IBM Bluemix: A digital innovation platform

Since transitioning from mobile payments into another exciting area of technological innovation, I have been heads down exploring and developing much-needed expertise in explaining the value and tenets of innovative platforms. In this post, I am going to discuss the foundational elements of innovation and the collaborative efforts between enterprise IT and business to foster a culture of innovation. I will also discuss IBM Bluemix, a digital innovation platform that can help an enterprise establish the building blocks that fuel high growth. High-growth companies are the ones able to deliver value and experiences on the user’s terms. 

So what is innovation exactly?

David Briar in his blog post discusses innovation and draws inspiration from the Sir Richard Branson mantra A-B-C-D (Always Be Connecting the Dots). These dots are fundamentals that form the foundation of an enterprise. It is only when we start connecting the current dots with the new dots—and even with dots that do not yet exist—that we are building a foundation for innovation.

I imagine the dots to represent ideas and concepts. Linking these ideas and concepts enables a synergy that propels an enterprise toward a path of continuous innovation. But does this notion of connecting dots translate into a connected enterprise that becomes a fertile ground for new dots? The most successful and innovative enterprises seem to see the dots that others miss. Therefore, isn’t innovation the ability to see the dots that are absolutely necessary to move the enterprise forward?

What helps to foster innovation in a company?

While many CEOs and business leaders see innovation as a necessity and a primary focus for an enterprise, very few are able to understand the dynamics or ingredients needed to stimulate a culture of innovation. Silicon Valley, which is a beacon for innovation and creative minds, often talks about failing fast, failing often, and promoting a culture of risk and experimentation.

Here is a list of what I see as the necessary ingredients required to foster a culture of innovation:

·       Strong commitment from leadership for funds and resources

·       A platform that enables ideation, proof points and synergies across the organization

·       The ability to fail fast and fail often without breaking the bank

·       Agile enterprise systems, balanced by the consistency of traditional enterprise systems

Innovation leads to disruption, and companies of all sizes have the opportunity to disrupt or face the prospect of being disrupted.

Bridging the gap between business agility and IT consistency

As strategic and operating conditions become increasingly turbulent due to factors such as hyper-competition, increasing demands from customers, regulatory changes and technological advancements, the ability to sense relevant change and respond readily becomes an important determinant of success.

While the business seeks agility to deliver new “stuff” faster across multiple platforms and devices, IT seeks consistency in standardizing integrations while securing access, data and identity.

While the goal of IT is to enable business agility, these concepts are often at odds. Business agility is usually driven by sensing the environment (dynamics such as market, competition, product demand and so forth) and responding with new and improved products, services and varied offerings that meet the demands of a changing market. IT services, on the other hand, are focused on achieving consistency in processes, technology, deployments and operation of the machinery that supports the business. IT is therefore less about innovation and more about technology as a business support service. This argument leads a hypothesis that business agility is an innovation agenda.

Ideally, if IT entities can enable a frictionless operating environment, IT can facilitate the business innovation agenda, while keeping up with innovations in the technology landscape and providing tools that help the business to take advantage of innovations.

The following points are a few tenets of a frictionless IT operating environment:

·       A “fail fast and fail often” environment: This means an environment where more time is spent in experimentation than request processing and provisioning of resources, an environment that can go from proof of concept to production in a few days.

·       Fast deployment: Compute resource contention and provisioning have often been an innovation bottleneck due to time and resource consumption. Even in most cloud environments, provisioning of basic building blocks is an ordeal, so faster deployment is essential to create a more frictionless environment.

·       Polyglot environment: Innovation is not confined to a specific programming language (Java, JavaScript, Go and so on) or runtime (Java, Ruby, Go and so forth). When creating a platform for a connected enterprise and fostering a culture of collaboration, a diversity of not only people but also technology should be welcomed.

·       Continuous integration: If enterprise IT platforms aspire to take seconds to deploy, continuous integration of development and operation practices (or DevOps) will support the faster deployment paradigm. This means continuous integration of not just IT resources but also the business policies and practices enabled by robust technology practices.

·       Choice of tools: A frictionless environment means providing a canvas to an artist with all the tools and building blocks needed to foster creativity. These tools include not just a rich set of platforms, runtime and services but also access to external ecosystems for service consumption.

