The Future of Commerce Will Combine Your Social Network and Mobile Device

Below is from my latest posts published on PayPal’s DevZone, titled The Future of Commerce Will Combine Your Social Network and Mobile Device.

Each day we hear growing speculation about the so-called mobile commerce revolution that’s just starting to take shape. Some think NFC payments will be the next big thing in retail. Others believe text-based payments will open up the mobile payment experience for the billions of mobile device holders around the world. And thousands of new apps are created each year with a new twist on using your mobile device to pay for everyday things.

To some extent, these concepts and more will shape the future of mobile commerce. However, pundits are forgetting what might happen if you combine the most commonly used platforms in the world—mobile devices and social networks—and infuse quick payment technology within them.

If Those Two Powerful Phenomena Merge, Will We Discover a New Payments Utopia?

It seems as if we’ve been in the stone age of social commerce for years now. Facebook has been around for almost a decade, and before that we had Friendster and Myspace. From my perspective, most don’t realize how close we actually are to merging social and commercial actions. How many times have you read a Facebook update from a friend, for instance, saying something like “I just saw ____ and it was the best movie I’ve ever seen.” Or what about the posts that show off a new car or recently purchased clothing? Those posts, in a small way, are the beginnings of social commerce. By sharing things such as a new purchase or a cool new movie, you are influencing your friends’ commercial interests. Today, people are partaking in social commerce without actually knowing it.

The question is, what will happen when they know they are doing it and they help you make a similar purchase? And more interestingly, what happens when it originates from a mobile device?

Read the rest here.

Mobile Payments: Siri Hears Your Words And Pays Your Rent In Seconds

Siri is an amazing step forward in computing technology.

So is Seconds.

Seconds enables customers direct interact and transaction with merchants through the mobile web.  When a consumer attaches their payment credentials to their Seconds account, they have effectively transformed their phone into a transactional device.  With Seconds, people can send quick messages and easily make transactions with merchants using the service.  Even more cool, because Seconds is driven through text messaging, if a person is holding an iPhone 4S they can use Siri to complete the mobile transactions with Seconds by simply saying the keyword.

Here’s how it works when you imagine a scenario such as paying rent, which is something we are set to pilot test in Seconds this month.  When rent is due, all you have to do is:

You say: Send a message to landlord  “Pay Rent”

Siri says: OK, here’s your message to your landlord: “Pay rent.”  Are you ready to send it?

You say: Yes

Siri says: message sent

Two seconds later you receive a text “Your account has been charged  $1,200 for your rent.  That’s it! Your rent is paid & you can get on with your life.

How did Siri know who to send the message to and how much you should pay your landlord for rent?

Seconds allows merchants to program their account and customize keywords with specific dollar amounts which act as triggers to charge a Seconds user’s mobile payment account.  So in this scenario, the landlord was able to simply plug in the amount of money “Pay Rent” would translate with and then told their tenants to just text their number and pay in Seconds next month.  This specific tenant was able to tell Siri to pay his rent for him.  And because had labeled his Landlord in his phone contacts, Siri was able to do the job quickly and easily.

Seconds and Siri are a perfect match, and we see a future where payments are so seamless we won’t even have to take out our phones (let alone our wallets).  In the future, your phone numbers + a pin will be all the payment credentials you will need.

The interesting thing about Seconds is not just the transactional component – which is definitely cool – but the communications aspect as well.  Seconds sits directly at the convergence of communications and transactions, and enables each at certain times and both when appropriate.  It’s truly a 21st century communications and commerce platform fit for almost any merchant – large or small, corporate or independent.

It’s my belief there will be many different players in the payments space, but merchants and consumers will not tolerate a plethora of options and varying requirements based upon specific merchants.  It will be far too confusing and there will need to be some market convergence as time goes on.  Consumers will most likely choose the option which is 1) quickest to use, 2) most widely accepted, 3) is not affected by a specific device they are holding, and 4) the easiest to understand.

We like where we sit within the ecosystem and look forward to a great future ahead.  It’s only the beginning.  If you are not familiar with Seconds, here is a quick video of someone paying for a “wrap” by simply texting the words.  Note:  this is not a demo, it’s the real Seconds experience happening every day and will soon be in your hands as well!

How Facebook Will Conquer Your Real World Identity

When Facebook released their S-1 announcing their intent to go public, Mark Zuckerberg left no doubt in anyone’s mind they have taken over our digital world.  According to Hitwise, Facebook now accounts for 1 in every 5 pageviews on the web (in the U.S.). It’s crazy to think Facebook wasn’t visionary in the revolutionary sense of the word, they just recognized the world needed a real directory of people, not merely another site to attract users. And indeed, they nailed it. The goal of making its social graph portable and fundamental to the fabric of the Web – and your virtual identity – has certainly been realized.

