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Blog, Innovation, Mobile, sxsw

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Mobile money: the possibilities (and challenges)

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In the last year we’ve done several research projects on mobile money at FACE, as excitement around the possibilities of “mobile wallet” develops. SXSWi was a chance to hear from leading players in the industry – American Express, PayPal, Intuit and more – on where this technology is going.

What is mobile money?


It’s important to think about the category as “mobile money” rather than simply “mobile payment” or “mobile wallet”. What’s at stake is much bigger than just transfering your credit card to your phone, or simply replicating the functions of a wallet (payment, loyalty cards & receipts) on a mobile device. The technologies available – smartphones, geolocation, the development of 4G and widespread wifi, and of course NFC – mean that what’s possible is in fact much greater: re-imagining the whole human-money interface.

What’s this mean? It’s about looking at every way in which we interact with money, and thinking about the transformations in user experience that are possible if we make it mobile. The transactions up for grabs are many and varied:

  • payment in a shop (of course)
  • paying a friend back for the taxi ride last night
  • checking to see if your credit card payment has gone out
  • transferring money immediately before making a big purchase to ensure your account doesn’t go overdrawn
  • adding up your receipts to see how much you’ve spent on eating out this month
  • calculating whether you’ll be able to get a mortgage
  • buying a flight (or just a coffee) with reward points – mobile money encompasses stored value, not just legal currencies
  • getting a discount email like Groupon and redeeming that online
  • searching for the cheapest iPad retailer online
  • or searching for a local restaurant offering a discount 2-for-1 deal
  • …and much, much more.

Making it mobile doesn’t simply mean “available on my mobile phone screen”. The mobile phone is a smart, location-aware computing device, carried almost always within a metre of our bodies, which is always connected to the internet and keeps us always connected to the people we know. Taking full advantage of these properties is what makes mobile money fundamentally transformative. The word “revolutionary” is overused in business, but making money truly mobile is a much bigger deal than the rise of credit cards in the 1960s, the last biggest step-change in payment methods.

Challenges

There are however some substantial challenges in rolling out mobile money to its full potential. Here are five:

1. Money is a difficult sector to innovate in

Regulation is a big hindrance on start-ups in the money space: there is both legal incumbrance and a cultural resistance (aka trust) to companies taking risks, trying something new – and perhaps not succeeding. The big incumbents are also an obstacle – banks own the central customer account (current/checking accounts), and Visa,  Mastercard & Amex control payments.

Building new back-end processing systems is very difficult, and even the big over-the-top players (PayPal, Google Wallet) are essentially innovating on top of existing card payments i infrastructure. Dwolla – a New York peer-to-peer (P2P) money startup – is worth a note here, for one that isn’t.

2. What’s happening with NFC?

NFC stands for near-field communications. It’s a type of radio communications – like wifi or Bluetooth at a different frequency – that allows for short-range (10cm) communciation between devices and tagged objects, other devices, and merchant terminals. It is ultimately the key way contactless payment will be delivered – although it’s worth remembering that mobile money means a lot more than just in-store payment.

Unfortunately NFC uptake is moving extremely slowly. So far there are only a handful of NFC-enabled handsets in the UK, and many of them are unappealing low-spec phones. The big player is of course the Apple iPhone, and so far there’s no news as to when or how NFC will be implemented on this device.

Without a standardised technology, merchants are naturally unwilling to invest in NFC payment terminals so these remain in a few chain stores only – MacDonalds since 2003; Pret A Manger, and so on. We’re 5+ years away yet from “leave your cash & card at home”.

3. UX benefits of mobile payment in-store

One eye-opener for me about our US trip was just how annoying magnetic-stripe payment really is. US banks haven’t been able to agree on a Chip & PIN standard (as in Europe). As such payment requires the merchant taking the card away (a security risk) and two stages of receipts. NFC payment would clearly be much quicker than this, providing a clear driver for consumer uptake. However, it’s got minimal speed and thus user experience benefit in Europe over the faster Chip & PIN.

4. Trust

Many commentators rate the chances of the over-the-top tech players (mainly Google, Apple, Paypal) as ahead of the banks. Despite some bank mobile apps getting rave user reviews (RBS and Natwest’s mobile banking apps) and a strong move from Barclays Pingit on peer-to-peer transfers, there’s a suspicion that banks are likely to stick to “mobilifying” what they already do, rather than really innovating and reinventing the category. That transformative capacity – and also slick UX design – would seem to be more the property of the tech companies.

But PayPal has a trust problem: we see consistent and frequent stories of how it freezes people’s accounts for months without explanation or recourse. That’s infuriating when it’s your tool for P2P and small-merchant payments – it’s completely untenable if they’re operating your current account. There’s also increasing consumer suspicion of just how much Google knows about us – so giving them access to our finances may be a step too far.