·       Ecosystem of APIs: The API economy is playing a vital role in innovation by harnessing the synergy among internal ecosystems and sourcing aspects of innovation from the external and rapidly growing API ecosystem.

·       Mobile focus: Given that mobile is the primary channel for services consumption and engagements, mobile delivery is a prime consideration for any enterprise IT.

IBM Bluemix attempts to bridge the gap between business agility and IT consistency, asserting itself as a digital innovation platform. By addressing all the tenets of a frictionless IT with a rich ecosystem and mix of services, IBM Bluemix becomes integral to business agility. In Bluemix, IT entities can expect a consistent, open-platform-based operating environment that will allow businesses to experiment and connect the dots.

In closing, I’d like to cite Steve Jobs: “You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

Let’s connect the dots and let the innovation journey begin! Connect with me on Twitter @nitingaur to share your thoughts on innovation or talk more about IBM Bluemix.

PaaS Motivation – enabling infrastructure for truly liquid application design.

PaaS Motivation – enabling infrastructure for truly liquid application design.

Key Words: GCE, Docker, Meso, Kubernettes, and Swagger and Micro services?, liquid applications, Containers, PaaS, Fig, Digital Experience.

As I take on my new role and interest in diving deep into – Platform as a Service – PaaS world, I wanted to take some time in discussing what I know now AND how that point of view may shift as I learn more about the PaaS evolution. While en route to IBM InterConnect 2015, I figure I jot a few thoughts and reflect on my past encounter with Cloud, more specifically PaaS.

         In my previous post titled “Cloud, Mobile, MBaaS… How do we make sense of it all” - I discussed the trends that drive the innovation to make the application design more liquid. But before spend more time discussing what a liquid application design means; I would like to define a few commonly used terms in Cloud parlance.

The terms described below have evolved to provide a structure and concept consumption around Cloud paradigms:

IaaS – Infrastructure as a Service (Essentially HW + OS + Other Network services)

PaaS – Platform as a Service (IaaS + Platform technologies such as Middleware/Directory services etc)

SaaS – Software as a Service (Bring your Mouse and yes.. your skills.… and provision and configure/consume services)

I also discussed that digital experience driven trends that may tip the scale in driving the cloud patterns to new heights. But before we discuss these trends and technologies we need to understand drivers responsible for the resurgence in cloud consumption. While every enterprise is racing to define their approach to liquefying application design, be it, Mobile, Social, Cloud or Dev-ops, I do not view them as separate disciplines. In Fact I view them as a singular discipline that aims to surface a digital strategy – a platform that enable information dissemination, interaction and engagement.

          So what is a  Liquid application after all?  If I were to define a liquid application design  it would be a design pattern that hinges upon a paradigm that is loosely coupled and leverages the  data and business logic to derive intelligence regardless of underlying limitation  of  HW, networking, virtualization platform, programming languages, and legacy application design approaches. While this definition may seem too broad let me attempt to dive  a bit deeper.

         While IaaS layer is to enable the use of fundamental computing resources, such as, storage, networking, hardware, memory etc and enable enterprise to leverage computing power to maximal advantage. PaaS motivation on the other hand is to further exploit the flexibility enabled by IaaS layer to enable ease of movement of data, application code, logic, configuration and associated application artifacts. 

Platform frameworks such as CloudFoundary, GCE – Google Cloud engine and container frameworks like  Docker, Meso, and Kubornettes aim to provide the fluidity towards achieving the holy grail of liquid application design.  Container frameworks such as Docker for instance advocate no reliance on any external environment. In fact, container app paradigm advocates a self-contained environment where you store all config values, dependencies, everything inside of the container itself.

