Google is about advertising and influencing the purchasing process. This is where their value is and where they create their revenues. Android is and will be critical in advertising and purchasing decisions considering the smartphones increased importance in the retail environment and the growth of m-commerce. First and foremost this deal was about patent protection, protection of Android and protection of future revenues.
Google was facing pressures from Microsoft who were exacting a tax on their Android partners for Microsoft patents, charging HTC $5 per Android handset and possibly charging Samsung as much as $15 per Android handset. Google needed the patents to handle these and other patent infringement issues that have come up in Europe, as well as future patent infringement issues.
Google has to manage the Motorola relationship with a hand off approach and sell the manufacturing capabilities if it creates conflict with its other Android partners. In the end Google wants to promote overall adoption of Android to promote its position in search, advertising and purchasing.
Google wants to be a major part of the customer’s purchasing process and has all of the pieces: Google Deals, Google Places, Google + and Google Wallet. All of these are not major players in their perspective areas, but put together with support of discounts to create loyalty and a good user experience, these services can create a strong consumer pull. Google Wallet is an important component of this strategy. Having an OEM to install NFC chips and Google Wallet will give the company the distribution relationships to create momentum in the market. The Nexus handset and only one carrier’s support (Sprint) is not likely enough to create momentum. With Motorola Google can try an end run around ISIS and also gain some international acceptance of Google Wallet in countries where carriers do not have as strong a distribution position as the US.
Much of Google’s future as the center of consumer buying experience on the smartphone is riding on Android and it had to protect its position in this very competitive smartphone market.
Tuesday, August 16, 2011
Wednesday, August 10, 2011
US EMV is a no brainer for Visa
On August 9th, 2011 Visa announced plans to accelerate the migration of EMV contact and contactless payments in the US. With this move Visa aims to be at the center of the US consumer buying experience. The solution has three main steps:
The company is expanding its Technology Innovation Program (TIP) to eliminate the merchant requirement to annually validate their compliance with the PCI Data Security Standards. To qualify merchants must have at least 75% of their Visa transactions originate from the chip-enabled terminal. The terminals must have both contact and contactless chip acceptance including mobile contactless payment. This is designed as an incentive to increase security and NFC (Near Field Communication) capability.
Visa’s U.S. acquirer processors and sub-processors service providers will be required to support merchant acceptance of chip transactions no later than April 1, 2013. This will require service providers to carry and process additional data associated with the chip transaction.
Visa intents to shift domestic and cross-border counterfeit card-present point-of-sale (POS) transactions effective October 1, 2015 and for fuel-selling merchants October 1, 2017. This is for merchants who have not adopted at minimum, contact chip terminals.
EMV will improve security by not allowing stolen cards to be used via dynamic authentication, preventing cloning of cards which can be done via magnetic stripes, and minimizing the attractiveness of hacker attacks on databases which store credit card information. Without the capability of cloning hackers will have less incentive to hack data bases for credit card information.
The other play is to increase usage of mobile payments. Visa plans to use mobile as a way to provide enhanced services and create loyalty. Visa can use the smartphone to be at the center of the customer’s payment and money transfer experience. Visa will also use smartphones to create customer specific ads and coupons to increase purchasing and card loyalty.
US EMV is a no brainer for Visa as it will:
- Reduce fraud via stolen credit cards and hackers
- Increase their customer loyalty and value via customer discounts presented on smartphones (making them more important in the customer buying cycle)
- Make it easier for U.S. cardholder to use their Visa cards overseas
- Increase efficiencies with one main POS system around the world
- Make other smartphone transactions like remittance and peer to peer payment more acceptable as customer will have experience using the smartphone to pay for goods and services
The company is expanding its Technology Innovation Program (TIP) to eliminate the merchant requirement to annually validate their compliance with the PCI Data Security Standards. To qualify merchants must have at least 75% of their Visa transactions originate from the chip-enabled terminal. The terminals must have both contact and contactless chip acceptance including mobile contactless payment. This is designed as an incentive to increase security and NFC (Near Field Communication) capability.
Visa’s U.S. acquirer processors and sub-processors service providers will be required to support merchant acceptance of chip transactions no later than April 1, 2013. This will require service providers to carry and process additional data associated with the chip transaction.
Visa intents to shift domestic and cross-border counterfeit card-present point-of-sale (POS) transactions effective October 1, 2015 and for fuel-selling merchants October 1, 2017. This is for merchants who have not adopted at minimum, contact chip terminals.
EMV will improve security by not allowing stolen cards to be used via dynamic authentication, preventing cloning of cards which can be done via magnetic stripes, and minimizing the attractiveness of hacker attacks on databases which store credit card information. Without the capability of cloning hackers will have less incentive to hack data bases for credit card information.
The other play is to increase usage of mobile payments. Visa plans to use mobile as a way to provide enhanced services and create loyalty. Visa can use the smartphone to be at the center of the customer’s payment and money transfer experience. Visa will also use smartphones to create customer specific ads and coupons to increase purchasing and card loyalty.
US EMV is a no brainer for Visa as it will:
- Reduce fraud via stolen credit cards and hackers
- Increase their customer loyalty and value via customer discounts presented on smartphones (making them more important in the customer buying cycle)
- Make it easier for U.S. cardholder to use their Visa cards overseas
- Increase efficiencies with one main POS system around the world
- Make other smartphone transactions like remittance and peer to peer payment more acceptable as customer will have experience using the smartphone to pay for goods and services
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