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Apple is already building their next massive business, and no one seems to have noticed.
1. Geo-fencing already does exist and allows advertising that can be specifically targeted to a desired area (for example, near a store.) I own Singtel, which owns large mobile ad firm Amobee (http://www.amobee.com/technology/geofencing.shtml)
"Geo-Fencing is a technology that allows an advertiser to select a geographic point using latitude and longitude information and then to create a virtual "fence" around that point of a given radius.
For example, an advertiser can pinpoint a bank branch office, then deliver a specific ad to anyone who comes within a 200 meter radius of that branch.
Ads delivered through geo-fencing typically yield higher conversions and better ROI for advertisers since they're highly contextual. It's akin to being able to display a "special offer" sign across a dozen city blocks instantly, and only show it to the consumers you actually want to reach."
I've always thought that was incredibly neat and has great potential. So, why am I not offered a drink deal when walking by Walgreens or CVS in the Summer, or a shoe deal when walking by Foot Locker, or whatever? Why am I not told in the grocery store that they think I'd like a deal on soda (I drink enough Diet Coke) a couple of aisles over?
I think it's for the same reason that it has taken forever for retail to upgrade point-of-sale systems to accept EMV chip cards. The US has not upgraded to EMV credit cards while the rest of the world has - and only after things like the Target incident are companies coming around to it. The reason, I believe, is money. They don't want to spend the $.
Going back to the discussion on this forum about the Howard Schultz/Starbucks statement on the state of retail, I think there are going to be retailers who put this tech to use and evolve with their customers and the technology and those that do not.
A fair amount of retailers I think will eventually do away with the check-out area entirely and have people walking around with IPads and other devices that will be used as check-out. The space with all of the cash registers will be empty and that will free up more space for the store to display products.
I use mobile payments to pay with my phone when the point-of-sale system allows it. People at the store always go, "That's so cool!" Then I ask if they've seen anyone else use it: "No" or "Not Really" or "Once, I think?"
It's so simple, so easy and has so much potential. I've long said that I see a time when I walk by an advertisement, scan it with my phone to pick up a coupon and then go to a store and scan my phone at check-out and it uses my loyalty card, the coupon and pays, all in one swipe.
The act of paying with your phone is simple and rather fun. You pay, your phone beeps and you go. The problem is that you've had consumers confused by which wallet and where. Google Wallet? Isis? The upcoming MCX (Merchant Customer Exchange) is going to be another option. All of the different Wallet options have created confusion and not enough retailers have point-of-sale equipped.
In terms of beacons, Qualcomm is already using them in a Stadium - if you're in a line, it will let you know that the concession line in another section nearby has a smaller line, etc. The potential beyond retail for things like this is enormous.
I just think the credit card companies just see more and more volume as people move more and more from cash to electronic purchases. Google Wallet uses a Mastercard when you make a payment, then charges your card, so in a way it's more secure - your card is not the one being used at point-of-sale, it's a MC, then you get charged later.
With new advances that were approved the other day, it has become easier for more phones to support mobile payments (http://recode.net/2014/02/19/how-your-banks-app-may-someday-replace-your-wallet-thanks-to-mastercard-and-visa/.) I think the "cloud" aspect of storage rather than on in-phone secure card is a little concerning, but it looks like its happening, so it becomes who is providing the cloud data service for all of this? Akamai, Google, someone else?
"Since the payment data transferred in an NFC transaction previously had to come from the phone’s hardware secure element, a mobile carrier could decline any given app from using that data.
For example, Google Wallet’s tap-to-pay feature using NFC isn’t available on the vast majority of phones running on Verizon, AT&T and T-Mobile networks. That’s widely believed to be the result, at least in part, of the fact that those three carriers are the backers of a competitive app called the ISIS Wallet.
But with HCE (Host Card Emulation), phones can bypass those carrier restrictions; an app can access and present the payment card information for an NFC payment from the cloud, which mobile carriers do not control. But the only way a purchase using HCE and NFC could take place is if the credit companies allowed the payment card details to be stored in the cloud. In short, HCE needed their stamp of approval. Wednesday’s confirmation that MasterCard and Visa are certifying this new payments approach is a pretty big deal."
Companies that I think are somewhat more low-key plays on this are the financial tech companies - FIS and Fiserv. The former I particularly like (and it is the one that pays a div), and it recently partnered with Homeland Security. " FIS™ (NYSE: FIS), the world’s largest provider of banking and payments technology, has reached an agreement with the Department of Homeland Security (DHS) as a cybersecurity research partner. Under the partnership, which is intended to improve the security of financial transactions worldwide, FIS will collaborate with DHS and the U.S. federal government to address and respond to cyber threats to the global financial industry and critical infrastructure." (http://www.fisglobal.com/C026000)
"FIS processes more than 27 billion transactions every year. In 2012, FIS moved more than $5.5 trillion across the globe."
FIS and Fiserv provide essential technology to the banking and retail industry and I think are going to be somewhat less volatile over time due to a significant portion of their revenue revolving around providing essential services to the financial industry. Both also offer a wide and diverse variety of services to the financial industry. But you have effectively a major industry - financial tech - that is dominated by two names.