 The focus here is decoupled applications that rely on a fluid discovery and network infrastructure to resolve operating dependencies and communicate with other applications. Apps communicate with the rest of the world via ports and via Dockers itself. The trade-off is that apps become a little bit bulkier (though not significantly), but the benefit is apps become maximally portable.¹ This concept has given rise to discussion around containers and micro services.  This also means that software defined networks is essential to achieve a true PaaS infrastructure. More on this in future posts…

In  this post I would also like to draw attention to understanding the drivers responsible for the resurgence in cloud consumption… all driven by digital experiences  and it’s derivatives. ( I have discussed these concepts in my previous posts)

a.    Software and Data Ownership –There is  a complex relationship between the data ownership and software ownership. Clients want to own the data and not the software ( due to licensing costs and maintenance). This leads to interesting conversation around traditional hosting/resource provisioning and ability of an enterprise to just create Mobile application services and provide an integration point to the enterprise.  This model allows the enterprise to control data access and ownership and yet keep up with the modern trends in the industry at relative low costs without extensive capital investments into software ownership. Think of this more like a “Software rental”, a concept that  lends itself to Hoteling or multi-tenancy.

b.     Burden of System Management – With IT systems and managers driving for efficient consolidation  adding another tier of system management to address Mobility can be a daunting task, besides monitoring and analysis of critical business objectives gets the time share. So the notion of provisioning, managing and monitoring system like Mobile device management, MBaaS services ( Mobile Backend as a  service) is preferred to be managed and maintained in cloud.

c.    Continually evolving Mobile and API Eco-system – Our clients have, in the past, spent time and money to harden the  infrastructure and handle the evolution  in middleware Infrastructure and platforms. There is little or no appetite to deal with a much rapid force of changes with in Mobile Eco system that has direct impact on the existing infrastructure. The assumption here is that the cloud based services will keep up with eco system evolution such as notification systems, MobileOSs, and new and emerging mobile-social integration points ( such as OpenAuth, Social updates and notification and API economy) and enterprise get to use and keep up wit the changes by association. Thought to ponder  upon here is how do Mobile Infrastructure Cloud service provide keep up with this rapid change? What are their challenges?

d.    Ephemeral nature of Mobile/cloud Application landscape – As discussed earlier rapid shift in the mobile landscape driven primarily by the MobileOS vendors and Mobile services ( NFC, Payment, Notifications etc), many client hesitate in locking in an on premise platform as many question the ability of these vendor provided platforms to keep up with the changes in marketplace.

e.    Changing mindset around investment and consumerization of Mobile/application platforms – As our clients are still in process of  defining their ROI expectations and as business evolve to adapt to Mobile way of doing business, there is clear lack of leadership and the idea of disengaging or switching providers not only makes business sense but also addresses the long term capital justification concerns. Mobility in cloud seems a more palatable and economically viable option. Unless there is a  defined business value or a ROI around ownership of mobile platforms, this will be  a “rent vs. buy” discussion.

f.     Social ’ization’ of APIs – With emergence of Mobile API services offered by the social media eco system, and other vendors like Twillio, Google etc clients have eased into “service virtualization’ concepts and are more comfortable with cloud based models. After all many B2C application rely on this emerging and burgeoning API economy. (reading: Look at Programmable Web, API.io, Swagger)

So while very definition of Platform is in flux I think it is reasonable to say that the PaaS  as  a concept and discipline is evolving.  I plan to discuss more on container technologies, networking and PaaS platform component in my next post.

Stay Tuned…

Interesting Reading:

1.    https://blog.appfog.com/docker-and-the-future-of-the-paas-layer/

2.    http://www.cloudypoint.com/cloud-services/docker-cloud-foundry-openstack-integration/

3.    http://swagger.io/index.html

4.    StrogLoop – Loopbacl Node.js - http://strongloop.com/strongloop-suite/loopback/

5.    Twilio – communication voice based API  http://www.twilio.com/

6.    Web API management - http://www.informationweek.com/whitepaper/Business-Intelligence/Business-Process-Management/web-api-management-new-rules-for-a-new-economy-wp1367342058?articleID=191708409&download=true&popup=true

7.    Mashery - http://www.mashery.com/

8.    Apigee - http://apigee.com/about/

9.    Rackspace Cloud Mobile Stack -http://www.rackspace.com/cloud/mobile-stacks/

10.http://12factor.net/codebase

Mobile Payments was ‘enriching’ experience, and I think FinTech industry is just too cool!

Mobile Payments was ‘enriching’ experience, and I think FinTech industry is just too cool!

