Saturday, 25 October 2014

The technology of nfc payment hits practical buffers again

Apple Pay is the revolution that NFC was waiting for. Google had Google Wallet and Microsoft had a wallet. However neither set the world on fire.

Google, despite its impact on the online world, was unable to get buy in to its wallet solution. It had some success with a small number of retailers using the technology but the main problem was the market itself. Each bank wanted its own solution, as did MasterCard, Visa and PayPal. In addition the USA still used swipe terminals and signature checks to process payments. This 40 year old process had been replaced by smarter secure 'chip and pin' almost everywhere else on the planet.

Google wallet in action can be seen here. You can't but help notice that the video dates back a few years. Wallet never made it out of the USA because the banks didn't want to give Google a slice of the pie.

Microsoft announced their own Windowsphone wallet in 2012. It wanted to reassure customers that using mobile payments was safe. So it added two barriers to adoption. Firstly you had to use a credit card, debit card or voucher card that supported wallet. Secondly you needed a special 'secure sim' which almost no phone service in the world had or planned to have except a small experiment by Orange in France. Two years on the inevitable result is that no-one is using the Microsoft Wallet.

So Apple have now rolled up with Apple Pay. The unique security propositions is that the payment is made via the transmission of a single use token via NFC. Your credit card or debit card number is never held by the retailer. The phone is secured by a fingerprint reader. Apple kicked off with a long list of retail and banking partners. Surely now a technology company had hit the ground running with an NFC payment system that means you can leave your wallet at home.

Almost. In the first day allegations that Apple Pay was double-debiting cards and causing payments to be made twice. This weekend one of the largest US pharmacies called CVS seems to have switched off NFC all together to stop all touch payments. There is some reporting that CVS pharmacy and a number of other US retailers want into the payments party and want to use their own network. All of them realise the winner in the mobile payments space will make millions. The result of all this competition is that the consumer may be faced with an array on incompatible payment systems for mobile. The only obvious way out may be to use cash. This is where capitalism and greed disadvantage progress and the consumer. Like a mafia boss all these corporations want a percentage of the transaction fees.

Friday, 17 October 2014

Apple matures their own market

In a relatively small venue yesterday Apple announced a new set of iPads that improved their screens, introduced new models and, perhaps most significantly, added fingerprint recognition. If you are inclined to be an Apple fan then probably a good source in the UK media is the Guardian. The Guardian is always subtle in that it tries to appear 'independent' but always seems more positive than the technology warrants. For a more comprehensive view you can look at the supersite for Windows. The supersite is definitely favourable to Microsoft but the site has favourably reviewed competing technologies.

You can watch the whole Apple event by following this link.

The key thing for me is that Apple is now in the position of not disrupting the market but rather adapting to being the establishment. Apple coined the phrase "think different" to describe the way an Apple Mac user was challenging the Microsoft monopoly in the PC market. Right now Microsoft is not a monopoly in mobile and owners of the Windowsphone can legitimately become the owners of the phrase "think different" facing an Android/IOS duopoly.

In the USA and the wealthy west Apple products do have a certain fashion kudos. It's no surprise that this week the Apple Watch was featured on a Vogue model.

Apple created the modern touch based smartphone market in 2007. It created the modern tablet market. It's not possible to say Apple invented smartphones or tablets. My 2003 HP TC1100c tablet PC ran Windows XP tablet edition but was a 'PC'. So in part the innovation part of the conversation is also about definition however Apple have been significant in creating markets. The central point is that Apple is the established player in the luxury end of the market. The majority of the market is now being taken by Android and the Google ecosystem.

By not producing a cheaper iPad, a cheaper iPhone and a mass market PC Apple is saying they are comfortable with being exclusive. New CEO Tim Cook is changing the company to be the incumbent rather than the young upstart. Cook's innovation using Apple's fashion credentials to to create a payment system with Apple Pay that is much more usable by consumers.

For me the new iPads are not so much about the technology but rather a definite marker, along with the recent iPhone 6 launch, that Apple is now the establishment.

Monday, 6 October 2014


One of the talking points in IT today is 'ecosystems'. What is meant by this is that if you have an Android mobile phone you are pretty much going to use Google Mail, Google Maps, Google Search and the Google Play Store. Similarly if you use IOS devices then you are in the Apple 'Itunes' universe. If you use Blackberry or Windowsphone you end up buying goods and services there.

In years before the 'mobile revolution' the ecosystem was more simply described as 'lock in'. Up and coming products would tout openness and interoperability. Established players would be trying to keep consumers by making it more difficult to leave. Apple is a good example. The first Apple computer was built with standard components based around adding adaptors to increase functionality. The Mac was a closed environment in which upgrades were only possible from Apple dealers and, latterly, the Apple Store. They even added proprietary screws on their PCs and lots of glue to make maintenance and upgrades next to impossible. IBM PCs were so open it spawned a whole clone industry. By 1987 IBM decided to change the design so that only approved add-in cards could be used. This was called microchannel architecture. The industry rebelled and the clones won leaving IBM to retreat from the PC business.

Microsoft was criticised in the past because it had a virtual monopoly on PC operating systems and having a closed environment in which Microsoft were gatekeepers.

Standing against this business model were people such as Richard Stallman, who is best known for the Free Software Foundation and GNU. He believes all software should be free, source code published and people should be free to modify code as they see fit. Open software advocates see lock-in and manufacturer based ecosystems as being absolutely against this. These days although Linux fans tout the openness of their system the most popular version by use is Android on mobile devices. So there is some irony that the mobile implementation is dominated by Google and the Google ecosystem locking consumers into a particular experience mandated by Google on manufacturers that want to use Google services. So in the Android world, despite its 'open' origins, it is now a closed ecosystem.

Microsoft do champion Windowsphone. I have a Lumia 1020. However there is an irony that Microsoft produces apps for Windowsphone, Android and iPhone meaning that Microsoft's ecosystem is available on all popular mobile platforms. Microsoft was always criticised and, in some instances, hated by open source advocates now finds itself as a cross-platform service provider in the most open ecosystem.

Funny old world.