I thought this one worth a quick blog entry for, especially as it’s one of the industries dirty little, but well known secrets. I’ve been a unwilling shill a few times. After a while it gets much easier to spot them.
As part of the app store/walled garden debate that kicked off after my Q&A with George Conoly, co-counder and CEO of Forrester Research, I’ve been staying late working on some HTML5 related topics and technologies. Especially as they relate to mobile devices. One topic that has been really interesting is QR codes and how perhaps we might use them in servers. There was, much to my surprise already a project running to use them. I’ve been looking at dynamically generating them, possibly for use in error codes, and maintenance, service calls, etc.
One of the follow-ons from this was the use of Near Field Communication (NFC). Ostentatiously, NFC is being punted by the industry for mobile payments. It’s much more interesting to me though to use for the initiation of mobile, wireless connectivity, via say, Bluetooth. Anyway, just as I was scanning my tweetstream for today before I left, I spotted an @techmeme tweet “PayPal is top brand for mobile payments: survey (@georginius / Reuters)http://reut.rs/iFJ36T http://techme.me/BXW= ”
This immediately struck me as nonsense. Linking PayPal to NFC, how so? Surely, the whole point of NFC is that you have a device, the device or an app on the device(possibly HTML5 based) is used to charge for something, a micro-purchase, coffee, sandwhich, MP3, or similar bypassing the typical website switch and charge service provided by PayPal.
Thus, rather than PayPal benefiting from NFC, they actually have the most to lose and need to be as proactive as they can to ensure they are infact not dis-intermediated in the upcoming NFC payments boom. What happens is that the NFC device micro-/payment is charged to the account associated to the device, or a credit card registered to the device owner. There are some obvious and some legal issues with this. Some countries are bound to have laws that restrict telco’s and wireless carriers business, ie. not allowing them to become banks. So rather than the carrier consuming the charge from the NFC device aka smart/cellphone, the charge is passed on to a credit card registered to the device owner. And, this is where, from reading after seeing the tweet, PayPal want in on the act.
Now, theres the obvious issue of the device falling into the hands of an unauthorized 3rd party, but thats a whole different post. The point of this post was there was nowhere in this process where we needed PayPal, unless I’ve misunderstood. PayPal need to be an early wave adopter, or they risk being cut-out completely.
I went and chased down the survey qouted by Reuters. Low and behold, survey by market research firm GfK suggests that PayPal, the eBay-owned online payment system, “could be set for a major boost as mobile payment systems start to take off over the next year”. The GfK survey was of course funded by, err, PayPal. The Reuters piece then goes on to discuss NFC.
If in fact NFC is used as I posit above, this is typical bait and switch type press release, where you create confusion by associating yourself in a positive light with something that is in fact a weakness. It’s done all the time, you make sure you ask the questions that get the answers you want, especially when you are paying the people asking the questions.
Now, it could be I’m completely wrong on this. Maybe someone from PayPal or GfK would like to send me a copy of the survey? It looks though like Reuters fell for the press release, hook, line and sub-editor. Their carrying the release has meant it’s gone “viral” and as George Bush might have said, “job done!”.