I have not written for a while, and there is a reason for it. I have been heads down on many cool projects and have been focused on consuming information and building a knowledge base. And as I transition to my next adventure, I would like to reflect on an amazing experience in Mobile payments world.  I have dedicated a lot of time in understanding payment landscape, which is enormously complex and fragmented. With Mobile payments on the rise as a disruptor, the landscape does not get any simpler, with low barriers to entry and push from many Silicon Valley disruptors there is never a dull moment. In this journey I also discovered several interesting adjacencies including remittances, P2P Payments, block chain technology, Cyber currencies and FinTech (financial technology) to name a few with a whole set of new business models emerging to disrupt which was once known to be a fairly mature industry. The disruption is again driven by not only by the usual silicon valley suspects like square, PayPal, Ripple and likes, but also new emerging set of FinTech players in the Fintech Hubs in NY, London, and Toronto.

What is so fascinating to me is the convergence of technology, financial principles and relentless drive from a few to disrupt a highly regulated industry.  So let’s take a closer look. Wharton Fintech – a student led body defines FinTech as - an economic industry composed of companies that use technology to make financial systems more efficient. This implies that the financial system be it payments; money transfer, remittances etc. did have inefficiencies. These ineffective manifested itself in terms of complex ecosystem relationships, inter/intra bank partnerships, cross border exchange fees, interchange fees and time. FinTech in my findings are not only trying to disrupts the existing business models by creating new values for the end consumers but also paving the way for other adjacencies such as new markets for loan processing, captives, vendor, equipment and inventory finance etc. matching market makers and market seekers for the best possible outcomes which benefits the industry and consumers alike.   After shaping every aspect of our lives from the way we communicate, socialize, buy, sell and even find love, I think FinTech which are enabled by technology, a strong backing from silicon valley and VC funding is poised to disrupt an industry that was mired with complexity, rules, regulations and in some cases controlled Oligopoly – and the big players are not only aware but actively investing into incubator projects to claim their share.   

   

As I understand the interrelationships between these complex and continually evolving industry landscape, I try to pin the foundational technologies that make this disruption a possibility.  While exploring foundational technology for mobile payments, in my post on Design imperatives of Mobile Payments solution I described the fundamentals of Secure Engagement as a primary foundation.  Where Secure Engagement implies that the technology should be mostly invisible, with a focus on consumer adoption and scale for sustained growth and usage. With focus on consumer adoption which may manifest in form user interface design, better back end integration with system of records, optimized performance and use of contextually relevant mobile services, security should be embedded in every aspect of the design. Security design considerations are particularly important as we design a Mobile Payment Solution, as Trust is single most important currency, which will enable rapid adoption and protect and establish long-standing consumer relationship.

Similarly I think that concepts around distributed application platform that enables and support - trust systems where decentralized autonomous entities can exist and transact. The role of the system would link the verified, trusted entities to engage in a business contract that is not only mutually beneficial, fast but also conforms to regulation and enforceable by law. This concept relies on a decentralized application system that is capable of processing digital assets and enforcing smart contracts.  Digital assets can include (but not limited to) cyber currencies, generally accepted financial instruments, things of value that can be digitally exchanged, and a smart contract that adheres to the established rules and regulations. This will enable, not only confidence in the exchange system but also enable a platform for regional and cross border intermediation. In essence FinTech are shaping the finance sector like Internet changed the creation and consumption of information. Which only means that all the innovation in this sector will impact the way we do business, negotiate contracts, make payments, manage wealth and exchange goods and services.

In addition to learning in-depth the systems, regulations, legal framework around Mobile Payments and its adjacencies I also learned a lot of valuable lesson around business. More specifically business of new product, new services and risk associated with such an initiatives. I also think vision and courage together are an important element of any new endeavor. Regardless of data collected from analyst reports, Market intelligence, market data insights and opinion of pundits – it is courage that is equally important that drives the success of a new venture. Fortune favors the bold – I have learned that staying committed to not only making right investments but also have an appetite to take risks is vital for sustainable focus. There is no such thing as risk free investment, especially if we are expecting high rate of return and glory of innovation. There is also a lesson in driving organic growth where we not only develop industry specific expertise, skills and leadership trait but also foster a culture of ownership, risk assessment and above all learning to deal with failures. The satisfaction of seeing a vision coming to fruition is priceless.