5. Who’s actually thinking big enough?

This was the core insight from a fantastic solo SXSW presentation by Omar Green, Director of Strategic Mobile Initiatives at Intuit, the payment technology firm. He talked about “creating a mobile wallet worth having”, and said he thought the company who would “win” mobile money would be the one offering every transaction listed above and more.

As suggested above, the risk is that too many of the mobile money launches we can see on the horizon are thinking too small. Credit cards on your phone and no additional functionality – so what’s in it for me the user? A couple of dozen big-brand partners rather than available everywhere – so why use? There will certainly be some early adopters who’ll take-up simply to be first and look ahead, but they’re a minority. Strategically banks, MNOs and tech firms need to recognise that these standalone offers must only be stepping stones to something much bigger if they’re going to get any real traction. (Barclaycard have had an NFC credit card since 2003. No-one cares.)

Omar Green had a vision of what mobile money could be that I’ve not seen from anywhere else in the industry. The goal is a seamless money experience addressing our fundamental financial and emotional needs – balancing the books, saving for the future, feeling in control and feeling like we’ve spent our money wisely.

Question is, how seriously will the various mobile payment and wallet apps launching this year will really address these?

Insights, sxsw

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Brand Patterns

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The Brand Paradox
One of the most interesting sessions I attended last week at SXSW was the panel “Brands as Patterns,” which we mentioned in our post “5 Panels for Researchers to See at SXSW“. The title for this session comes from a paradox. Traditionally brands have been definitive, singular and complete focused on the 3 year brand plan to deliver consistency using repetitive messaging while consumers interactions with a brand are more iterative, varied and changing in real time. Brands today though need to be both consistent and different, definitive and iterative. One way to help us make sense of this paradox is to see them as patterns – patterns create consistency through difference.

A person spinning clay

Photo by BLW Photography on Flickr

The shape of Brands is changing
We all know that the shape of brands is changing. At Face we see them much more as social entities because of the interactions, conversations and content consumers are sharing with each other, in and around the brand. This dynamic means that what the brand can be or mean to consumers is constantly shifting. Hence today brands are more about shared experiences defined as much by the user as by the brand manager.

Brands need to be coherent rather than consistent
Marc Shillum from Method who was one of the panellists agrees stating that brand value is defined by this two way experience and continued iteration. He goes further by saying the brand should be the interface of these experiences so “put the brand in the interface not on it”. Seeing brands as patterns and moving the debate from brand consistency to brand coherence is key. Shillum argues that “It is better to strive for coherency, where consistency in design is married with a system of meaning that people can believe in and choose to be a part of: the brand. This belief comes from the brand, and tying the two together - interaction and brand – in a coherent system will facilitate experiences that are far richer and longer lasting. So we must create the brand pattern. By understanding as much as possible what the brand means, how that meaning is constructed, and what elements make it unique, we can begin to explore and define patterns of behavior that help support the brand meaning in a way that is also valuable for people”.

Brands need to be Active and have a Rhythm
The theme of brands as patterns was continued by Greg Johnson the Global Creative Director of Hewlett Packard who talked about casting a set of principles and context to “pour the brand into”. This helps the brand to be coherent and distinctive by owning signature expressions that are varied but recongnizable, giving continuity to how the brand manifests itself but in a fluid and iterative way. In his view brands need to be active, built by what it does not what it says. Robin Lanahan, Brand Strategy Director from Microsoft talked about pattern language in brands being about the story – the story endures as the context changes so brands need to have a rhythm.

A violin on sheet music

Photo by M-Trudeau on Flickr

Brands need to have smart variation
Finally Walter Werzowa, Composer, compared composing to developing a brand. If music is too repetitive it is boring, too changeable then it is chaotic – both result in losing your audience. But if brands display smart variation like Beethoven then that’s different. I’m no musician but apparently in the first part of Beethovan’s famous 5th Symphony you hear the same motif 45 times yet he only repeats the motif in exactly the same way 4 times – the other 41 times there are variations to it yet we still recognise them to be  connected to the same motif. So we lose audiences with either too much chaos or too much repetition. He argued that patterns are a driving force in our brains so we are open to pattern recognition.

What this means for research
Of course, this is still just theory and observation, but it does pose some questions that researchers can explore, such as what does a successful brand pattern look like and what does a poor brand pattern look like? Researchers now have the challenge of creating a real time measurement model that can bring this to life with simple visualisations, and this is something we should be all be looking into now.

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The Point of View from SXSW

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SXSW is an amazing event. As a market researcher, even just a couple of days have taught me much about the state of the digital communications industry and the trends to expect to see in the future. But it’s always important, particularly as a qualitative researcher, to remember where I am standing.