A volatile choice to play the upgrade in retail technology is Ingenico. They are the largest point-of-sale terminal company. The French company has an ADR on the US market that trades lightly. If you believe that companies will have to upgrade en masse in the US - whether to point-of-sale EMV terminals or special covers that can turn an IPad into a terminal with a printer - then Ingenico is something to consider. However, in a downturn it's going to go down significantly. The point-of-sale terminal industry is also dominated by a few names - Ingenico, Verifone, NCR - but there are newcomers (Square.) Groupon and Paypal worked with Ingenico on projects.
All of this is - to me - becomes part of the next evolution of the mobile phone. Everyone is going to have a phone, it becomes how does the way they allow us to interact with the world evolve? I think it's going to take a while, but the potential is exciting.
Scott, I had read something recently how Apple's iBeacon will leapfrog NFC. Retailers would have lower costs and like you said, the checkout lines would be eliminated. A grown mans dream. If I can find that article I will link it.
Further down in the article it goes into some detail about retailer startup costs with iBeacon versus NFC using a Macys store as an example.
I look forward to this system. I would need a new 5s iphone though.
I think the whole system is going to change and change for the better - it has to, I think, as part of a necessary revolution in the retail experience.
I'm excited about the theme and a number of companies within it - I think Apple, however, is the one that stands to do particularly well because the expectations aren't there. The company has an enormous amount of potential and an enormous amount of cash - they are going to excite investors when they move beyond "IPhone 7, 8, 9....", but they are taking their sweet time doing so.
It'll all take time, retail will be slow to change, there will be confusion over which digital wallet to use - I tried to use my Google Wallet this weekend at a soda machine and that particular soda machine only accepted the Isis digital wallet, but the soda machine next to it accepted Google Wallet. However, once the confusion over the technology works itself out and retailers start signing on, I still think the idea that you can store coupons, rewards programs and payment in a phone and have all of those be processed in one swipe at check-out is going to be popular. With beacons and other advances, stores will probably know when you arrive and suggest sales based on your past purchases. If you're walking by, you could be offered a deal to stop in.
Beyond that, there's also the move from mag stripe credit cards to EMV cards, which are widely available in most countries aside from this one.
Comments
1. Geo-fencing already does exist and allows advertising that can be specifically targeted to a desired area (for example, near a store.) I own Singtel, which owns large mobile ad firm Amobee (http://www.amobee.com/technology/geofencing.shtml)
"Geo-Fencing is a technology that allows an advertiser to select a geographic point using latitude and longitude information and then to create a virtual "fence" around that point of a given radius.
For example, an advertiser can pinpoint a bank branch office, then deliver a specific ad to anyone who comes within a 200 meter radius of that branch.
Ads delivered through geo-fencing typically yield higher conversions and better ROI for advertisers since they're highly contextual. It's akin to being able to display a "special offer" sign across a dozen city blocks instantly, and only show it to the consumers you actually want to reach."
I've always thought that was incredibly neat and has great potential. So, why am I not offered a drink deal when walking by Walgreens or CVS in the Summer, or a shoe deal when walking by Foot Locker, or whatever? Why am I not told in the grocery store that they think I'd like a deal on soda (I drink enough Diet Coke) a couple of aisles over?
I think it's for the same reason that it has taken forever for retail to upgrade point-of-sale systems to accept EMV chip cards. The US has not upgraded to EMV credit cards while the rest of the world has - and only after things like the Target incident are companies coming around to it. The reason, I believe, is money. They don't want to spend the $.
Going back to the discussion on this forum about the Howard Schultz/Starbucks statement on the state of retail, I think there are going to be retailers who put this tech to use and evolve with their customers and the technology and those that do not.
A fair amount of retailers I think will eventually do away with the check-out area entirely and have people walking around with IPads and other devices that will be used as check-out. The space with all of the cash registers will be empty and that will free up more space for the store to display products.
I use mobile payments to pay with my phone when the point-of-sale system allows it. People at the store always go, "That's so cool!" Then I ask if they've seen anyone else use it: "No" or "Not Really" or "Once, I think?"
It's so simple, so easy and has so much potential. I've long said that I see a time when I walk by an advertisement, scan it with my phone to pick up a coupon and then go to a store and scan my phone at check-out and it uses my loyalty card, the coupon and pays, all in one swipe.
The act of paying with your phone is simple and rather fun. You pay, your phone beeps and you go. The problem is that you've had consumers confused by which wallet and where. Google Wallet? Isis? The upcoming MCX (Merchant Customer Exchange) is going to be another option. All of the different Wallet options have created confusion and not enough retailers have point-of-sale equipped.
