Global Networks: eBay

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4:35 pm

Amazon’s Apple Watch App Will Let You Shop From Your Wrist

(GNN) - Though online retailer Amazon wasn’t among one of the many applications Apple introduced this week as coming soon to its new wearable device, the Apple Watch, the company does have an Apple Watch version of its mobile shopping app in the works, we understand.

The shopping app will allow consumers to search for products and even buy them from their wrist using Amazon’s 1-Click ordering system.

Of course, it’s not surprising that Amazon will

address the forthcoming mobile platform – after all, the company tends to release a version of its shopping app on almost any viable mobile or connected platform, not just its own Kindle hardware. And it already has an Android Wear (i.e., smartwatch) version of its shopping app in the wild, so it makes sense that it would build the Apple Watch counterpart, too.

In fact, our understanding is that the Apple Watch version of the Amazon shopping app will operate just like the current Amazon app for Android Wear. That means it will support the ability to search for items using your voice, save products to your Amazon Wishlist, and even the ability to check out quickly using Amazon’s 1-Click ordering. (Oh, this could be dangerous, I think.)

The retailer, however, is not officially confirming the details around its new Apple Watch app at this time, but instead is only hinting that such a thing is in the works. A company spokesperson told us the only statement they’re offering for now is as follows:

“Amazon is constantly innovating on behalf of our customers. We are committed to being anywhere customers want to shop. That includes watches. We have an Amazon shopping app for Android Wear and will look to expand to other devices.”

“Other devices” essentially confirms Amazon’s plans to release an Apple Watch app, if you read between the lines, of course.

(Note: Above image is a mock-up.)

7:48 pm

When Payment Processing Becomes A Commodity

#GNN - #Editor’s note: Christoffer O. Hernæs is partner at Core Group, a Norwegian management consulting company. Christoffer is currently engaged by Sparebank1, one of Norway’s largest financial institutions; this analysis is based on public sources and is not connected to any client engagements.

One of the big subjects of discussion in the banking industry earlier this year was the publication of the Millennial Disruption Index, stating that millennials view banks as irrelevant and placing traditional retail banking at the highest risk of disruption compared to other B2C industries. Accenture’s Banking 2020 report confirms this and draws a parallel to the challenges the telecom industry faced 20 years ago and states that non-banks will take a third of incumbent banks revenues by 2020.

With the rise of mobile wallets, peer-to-peer payment, micro lending and various personal finance tools, the banking industry faces a new breed of competitors from the technology industry. Notable examples include eBay which has been in the payment space for a long time with PayPal, and is now strengthening its foothold in mobile payment by integrating Apples fingerprint reader into PayPal.

Google has tried entering the payment space with the discontinued Google Checkout and Google Wallet. Amazon is targeting the mobile payment space through acquisition of GoPago, as well as challenging Square with a planned launch of a similar payment processing solution. Facebook, on the other hand, is targeting the $500+ billion global remittance market.

The common denominator for the challengers is that the majority of the companies are targeting the payment processing space. Both Bank of America and Capital One say not to worry, since this is old news and it only disrupts the peripherals of the banking value chain. But the real implication as with any form of value chain disruption is the probability of payment processing becoming a commodity.

A catalyst for a commoditization of payment processing is the introduction of cryptocurrencies and new payment protocols like bitcoin and Ripple, which renders clearing obsolete and dramatically lowers the transaction cost for merchants. As a comparison, the transaction cost for payments through Visa/Mastercard/PayPal is ranging between 3-5 percent depending on the transaction size. The transaction cost for bitcoin on the other side is as low as 1 percent with continuing efforts to reduce transaction fees from the bitcoin community.

To accelerate the development Bitpay recently announced removed the transaction fees on the starter plan, offering free unlimited payment processing to merchants accepting BitCoin. With eBay considering integrating bitcoin into PayPal and Apple reentering bitcoin wallets like Blockchain into the App Store cryptocurrencies as a default payment method becomes an alluring option for profit-seeking merchants looking for cost effective solutions. This places the challengers in a sweet spot somewhere between the banking and the retail industries through digital wallets and disruptive payment platforms.

A commoditization of payment processing will require new business models where cash no longer is king, but analysis of the information gathered through transactions is the new competitive advantage in the digital payment processing space. Ovum’s report, “Loyalty and Location Based Payment Services” predicts that loyalty and analytics is the primary growth driver for mobile payments. It states that this will require new partnerships between payment providers, merchants and third-party analytics vendors like Oracle and IBM, where the latter already has entered a partnership with Monitise in order to deliver cloud-based mobile solutions for the financial services industry.

Starbucks is one example of the business potential in combining loyalty programs and payments and reports that mobile payments stands for over 15 percent of U.S. sales from the third quarter, and is considering selling its software to other merchants.

These changes to combined with increasing sector complexity due to industry convergence, capital requirement regulations, industry consolidation and diminishing ROE (Return of Equity) compared to before the financial crisis poses great challenges for banks in the years to come and creates a perfect storm seemingly favoring new entrants and the technology industry’s inherent ability to experiment and willingness to try and fail.

Despite an entrepreneurial spirit and independence from antiquated legacy systems, barriers to entry are rising. Glen Fossella states in an interview with American Banker that regulatory complexity and compliance demands will become such a growing burden for new entrants, that it is both faster and cheaper for incumbents to acquire or partner with startups. Square learned this the hard way and was fined $507,000 in Florida for operating without a license. He also advises banks to invest in startups, acquire and hire entrepreneurs or hire talent from technology companies.

