Pay-by-mobile plan taps up UK consumers
Turning every high street store into a showroom
Britan got a new pay as you go mobile provider this morning, which will put paying for things other than mobile service at the centre of its business model.
Simply Tap is backed by Carphone Warehouse and Best Buy Europe, but is part of an explosion in ways of paying for stuff that's coming our way.
The service will be run by the Mobile Money Network, a company set up by Carphone Warehouse and Monitise, which (the Guardian tells us) has just acquired a new chair in the shape of Former M&S boss Sir Stuart Rose.
But despite the name, customers of Simply Tap won't be able to pay for things with a tap, or even a wave, of the phone – though integration of such capabilities is obviously on the cards. The idea is to provide codes for products, to be displayed on billboards or posters, or even in store, so the user texts off the code and the goods are delivered direct to the home.
In fact, it's very reminiscent of an m-commerce application Swiss Telecom trialled more than a decade ago: in that version you just dialled a phone number printed on a poster, caller ID was used to identify your address and dispatch the goods, and the cost appeared on the next phone bill. The problem was that such a system required a monopoly, and unfettered access to customer details, both of which fell out of favour around that time.
Simply Tap will get round that by requiring that users pre-register, providing a delivery address and payment method (credit or debit card). The company will try to get the shops and businesses to attach Simply Tap codes to their products and services, ideally accompanied by the same data as a QR Code, so it can be read with the smartphone apps Simply Tap will provide.
But smartphone users are just as likely to go to Amazon, which already provides an application to scan the barcode of a product and send the product to one's home address with a tap to the screen, providing (to the user) a very comparable service without having to negotiate with retailers to attach new codes to their products.
Amazon doesn't sell everything of course, and retailers might appreciate linking directly to their stores, but over the next 12 months we're going to be awash with companies offering to process payments for us and our retailers.
Over in the US, American Express has just unveiled its own scheme: Serve. Serve attacks PayPal as a peer-to-peer transaction service integrated with Facebook, as well as offering access to the American Express network of terminals and cash points to access money paid into the account.
In the UK, O2 Money (launching later this year) and Orange Cash (already up and running) work much the same way: one pays money in up front, which can then be used to pay for stuff using the internet or a phone or even a plastic card, with NFC to follow at some point. The advantage is touted as greater control, but that control comes at a price.
All this activity in payments is really about getting rid of cash, which is expensive and difficult to handle. But with so many people trying to scoop up some of that saved money, one wonders if there will be any savings left to pass on to the end customer who is going to have to use all this stuff. ®
We know you're as least as excited about all this as the people who're seeking to profit from introducing ever more techologised ways to part citizen consumers and their money. But could you at least get a keyboard that's not sticky?
On a more serious note, I note that this is indeed all one way. The payment model in every single new "payment method" is always money being directed soundly /away/ from the individual citizen consumer. Apparently citizen consumers get to ride second class, with first class being reserved for citizen corporations.
To me, a natural person, cash is neither expensive nor difficult to handle. Certainly not to the point that the price of the alternative is worth it. You can't even pay anonymously with any of those electronic systems. So let those corporations swallow the cost; it's their risk of doing business, and I don't see why they should be allowed to shift it over to us.
QR Code replacement
Setup an account with Simply Tap and then go around replacing QR codes on other people's adverts with your own. Collect some money, fold the account and repeat with new identity/company.
PayPal: Dead Man Walking
“Bank customers of participating financial institutions will have the option to select a Visa account as the destination for funds when making a personal payment. By simply entering the recipient’s 16-digit Visa account, email address or mobile phone number, consumers can send funds directly from their bank account to a recipient’s Visa account.”—Visa (16 March 2011)
Draft Media Release re PayPal
“It is with great sadness that eBay’s Chief Headless Turkey, John Donahoe, announces the probable demise of eBay’s most ugly daughter, PayPal. Donahoe says that PayPal is expected to be soon stricken by particularly virulent strains of Visa/Mastercard simplified “online” payments processing, and these afflictions will be greatly aggravated by PayPal’s lack of any direct financial institutions support and a great deal of PayPal merchant dissatisfaction, particularly with respect to PayPal’s grossly unfair, “all responsibility avoiding” user agreement, most primitive risk management processes, and grossly unprofessional, buyer-biased and fraud-facilitating (indeed, effectively non existent) transactions mediation—to name just a few of the problems that PayPal “merchant” payees have to endure.