In terms of adding to the confusion, Paypal and Samsung are reportedly working together: http://bgr.com/2014/02/19/samsung-paypal-mobile-payment-solution/
In terms of beacons, Qualcomm is already using them in a Stadium - if you're in a line, it will let you know that the concession line in another section nearby has a smaller line, etc. The potential beyond retail for things like this is enormous.
http://gigaom.com/2013/12/09/step-aside-ibeacon-qualcomm-has-low-cost-gimbal-proximity-beacons/
http://www.techradar.com/us/news/portable-devices/other-devices/qualcomm-s-proximity-beacon-takes-tracking-people-to-next-level-1177945
http://www.miamidolphins.com/news/article-1/Sun-Life-Stadium-Gets-First-Look-At-Qualcomm-Beacon-Technology/dbb500e4-79cf-4aea-8b30-5668d619f701
I just think the credit card companies just see more and more volume as people move more and more from cash to electronic purchases. Google Wallet uses a Mastercard when you make a payment, then charges your card, so in a way it's more secure - your card is not the one being used at point-of-sale, it's a MC, then you get charged later.
With new advances that were approved the other day, it has become easier for more phones to support mobile payments (http://recode.net/2014/02/19/how-your-banks-app-may-someday-replace-your-wallet-thanks-to-mastercard-and-visa/.) I think the "cloud" aspect of storage rather than on in-phone secure card is a little concerning, but it looks like its happening, so it becomes who is providing the cloud data service for all of this? Akamai, Google, someone else?
"Since the payment data transferred in an NFC transaction previously had to come from the phone’s hardware secure element, a mobile carrier could decline any given app from using that data.
For example, Google Wallet’s tap-to-pay feature using NFC isn’t available on the vast majority of phones running on Verizon, AT&T and T-Mobile networks. That’s widely believed to be the result, at least in part, of the fact that those three carriers are the backers of a competitive app called the ISIS Wallet.
But with HCE (Host Card Emulation), phones can bypass those carrier restrictions; an app can access and present the payment card information for an NFC payment from the cloud, which mobile carriers do not control. But the only way a purchase using HCE and NFC could take place is if the credit companies allowed the payment card details to be stored in the cloud. In short, HCE needed their stamp of approval. Wednesday’s confirmation that MasterCard and Visa are certifying this new payments approach is a pretty big deal."
Companies that I think are somewhat more low-key plays on this are the financial tech companies - FIS and Fiserv. The former I particularly like (and it is the one that pays a div), and it recently partnered with Homeland Security. " FIS™ (NYSE: FIS), the world’s largest provider of banking and payments technology, has reached an agreement with the Department of Homeland Security (DHS) as a cybersecurity research partner. Under the partnership, which is intended to improve the security of financial transactions worldwide, FIS will collaborate with DHS and the U.S. federal government to address and respond to cyber threats to the global financial industry and critical infrastructure." (http://www.fisglobal.com/C026000)
"FIS processes more than 27 billion transactions every year.
In 2012, FIS moved more than $5.5 trillion across the globe."
FIS and Fiserv provide essential technology to the banking and retail industry and I think are going to be somewhat less volatile over time due to a significant portion of their revenue revolving around providing essential services to the financial industry. Both also offer a wide and diverse variety of services to the financial industry. But you have effectively a major industry - financial tech - that is dominated by two names.
A volatile choice to play the upgrade in retail technology is Ingenico. They are the largest point-of-sale terminal company. The French company has an ADR on the US market that trades lightly. If you believe that companies will have to upgrade en masse in the US - whether to point-of-sale EMV terminals or special covers that can turn an IPad into a terminal with a printer - then Ingenico is something to consider. However, in a downturn it's going to go down significantly. The point-of-sale terminal industry is also dominated by a few names - Ingenico, Verifone, NCR - but there are newcomers (Square.) Groupon and Paypal worked with Ingenico on projects.
All of this is - to me - becomes part of the next evolution of the mobile phone. Everyone is going to have a phone, it becomes how does the way they allow us to interact with the world evolve? I think it's going to take a while, but the potential is exciting.
http://www.macworld.co.uk/news/apple/apple-ibeacon-mobile-payments-3469042/
Further down in the article it goes into some detail about retailer startup costs with iBeacon versus NFC using a Macys store as an example.
I look forward to this system. I would need a new 5s iphone though.
I think the whole system is going to change and change for the better - it has to, I think, as part of a necessary revolution in the retail experience.
I'm excited about the theme and a number of companies within it - I think Apple, however, is the one that stands to do particularly well because the expectations aren't there. The company has an enormous amount of potential and an enormous amount of cash - they are going to excite investors when they move beyond "IPhone 7, 8, 9....", but they are taking their sweet time doing so.
It'll all take time, retail will be slow to change, there will be confusion over which digital wallet to use - I tried to use my Google Wallet this weekend at a soda machine and that particular soda machine only accepted the Isis digital wallet, but the soda machine next to it accepted Google Wallet. However, once the confusion over the technology works itself out and retailers start signing on, I still think the idea that you can store coupons, rewards programs and payment in a phone and have all of those be processed in one swipe at check-out is going to be popular. With beacons and other advances, stores will probably know when you arrive and suggest sales based on your past purchases. If you're walking by, you could be offered a deal to stop in.
Beyond that, there's also the move from mag stripe credit cards to EMV cards, which are widely available in most countries aside from this one.