Author: Paul Wallbank

  • Time to strike deals

    Time to strike deals

    It didn’t take long for the competition in the payments market to heat  up after the announcement of Apple Pay last week as PayPal launched a campaign asking if you’d trust your financials to a business who can’t protect your selfies.

    While PayPal  pokes fun at Apple, there are more serious competitive pressures developing as the companies start negotiating with credit card providers and banks to reduce their rates. This is something that will be an immediate benefit for businesses of all sizes who are prepared to renegotiate their contracts.

    Most businesses, big and small, are poor at monitoring what they pay for a service; while they’ll shop around and negotiate when they’re looking for provider, they’ll let often these contracts go for years without reviewing them – something that utilities like banks, telcos and power companies take advantage of.

    I was reminded of this earlier this week at a lunch with some senior Qantas accountants who were quite open about how every supplier’s contract was constantly reviewed and discounts were aggressively pursued. It’s a tough life for the airline’s subcontractors.

    Times are tough for Qantas though, having sustained a 2.8 billion Aussie dollar loss last year along with constant declines in market share and stock prices. So it’s not surprising they have an aggressive cost cutting strategy in place.

    Many other industries are now looking at the same problem as the global economy is now in a phase of at best anemic growth for the foreseeable future, which makes it essential for all businesses to start reviewing their costs.

    With the banking sector now being disrupted by companies like PayPal and Apple, it might be time for all businesses to ask some hard questions of their banks and payment providers. The time is right to strike a deal.

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  • The business or your sanity

    The business or your sanity

    Yesterday Microsoft confirmed the rumours that it would buy Minecraft developer Mojang for 2.5 billion dollars.

    Following the announcement, Mojang founder Markus Persson — aka Notch — wrote a touching blog post on his leaving the company he founded.

    The business had become too big and the demands of Minecraft’s legion of fans were taking their toll; it was time for Persson to move on to keep his sanity.

    “If I ever accidentally make something that seems to gain traction, I’ll probably abandon it immediately.”

    For all the hubris we hear from technology company founders and CEOs, it’s those like Persson who probably will end up making the most difference to the world.

     

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  • Activating main street

    Activating main street

    The future of retail is being fought out on three fronts believes eBay’s Michael Camplin  — global, local, mobile and data.

    At eBay’s Commerce Innovation Showcase at its San Jose head office Champlin shows visiting partners, media and government officials part of the payments giant’s vision for that future.

    “It’s about connecting buyers and sellers across the globe,” says Champlin. “Local is important for us because even with the growth of the online ecommerce revolution that we’re in the middle of right now we still see 75% of commerce happens within fifty miles of the customer and 90% of that happens in bricks-and-mortar stores.”

    “So to be able to connect buyers and sellers in those local stores is a major push we have at eBay.”

    paypal-innovation-tour-003

    The first presentation in the tour demonstrates a day in the life of an eBay customer from the bedroom of a fictional customer, Reese McLaren, a funky young guy shopping for new equipment ahead of a camping trip. Champlin illustrates how Reese can order, pay and collect through a store’s integrated online service from his home.

    On the other side of the transactions, store employees use the PayPal apps like Red Lazer and Braintree to complete the order. A key part of that is using beacon technologies to log a customer into the store to alert staff that a customer has arrived to collect an order.

    paypal-innovation-tour-015

    At the next stage of the tour, we visit some demonstration stores; first we start with the Burger Bistro where eBay’s Eric Armstrong shows how restaurant’s point of sale system is integrated with PayPal services, showing waitstaff who is logged in through the company’s app.

    Integrating PayPal’s services into the establishment’s point of sale system means customers can order through the PayPal Wallet service and waitstaff know if a customer has paid through the app.

    paypal-innovation-tour-012

    The app also speeds up settling customers’ bills as diners can pay the check through their phone and not bother with using cash or swiping credit cards.

    One key point with PayPal Wallet is that users can enter any payment form that suits them and choose whichever option suits them at the time including direct bank transfers and credit cards.

    paypal-innovation-tour-006

    Another area that PayPal are pushing out are coupon offers. At present the company is subsidising them as they test how the services work. The objective is to offer a digital equivalent of everything people currently have in their wallets.