But can Facebook extend its reach outside the wired world and into your real world? Actually, I don’t think that’s the right question to ask. Maybe the better question is “HOW will Facebook extend its reach into your real world?”

It would seem they are on a tear and the facts are staggering. Hitwise found is now seeing one out of every eleven of their visits coming from the U.S., and 1/5 of all pageviews online in the U.S. takes place on Their monthly actives grew 21% over the past four months. They are now seeing about 850 million users each month, with half accessing on their mobile device. In 2011, they earned almost $4 billion in revenue and of that, exactly $1 billion was profit. In the S-1 filing, Zuckerberg even goes to the lengths of declaring their intent to fundamentally rewire the way the world works, from interpersonal interactions to commerce to even government.

Facebook’s current revenue is driven mostly by advertising, and analysts are postulating about what exactly led Facebook to IPO.  Maybe it’s a desire to steer where advertising is going, to hopefully make it more personal and relevant for consumers.  But make no mistake, Facebook is already one of the most valuable companies on the planet because of the information they gather.   Age, gender, current city, hometown, employers, education, friends, interests, and now in-app activity and commerce habits are all reasons Facebook is worth an estimated $100 billion.

Yet advertising might not always be their bread and butter since it can only take you so far (just look at what other businesses Google is trying to create) and diversification is the name of the game if you want to protect your longterm business.

This brings us to a natural progression in the digital ecosystem – from advertising to payments. Within the S-1 they revealed their virtual Payments business is already bringing in $557 million in revenue per year. From the filing, Facebook writes that “we may seek to extend the use of Payments to other types of apps in the future.” Although not specific about these other apps, one could think they could include anything that somehow integrates with Facebook.

So it would seem Facebook is on pace to take over the world….. except one big side note, the mobile device. Analysts and the media are already pointing out Facebook has discovered their Kryptonite, which would be the fact that even though almost half of all their users are accessing Facebook from their mobile device, they are generating almost zero revenue from mobile usage.

Facebook risks being left behind as the world turns more of their attention to their mobile devices. Also found in the S-1, Facebook goes to great lengths to admit they have no current way to monetize mobile “We do not currently directly generate any meaningful revenue from the use of Facebook mobile products. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers…our revenue and financial results may be negatively affected.”

So while Facebook sees mobile as critical to its future growth, the growing number of people accessing the social network via mobile devices (again, 450 million!) could negatively impact its advertising revenue unless it is able to begin monetizing its mobile usage.

This should not be taken lightly, as anyone in the industry knows mobile is growing at a rapid pace and it’s only going to accelerate. Techcrunch cofounder and guest author Keith Teare, who is General Partner at his incubator Archimedes Labs and CEO of newly funded, eloquently puts it:

The reason this risk factor jumps out of the page – for me – is that this trend to growing mobile use is inevitable. What is more, it will be both rapid and enormous. How do we know this? Well, human beings are flocking to mobile platforms in droves. This is happening to such an extent that Kleiner Perkins partner Mary Meeker went on the record almost 1 year ago to say that we are now in the 5th major technology cycle of the past half century (mainframe; mini-computer; desktop; internet and now mobile) and that mobile traffic will “grow 26 times over the next 5 years”

Mobile is The Final Frontier to Our Real Life Identity

It has been determined the most valuable network in the digital world is all your personal connections, collected and put together to form the social graph.  Expansive and data rich, this network connects you and me in a way we never would have been able to do before Facebook hit our screens.

But offline, this is not the case since transactions are the fullest expression of commercial interaction. Offline, the most valuable network is comprised of all the loose connections of merchant/customer relationships around the world, all together representing the GDP.  Broken down to each individual, possibly named the commercial graph, one can start to see patterns and degrees of separation forming.

The mobile device is the most direct and personal connection between our digital world to our physical world. We carry them with us all the time and feel naked if we leave them at home. Their use history is a picture perfect snapshot of who we are, made complete with our media and content preferences in addition to our personal calling and messaging history. Your cell phone contact history is, quite frankly, your true and actual real world social network. The location information (what is seen and not seen by the public) draws a direct path of your everyday footsteps. Like it or not, your mobile device is the crystal ball into your existence – a pure blend of your virtual and physical self.

Yet, Facebook has not figured out how to crack that crystal ball. Yes you can access Facebook proper via your mobile device… but it is still within their digital walls. I am curious as to when Facebook’s tenticals will reach outside those walls and into our physical world. And more interestingly, if not Facebook… then who else will it be?