As I begin my new journey in holistically understanding the components and market dynamic around Cloud - which is surrounded by commotion of many value added services and rich eco system of APIs and programmable web, my role in next few months will be to absorb all facets of business and technology that surrounds Cloud (Iaas, PaaS, SaaS and more…). I plan to immerse myself in learning the impact and best route to maximize the promise of cloud.

Stay Tuned…

References:

1.     http://en.wikipedia.org/wiki/Financial_technology

2.     https://www.mindmeister.com/488176466/fintech-landscape

3.     http://www.whartonfintech.org/blog/what-is-fintech/

4.     http://byteatlas.blogspot.com/2014/09/adolescent-years-of-mobile.html

5.     https://ethereum.org/

6.     https://ripple.com/

Mobile commerce driving mobile payments

In my previous blog post, I discussed the core objectives of players in the m-commerce ecosystem to influence users in choosing a payment instrument and to shape the payment experience with ease of use, assurance of secure identity and transaction, and lures of offers and loyalty. While e-commerce and m-commerce trends are the chief drivers of innovation in retail payment, the focus is driven by convenience, experience and speed of payment processing.

In the past week we have gone through the biggest annual retail events: Black Friday and Cyber Monday. In this post, I discuss some notable trends that are emerging and ways retailers can adapt to them. One of the largest sources of my research for this post has been IBM Digital Analytics Benchmark Hub, which collects data from over 800 retail websites and 8,000 brands across 35,000 engagements. (It does not collect overall sales figures.) Let’s begin with some notable observations on Black Friday and Cyber Monday:

• As the new digital shopping companion for many consumers, smartphones drove 34.7 percent of all Black Friday online traffic, more than double that of tablets, which accounted for 14.6 percent. Yet, when it comes to mobile sales, tablets continue to win the shopping war, driving 16 percent of online sales compared to 11.8 percent for smartphones, a difference of 35.5 percent. (Source)
• Thanksgiving Day mobile traffic accounted for 52.1 percent of all online traffic—the first time mobile devices have outpaced their PC counterparts for online browsing. Black Friday mobile traffic reached 49.6 percent of all online traffic, an increase of 25 percent over last year. (Source)
• Apple users spent an average of $118.57 for each order, marking a 24.5 percent difference with the $95.25 spent on average by users buying with their Android devices. (Source)
• On Thanksgiving, mobile devices drove 52 percent of all US internet traffic. That’s more than Netflix! (Source)
• Thanksgiving Day and Black Friday set new (online) sales records at $1.33 billion and $2.4 billion, respectively. (Source)

So what does it all mean for the retail Industry?

For this discussion, I would like to borrow a page from the IBM Smarter Commerce playbook. The IBM retail solutions group defines the industry components, and we ought to not only understand them but also build upon them. Here is an attempt:

1. Buy: Think procurement.

How do retailers mobilize procurement? Optimize supplier and partner interactions based on changes in demand and customer behavior throughout the value chain.
How and why do we mobilize the buying process? Do retailers use this as a competitive advantage to fuel the feedstock of optimized supply with relevant consumer context? This is something to think about as stores struggle to provide a true omnichannel experience.

2. Market: Think location-based services, and use profile, context and marketing associated with it.

Apply deep customer insights and behaviors from both online and offline channels. In the mobile world, it is all about context and precision. The era of mass “hit or miss” mailings is being replaced with analytics-driven context awareness. This implies a business need to not only invest time in understanding your clients but also maintain a relevant dialogue.

3. Sell: Think mobile browse-to-buy ratio, order fulfillment, client reach, exception processes and mobile payments.

Empower customers and partners to purchase, shop, exchange information and fulfill orders. The net here is the “customer spend”—converting the browse-to-buy ratio. To do this, you must make sure that “browse” is customer experience–focused and “buy” handles issues like payment (which today is either cloud or near field communications, NFC, based). This area requires significant consideration to ensure seamless payments, loyalty and security with frictionless checkout processes.