    For staff, eBay are offering the ability to bring your own device for point of sale systems with cloud base apps turning staffs’ tablets and smartphones into POS terminals.

    paypal-innovation-tour-028

     

    Tying into the Point of Sale capability is the PayPal Now service that allows establishments to swipe credit cards directly into the app through a dongle that reads the chip or stripe. Despite the rise of online payment services, swiping credit cards is still the main way US customers pay their bills.

    paypal-innovation-tour-031

    Despite the continued popularity of credit cards, eBay are hoping to move customers over to the online services through ease of service; the one stop authentication service means customers are logged into the payment platform as soon as they check into a location.

    One area PayPal sees great opportunity in stadiums and major events where attendees automatically check in and can then access food and souvenir stands without having to re-authenticate or authorise each purchase they make.

    paypal-innovation-tour-039

    A key part of eBay’s retail strategy is the use of beacons to monitor customers entering establishments. The one illustrated is the PayPal beacon that was a limited release earlier this year. The device doesn’t have its own battery, instead relying on a USB socket for power.

    Two weeks after this tour Apple launched its Pay service with its range of integrated APIs to offer many of things shown in this showcase. eBay and its Braintree subsidiary was conspicuously missing from the listed partners.

    For PayPal and eBay the field has suddenly become more competitive, this is a sector that is now at the forefront of the battle between today’s internet empires.

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  • A unicorn in the wine industry

    A unicorn in the wine industry

    “I was a closet tech guy until the 2000s,” says Vintank’s founder Paul Mabray in describing how digital technologies are changing the wine industry to the Decoding The New Economy YouTube channel.

    We’d spoken to Paul before about the forces changing the wine industry and visiting him in the Napa Valley gives some perspective on the opportunity the sector has in capturing the enthusiastic US wine market.

    Paul’s first venture into wine technology was with Inertia Beverage Group in 2002, “when I started Inertia I said ‘hey, there’s this thing called the internet’”, Mabray recalls. “They said ‘hey Paul you’re so cute, the internet won’t be around in a couple of years.’”

    The internet being a fad turned out not to be the case and Vintank evolved out of the rising importance of social media to industries like wineries.

    “Vintank is the mission control of social media, the one stop engagement platform for the wine industry,” says Paul of his social media listening service which he and co-founder James Jory established in 2009.

    Wine is lagging other industries in adopting social media and other digital technologies because it’s avoided many of the disruptions other sectors have had to deal with.

    “The wine industry is the last industry that hasn’t been changed by the internet,” Mabray says. “If you look at hotels with expedia.com or restaurants with Yelp or Open Table, that hasn’t happened yet.”

    A key facet of Vintank is its use of the freemium business model in offering a basic service for free; a common practice in the consumer (B2C) market but fairly rare in business (B2C) software services.

    “It’s a very different way to do freemium in B2B. Freemium in B2C you do mass adoption — that tiny fraction that pay makes it profitable because so many people have it.”

    “In the B2B freemium model what you have to do is distribute it for free and then you measure the usage; who is using it the most is where you send the sales team in.”

    For Mabray, we’re in early days of using digital media and the wine industry is one of the sectors that needs to adopt the technologies quickly: “The driver for me is this horribly complex problem that needs to be solved — the wine industry needs digital to survive.”

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  • TVs unchanging face

    TVs unchanging face

    In the wake of Apple’s big announcements this week, CEO Tim Cook has an interview with US talk show host Charlie Rose about the company and its strategy.

    One of the notable views in the clips that have been released so far is how Cook sees television being stuck in the 1970s.

    Apple has been trying to reinvent TV for nearly a decade and, despite consumers watching more content on their computers, the television industry’s revenues continue to stand up.

    Cook’s almost certainly right that television is moribund, but it’s a medium that for the moment seems resistant to disruption.

    How long television can stave off change might be one of the defining questions of the entertainment industry.

     

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