We Express Relationships With Businesses Via Transactions

In the physical world, the truest expression of our commercial relationship with a businesses is through transaction.  If I like a product, I don’t push a button on the shelf right by where its sitting, I buy it.  If I am attracted to a city and want to stay at a nice hotel, I book the room.  Wouldn’t it be great to directly connect with merchants we care about in our life to make those interactions and transactions much easier?  Wouldn’t it be great if it operated similar to what we have become accustomed to in out digital social worlds?  Unfortunately, we cannot indicate a preferred long term relationship with a merchant, both interactional and transactional, driven through our mobile devices (Not yet that is).

With more than 8 trillion text messages sent last year around the world, and the U.S. alone seeing more than a fourth of those messages, messaging is the most predominant use for our mobile device. Research suggests messaging is still growing and arguably this won’t change for the foreseeable future. What if texting wasn’t just meant for communication, but also designed for transaction? It has been estimated that worldwide mobile payments (m-payments) will be over US$1 trillion by 2015. That is one BIG market if I have ever seen one.  And a market any serious digital media company should be focused on.

So if mobile is only going to be more important as time goes on, if our real world identities are tied to our mobile device and if transactions are the most valuable market in the world, it would make sense the next war for supremacy lies right where those three battlefields intersect.

Anyone want to suggest what Facebook has in store in the coming years to deliver returns for their shareholders? If their goal really is to fundamentally rewire the way the world works, from interpersonal interactions to commerce to even government, they need to do more than just show us ads in our news feed.

The advantages to going public at $100 billion is everyone who was a shareholder “before” the IPO will make a nice return on their investments – both time and money. The downfall of going public valued at $100 billion is that for anyone who is a shareholder “after” the IPO is going to need to see that valuation increase drastically to achieve a positive return. How is Facebook going to do that? The multi-trillion dollar worldwide market of physical world payments is probably Facebook’s best bet at making those returns come true.

Your virtual identity is arguably still up for grabs but at this point the front runner is Facebook with almost 1 billion users worldwide. The question is who will own your real world identity?

Even more interesting is wondering if we can fight for our real world identity or will we succumb to the greatest virtual social network on earth overtaking our physical world as well?

The Future Of Mobile Payments: Text A Word And Pay For Something

Imagine a world where by simply texting a word like “Sandwich” will result in a quick and seamless transaction so you could  go about your day.  Think about how much easier our lives would be if we didn’t have to wait in line, handle cash or be turned away from food or beverage if we don’t have our wallets in hand.

What if texting wasn’t just meant for communication, but also designed for transaction?

Today, most people take more precautions about carrying their mobile devices than carrying their wallets or purses.

The new question is: if your house is on fire what do you grab, your wallet or your phone?

I bet the answer is an overwhelming “phone”, since we do almost everything with our mobile devices and very soon we won’t be needing a wallet.

Our vision at Seconds is to make it easier for merchants and customers to interact and transact.  This is no more apparent than when looking at our latest innovations on the mobile payment front: Pay by Text.

Here’s how it works.

Once a mobile user sets up a Seconds account and attaches a payment card, they now can simply pay for the desired product with a one word text to the merchant’s Seconds number, in this case it would be the word “Sandwich”.  The resulting text a few seconds later will inform the user they indeed have been successfully charged X amount.  Done.

Important Note: This is not carrier billing, where you place the transaction onto your cell phone bill.  Seconds is completely separate from the carrier and a stand alone mobile payment system.

We are currently one month into a pilot program with a customer testing the functionality and perfecting the process.   Each week we are seeing more and more mobile transactions through Pay by Text, and if things keep going the way they are now this could become the default payment method outside simple food offerings.

Roll with me for a moment.  Imagine going to a movie and rather than waiting in line for the teller to give you a ticket you just simply text “Mission Impossible 4” to the box office and the next thing you know you have paid for the movie and are sent the secret code to enter via text.

Or how about the next time to your favorite band is in town…. do we really have to deal with the whole Ticketmaster ordeal?  Why can’t I send a text to the concert organizer with a simple “Said Band Name” and pay for the price of admission.

Okay, here’s a great one…. how about anything to do with hospitality?  Already, when you check in to a hotel they ask for your contact information, namely a cell phone number.  By running on the Seconds platform the can now open a quick and easy channel for you to text and pay for room service, any and all products… not to mention your room.  Or what about on a Vegas Casino floor….

So, what about NFC?

The problem with NFC technology is you actually have to be in physical proximity for the transaction to work.  The whole point of “Near Field Communication” is touching or swiping your device on a reader which will result in a transaction.  But what happens if I want to pay for something when I am not actually at the specific location or can’t get within a few inches of the reader?  What if it’s ecommerce, which will become more prevalent as time goes on?  Although it might have its place, it looks as if NFC  underwhelms and under-delivers.

That is why we are very excited about our Pay by Text technology, we see a whole new world of payments when you disassociate proximity from transaction.  It’s going well right now and the future is looking very bright for Seconds.