“Donahoe says that after such affliction PayPal’s health may be expected to deteriorate rapidly and, if ultimately not completely incapacitated, will most likely be kept alive only with the aid of the “life support” provided by eBay’s mandating the use of PayPal on what little there will eventually be left of the Donahoe-devastated eBay Marketplaces. There is no cure for this condition and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal will be able to continue to underpin the eBay Marketplaces’ deteriorating revenues too far into the future.”
Yes, it’s a send-up but, still, it accurately describes PayPal’s unregulated, most unprofessional, “clunky” operation. Had the developers of the original “bankcard” concept ever behaved the way PayPal behaves, towards its payees in particular, credit/debit cards would never have gotten off the ground, and we would still be paying for all our purchases with bits of paper and little metal discs.
PayPal is not a “bank” and is not prudentially regulated as are the banks. PayPal has been forced down the throats of eBay merchants—much to the distaste of most of them. Without eBay’s mandating the use of PayPal it would still be little known (and conversely, without PayPal, the eBay Marketplace would be going down the toilet at an even faster rate than it presently is) and, regardless, PayPal is the most despised, unprofessional, unscrupulous, wire fraud-facilitating payments processor on the planet.
No thinking person should ever allow PayPal to draw funds directly from a bank account. PayPal should only be given access to funds via a retail bank-branded Visa/Mastercard credit card account: that is the only way to get any protection from PayPal’s fraud-facilitating practices and to get any effective transaction mediation—and then not from PayPal but from your retail bank via their real credit card transaction-mediation process.
All the payments processors that do not have the direct underlying risk-managing and real transaction-mediation support of the retail financial institutions (the “banks”) that are ultimately involved at either end of each transaction—as does have the likes of Visa/Mastercard—suffer all the same material handicaps that PayPal suffers. The “banks” may be disliked by some but they at least supply a “professional” payments processing service.
Undoubtedly, if and when the retail banks decide they want to take the final step (and probably the greater risk and extra work involved) and offer a simpler, “online” payments process, similar to that which PayPal offers, to the many amateur merchants who may otherwise not want (or not qualify for) a bank credit card “merchant” account, and the banks offer that service in their usual professional manner via the likes of Visa/Mastercard, the clunky PayPal will very quickly disappear into the history books—there is nothing surer than the sun will rise in the morning.
Enron / eBay / PayPal / Donahoe: Dead Men Walking.
What's the advantage?
I can see how the near field stuff can be convenient for buying a coffee. It has been possible, for several years, to buy a tube ticket simply by sticking your card into a machine, without those tedious extra 2 seconds required to enter your PIN.
But if I am buying something big and expensive enough to require home delivery, I will have invested some considerable time in researching and choosing the item, probably visiting several shops to look at the alternatives (even if I ultimately buy online). What is the problem with just using my existing credit card to pay?
Having to pre-load my phone with cash is a non-starter. You will either find there isn't enough on the phone to buy what you want (even though you have enough in the bank), or worst case you accidentally go overdrawn even though you have cash on your phone. Why wouldn't I just use my credit card?
Not to mention a whole new raft of issues of security, consumer rights, scams, small print, handing over my cahs to unregulated companies, etc. No thanks.
"the American Express network of terminals and cash points"
This must be a US-only thing, right?
In the UK: I've not seen any, ever (unless they're hidden in Amex offices).
In France, Germany, Italy (admittedly a few years ago) never seen any either.
Amex is the corporate travel agent's friend. To the rest of us, it's worthless.