them.
This is exciting news as it demonstrates Foursquare's intent to influence the behaviour of their users. If they are successful in doing so, the service will clearly be a fantastically valuable marketing features to merchants that want to attract traffic to their locations.
In this sense, it has the potential to become the real-world equivalent to Google, which influences online traffic. And, in similar ways to how Google developed Adwords to buy advertising space connected to people's search terms, Explore could enable Foursquare to sell sponsored recommendations, alongside their natural recommendations.
Moreover, Explore could enable Foursquare to go one step further than Google has done. By leveraging their partnership with Amex, or launching their own mobile payments solution, Foursquare will be able to track purchases that follow sponsored recommendations.
Research has indicated that merchants on average are willing to pay 7-8% for marketing messages that specifically lead to purchases, 2-3 times more than the current merchant fee that credit card companies charge. This type of solution may therefore be the next generation interchange fee and Foursquare Explore may be an important step on the way.
This is exciting news as it demonstrates Foursquare's intent to influence the behaviour of their users. If they are successful in doing so, the service will clearly be a fantastically valuable marketing features to merchants that want to attract traffic to their locations.
In this sense, it has the potential to become the real-world equivalent to Google, which influences online traffic. And, in similar ways to how Google developed Adwords to buy advertising space connected to people's search terms, Explore could enable Foursquare to sell sponsored recommendations, alongside their natural recommendations.
Moreover, Explore could enable Foursquare to go one step further than Google has done. By leveraging their partnership with Amex, or launching their own mobile payments solution, Foursquare will be able to track purchases that follow sponsored recommendations.
Research has indicated that merchants on average are willing to pay 7-8% for marketing messages that specifically lead to purchases, 2-3 times more than the current merchant fee that credit card companies charge. This type of solution may therefore be the next generation interchange fee and Foursquare Explore may be an important step on the way.
Tuesday, 22 March 2011
Tesco Exec: Security Concerns with NFC
The head of R&D for the online operations of Tesco's, one of the world's largest retailers, has expressed security concerns with NFC. Nick Lansley has come out saying that "NFC is not as safe as people make it out to be". Essentially he is concerned that outside parties are able to pick up (or eavesdrop) the signal that is transmitted between the retailer's terminal and the customer's phone.
Although Mr Lansley emphasised that he was speaking on his own, not Tesco's, behalf, these are the type of concerns that could stall NFC adoption. Of course, this is not a new concern. It has long been acknowledged that NFC is vulnerable to eavesdropping, but that a third party will only pick up a customer's account number and possibly their name, but not sufficient information to perform card fraud.
Still it will be interesting to see if other prominent retailers will have similar concerns and to what extent it will impact retailer and consumer adoption.
Although Mr Lansley emphasised that he was speaking on his own, not Tesco's, behalf, these are the type of concerns that could stall NFC adoption. Of course, this is not a new concern. It has long been acknowledged that NFC is vulnerable to eavesdropping, but that a third party will only pick up a customer's account number and possibly their name, but not sufficient information to perform card fraud.
Still it will be interesting to see if other prominent retailers will have similar concerns and to what extent it will impact retailer and consumer adoption.
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