The leading example when it comes to preparing for the rise of digital payments is Visa. Visa CEO Charles W. Scharf stated that the leading payment network is counting on new digital services to power future growth, although Visa presented an 11 percent rise in third-quarter earnings from global payments. One of these initiatives is the creation of Visa Digital Solutions with a wide array of offerings.

This includes the launch of Visa Checkout, the successor to V.me, Visa Cloud Payment Solutions and, more exciting, the tokenization service that substitutes traditional credit card numbers with a digital token. Visa also opens up for collaboration with developers and technology companies with these new services. In addition Visa revealed an investment in LoopPay, a mobile payments solution accepted at the majority of point-of-sale terminals.

Through these initiatives, Visa sets a leading example for incumbents in the payment ecosystem by showing a try-and-fail mentality, as well as long-term commitment through repeated mobile wallet initiatives, willingness to invest in promising startups as well as collaborating with partners to encourage open innovation. Banks and financial institutions should view Visa as a leading example in order to secure a position in the digital payment ecosystem.

And let’s face it. A bank will never be viewed as cool for the millennial generation. But banks represent safety for the consumer, and it is possible to make banking somewhat less boring through adapting new technology and acquiring new innovations.

IMAGE BY SHUTTERSTOCK USER PETR KOPKA (IMAGE HAS BEEN MODIFIED)

12:20 pm

For Its First #Google Glass Effort, #EBay #Adapts Its RedLaser #Product Finder #App

GNN - Back in March 2013, eBay said it would start to work on applications for Google Glass — the idea being that the Android-powered, head-mounted computer could help consumers shop for things online and in the real world more seamlessly than pulling out your smartphone (and even less so, a full-fledged computer).

Now over a year later, the e-commerce giant is rolling out its first effort: a Glass-optimized version of its RedLaser barcode scanning app, where people can search for products online and locally, activated using voice and image recognition. Glassers can download the app here.

The project comes out of the innovation and new ventures labs at eBay, which VP Steve Yankovich describes as focused “moonshots around the idea of zero-effort commerce,” by which he means new services that reduce (or even remove altogether) the clicks you need to make a purchase.

There have been a number of other Glass apps announced that play around with idea of using the head-borne device for commerce. One called Eaze that lets a user “nod to pay” to complete a transaction even claims to have piqued the interest of eBay subsidiary PayPal.

But the significance of having a commerce giant like eBay dabbling in the new technology is a signal to the market. Glass might still be a very nascent concept (only around 10,000 units are out in the wild, and even those have not been universally embraced, and even mocked by some).

This is a sign of how it’s catching the attention of the biggest players who think that it and other wearables (including ways of connecting your own glasses) will be a part of how commerce services will be developed and used in the future.

RedLaser, as you might recall, is a barcode scanning app for smartphones that was a part of eBay’s acquisition of a startup called Occipital in 2010. It then got further bolstered with location-specific search by way of another eBay acquisition, Milo.

RedLaser already has apps for iPhone, Android and Windows Phone. eBay does not disclose how many users RedLaser has amassed to date but its focus on applications beyond its basic website is reflected in how consumers are using eBay. The company reported during its Q2 results this month that 59% of eBay customers shopped across multiple screens.

While there is always something exciting about looking at cutting edge, new technology, there is also a very practical business purpose here.

“What we found with mobile is that any time you reduced friction you increased transactions,” Yankovich told me in an interview. This is where wearables, which are even more naturally on your person than a smartphone, come into play. “Every time a wearable shows up, we have to look at it,” he says, even if it’s something that is new and may not fly as a mass market product. “You don’t even know whether this will be a tool for commerce but we have to try.”

The RedLaser Google Glass app has two components to it: the first is that a user can find a product simply by saying the name of it after activating the RedLaser app. (“OK Glass. Find a product.”)

The other, likely more precise route, is to command Glass to scan a barcode of a product in front of you. (OK Glass. Scan a barcode.”) Then, like the other RedLaser apps, this triggers a listing of other places nearby where you can buy the product, or a listing for how to find it online.

For now, there is no direct purchasing features on the RedLaser Glass app. In fact, there is little in the way of any profit elements to these commerce apps. A spokesperson tells me there will be an extension of some of the existing RedLaser relationships to Glass. (For example, BestBuy works with eBay to create special in-store experiences on RedLaser, and that will extend to Glass.)

Yankovich — who calls payments “the holy grail” of commerce technology — says that this will be a step in the future, but not for now.

“The most difficult part of payments is that RedLaser is agnostic in this regard,” he says. “We send users to retailers regardless of what payment options there are.” And apart from that there are the same issues that face other kinds of mobile payments: “duct tape” legacy infrastructure for retailers, and question marks over what really would be the easiest and safest thing for a consumer to use. “Will consumers touch their frames? Will they say something? You still have to wonder what people will actually want to do.”

Payments is one direction these new apps for wearables will go; but another is simply in how they become more sophisticated in other regards. Yankovich hints that one area eBay is looking closely at is image recognition.

“It will be harder to pull off image recognition in that the camera capability now is not good enough,” he says. “But that might be the next step. There will be improved hardware soon and that will spur some kind of evolution and we’ll react to it. We will take advantage of these products.”