The Austin of SXSW is nothing like the Austin of the rest of the year. I’ve seen a bus dressed up to be the Hootsuite logo on wheels, a Group.me grill and patio area, the Catch a Chevy cabs, and the now-famous Foursquare court, not to mention the variety of pavilions around the Austin Convention Center itself, such as Pepsi’s.

collage of sxsw photos

After looking at these pictures, does it not seem like a real-world Second Life?

collage of second life images

Original images by moggs oceanlane and John “Pathfinder” Lester

Second Life is a make-believe world, and though SXSW takes place in the real world, it may have more in common than a larger-than-life brand presence. Though I do believe there is a lot of value in attending SXSW, there is also a lot of Kool Aid floating around. Not every panel is amazing. Not every presentation reveals startling and new insights, not every mixer introduces you to that amazing start-up that you had never heard of but that will change the world over the next year.

And yet SXSW keeps growing.

This trend is being remarked upon by the other SXSW attendees. I attended a panel called “Social Media is a Bubble and SXSW is a Fad.” (To clarify, the “bubble” mentioned was the belief that there is a financial bubble caused by inflated value estimations of social media companies, not a usage bubble.) This panel was highly participatory, with the audience engaging and providing insights almost as much as the panelists, both using the microphone and the Twitter hashtag, #smbubble.

Common issues brought up were:

  • The overabundance of programming – As SXSW has expanded, it has grown not only in attendance but also the range of subjects covered. Deciding what to go to can be difficult. There are just too many interesting topics represented.
  • The varying-quality of some of the events – Events are chosen about a year before-hand and the selection process is not as stringent as it could be. We have agonized over which events to attend, leading to several interesting insights,  but this takes real effort. It could be made easier.
  • The sheer size of the convention – Of course as convention attendance grows, accompanied by an increasing variety of programming, the convention needs more space. It’s just hard to get around – much less battle the crowd.

But though SXSW has its problems, it is still worth attending.

  • Though the programming might not always be insightful, the mix of people that SXSW has attracted, including people from the other the programming tracks, Film and Music, means that the ideas and the experiences being shared provide attendees with an alternate point of view than they would otherwise see.
  • The variety of programming also means that, if you can put in the effort to shift through everything to find the most relevant events for you, as we have done with the 5 panels relevant to researchers post, you can draw real and actionable value from the event.
  • And it is worth not underestimating the sheer creative value of gathering all the latest and most vibrant displays of technology in one location. Yes, those “Second Life” style installations are useful.  Many of the attendees I spoke with have said that when they return from SXSW they feel “jazzed” and ready to tackle their work with refreshed eyes.

As researchers we must always be aware of our own vantage point. We must be aware that by attending SXSW we put ourselves at risk of sipping a bit of Kool-Aid. But as researchers we must also be ready to look at how the world is changing and meet the influencers who might just be the ones changing it. We must be ready to look at the world through another vantage point, and SXSW has the ability to help us do that.

Social Media, sxsw

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Data Lockers: The Future of Personal Data?

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One of the themes that is running through SXSW this year for me is how a major shift is taking place where all the data we are creating as consumers will not be owned, controlled and monetised by brands or companies but by us. New business models, tools and apps are putting us in control of our own data and this is very empowering because it means that we can start to shape the world around us, our interests, our passions, our whole lives.

lockers

Photo by Cristina V on Flickr

This theme is at the heart of Fran’s blog which challenges the whole Brand as API model by asking “What if, instead of focusing on what the API allows the user to Pull we start focusing on what the API allows the user to PUSH, meaning allowing the user to ingest a controlled and owned selection of brand-relevant personal data into the brand API such as user context, passions, interests and behaviours?” He rightly points out that if he could feed for example his location data into the API of his mobile network operator (plugging in his mobile gps, Foursquare or Sonar data) then he could get the most customised international plan based on his travel habits. In effect we’re turning the transaction model on it’s head – as a consumer I have lots of data and information that is really valuable to you Mr Brand and I will trade this for something that I can get in return from you.

This was at the heart of two other presentations I went to today:

The first was by Amber Case the Co-Founder of Geoloqi.com, a Cyborg Anthropogist, who painted a picture in her talk “Ambient Location and the Future of the Interface” of a world where technology helps to shape everything around you without the need of a laptop, iPhone, iPad or any interface. Almost unimaginable, I know, but it’s a world where technology takes a back seat, where the interface is completely reduced so you don’t have to do a search, follow a little pin on Google Maps or load an app. The best technology she said should be invisible and help you to live your life in the way you want to. This is a very big thought re-inforcing the theme of putting the individual at the centre his/her world.

The second presentation “Data is the New Oil: Wealth and Wars on the Web” by DJ Patil,  the Data Scientist in Residence at Greylock Partners and Owen Tripp, the Co-founder of Reputation.com focused on the challenge of turning what they called “data vomit” to data action. One of the key ways to help make data actionable they said was to make the consumer part of it and give benefits back to consumers for sharing their data (including returning data back to the user so its actionable so it  adds value to them). At the moment people give away their data while companies and brands make money so why not create personal data vaults where we store all our data and related content for multiple purposes. If enough of us did this we would turn our own data into a form of personal currency which if it achieved scale would turn the tables on brands and companies.

There are a number of start ups such as Personal who are doing this. There are also start ups in the education field that are building portfolio platforms that allow students to learn from their own data and share their data with other students. This is driving a whole movement of students who want to own their own data. It was a movement of students that started Facebook, so could this be not only the next big thing but the answer to the privacy debate around Big  Data.

Relevance for Researchers: As the control of data moves from the brands and platforms back to the consumers, the way the consumers relate to the brands and receive brand communication will have to change by necessity. We have to be aware of this shift in order to appropriately track this shift for our clients.

Augmented Research, Blog, Conferences, Innovation, Mobile, Social Media, The Future, sxsw

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The Brand as API. Brand-centered vs User-centered Architectures.

  • Date March 11 2012
  • Posted by Francesco
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As someone who has been working on the idea of making brands human by plugging them into the fabric of society, today I definitely couldn’t miss a session called “Brand As API” hosted by Peg Faimon and Glen Platt from the Armstrong Institute for Interactive Media Studies, Miami University Oxford, Ohio.

The premise is clear and simple, and extremely agreeable:

“As brands finally begin to deliver on the promise of a 1-to-1 relationship with their customers (through social media, mobile, and data-driven tools), it is critical to develop a new foundation for that relationship. This requires brands to leave the “broadcast relationship” and, instead, build a relationship sharing communication, innovation, and the very product/service itself. Insight into this relationship can be found in the structure, language, and use of APIs (Application Programming Interface). APIs provide a set of rules – a language for connecting to data and services. To remix. To build. To leverage. To extend. Many API calls provide explicit metaphors for the ways brands can connect to customers. Generally, the API relationship provides insights into the role of brands in the customers’ life. This conversation will explore these metaphors, share case studies, and work to build a language for better connecting consumers with their brands.”

You can look at the full presentation below and get the details on how they think a brand as API might work.

The main idea behind the concept of the Brand as API is that it would allow to open up the Brand, its assets and its services and allow people (consumers, businesses, developers) to do things with that Brand, from playing with the contents and the identity of the brand all the way down to designing products and services.

Peg and Glen went on discussing the key elements of an API and how they relate and map against new ways of building meaningful relationships between brand and consumers.

While this is completely agreeable and sensible, the idea of the Brand as API as crafted in this presentation still seems to rely on two assumptions:

1) The assumption that people want to do stuff with that Brand, pulling information and data assets off a Brand in order to create something custom. And while we know this is true, we also know this only applies to a very small percentage of the user base of the Brand.

2) And the mother of all assumptions: the belief that the relationships consumers have with brands are primary while we know that consumers’ most valuable relationships are with other consumers, and what brand CAN try and do is fit in those relationships in a meaningful and/or useful way, i.e. as social currency or enablers/problem solvers.

It seems that while the analogy between brands and APIs has got incredibly long legs, we are still looking at it from the wrong perspective: the brand perspective.

What if, instead of focussing on what the API allows the user to Pull we start focussing on what the API allows the user to PUSH, meaning allowing the user to ingest a controlled and owned selection of brand-relevant personal data into the brand API such as user context, passions, interests and behaviours?

What if I could feed for example my location data to the API of my mobile network operator (plugging in my mobile gps, Foursquare or Sonar data) and get the most customised international plan based on my travel habits?

And what if consumers could ‘sell’ this personal data to brands? Consumers used to pay brands for products. We are now heading towards a future where digital data abundance means brands are going to pay consumers for their personal data. Users get customised offerings while remaining in control of their personal data, brands increase their relevance by investing on live audience intelligence rather than push strategies.

This is why I believe the biggest added value of a Brand API lies not so much in the ability to provide a Brand-to-User stream of data rather in its ability to manage a bi-drectional stream of data, where the user can shape the brand around itself using the vast amounts of personal data he is in control of.

And this is why i believe the biggest and most important asset of a brand API is not the Brand Essence, rather the User Profile.

Such an API would not be shaped around the brand but around the user and his needs. And effectively it would be an Audience API rather than a Brand API. Something that could sit at the centre of the business and power any decision the business has to take, from innovation to marketing to CRM.

But the thing is, in order to be plugged into the fabric of society brands probably need both, or even more than two APIs. Like any other social product/service out there.

Brand As API – SXSW 2012 Presentation

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