4. Service: Think notification, bidirectional messaging, social hook points and so forth.

Provide flawless customer service in all customer interactions. We tout that mobility is context-driven, but how do businesses tie in the post-sale processes? This relates back to closing the loop from marketing, selling, accepting payments and loyalty rewards, and ensuring satisfaction for future inroads—all in an effort to capture mindshare of the consumer.
But understanding the industry components of the mobile retail and payments industry is not enough; there are significant challenges that any enterprise would have to consider. Some challenges include:
Payment: Today clients have a few choices:

• Cloud:  Cloud payment solutions are simple to implement and integrate into business processes.
• NFC: Near field communications have become the center of the payment focus, and as the retail industry absorbs the change, a cross-platform payment strategy should not be overlooked.
• Custom processing: This is traditional credit card processing, and most commerce platforms provide integration avenues with payment processors and payment gateways.
• New emerging consortiums: It is important for companies to understand how a large consortium of retailers affects frictionless payment processing.

B2B: Complete integration with business partner gateway services is another challenge that mobility will need to consider. This includes procurement processes, invoicing and corporate payments. Many financial-technology companies and startups have begun to address this issue and provide package solutions. The idea is to speed up processes, invoicing and payments for better inventory and management of working capital.
Brand management: How do we help a mobile storefront manage a cohesive brand like they do on the web? Mobile interaction is all about perception and given ephemeral and fickle consumer behavior. Every mobile interaction is a brand experience and should be treated with care.
These are just glimpse of issues we can encounter, and it’s by no means an exhaustive list.
So what can we expect to see when we discuss the shift in trends in 2015? Here are some things to keep an eye on.

1. Mobile is to account for 25 percent of US online sales by 2017.
2. Some 45 million Americans used their phones to shop in June.
3. Europeans will increase mobile spending 11x over next five years.
4. Black Friday sales figures are soaring for online retailers.
5. Loyalty, mobile wallets and integrated technology are now appearing in stores.

We can expect to see an upswing in current trends that will be dominated by mobile interaction—not just at the storefront but across all retail and commerce activities, from marketing to mobile payments. A continual data-driven feedback loop will help to maximize the process efficiency and use of customer context data.
Are enterprises ready to handle this shift, not only adapting but leading the disruption, in hopes of capturing mindshare and wallet share of the consumers?

Commerce trends are the primary drivers of innovation in retail payment

Commerce trends are the primary drivers of innovation in retail payment.

Folks it has been several weeks since my last post, and I continue to learn a lot about the evolution of payment industry. Last few weeks I was fortunate to be a part of AFP Conference (Association of Financial Professionals) in Washington DC and Money 20/20 in Las Vegas. It was simply amazing to meet many professionals, evangelists and silicon valley disruptors, all working to make Mobile Payments – safe, cheap and relevant to the times we live in.  I got to speak at AFP Conference on the technology trends that impact Payment industry. At Money 20/20 I got to meet many Mobile Payment Players – old and New, with many new value proposition around Bitcoin, P2P payments and retail payments. I was refreshingly surprised to see interest around Bitcoins, cyber currency and Block chain technology with a large participation from startups and established players in the Bitcoin network, exchanges and consortiums. I am personally very interested in Bitcoin technology and the network while still a skeptic around the currency itself.

            So while a lot is going on in the payment world, in this weeks post I would like to focus on retail payment trends as we approach the biggest shopping event of the year – Turkey Day shopping or Black Friday.  I find these noteworthy shopping events interesting as they not only set the trend but also set the tone of what is to come in future. I firmly believe that it is these commerce trends that are primary drivers of the innovation in retail payment industry. I have listed a few anecdotal evidence below as news worthy announcements. These and many such trends indicate that the focus is shifting from the issuers, rewards and payment network to the end consumer and merchants. The biggest of all is the emergence of “Contextual Payment” which is driving the dynamicity around retail payments technologies and systems. For a consumer it is the device, location services and mobile Wallet or a payment instrument. For enterprises such as retailers, Banks or a Merchant, the story is not that simple.  The growing diversity of payment acceptance such as in-store, in-App, online, social media, cyber currency puts the focus back to consumer that choose a certain way to buy and pay and merchants that support technology for an Omni channel payment experience.

             This weeks blog posts I will attempt to discuss my hypothesis that Commerce trends are the primary drivers of innovation in retail payment, by discussing the e/m –commerce trends, technological evolution  and it’s impact on retail, banking and payment industry. My goal is to  discuss the inflection point that described the intersection of  retail industry and payment industry.

Here are a few news worthy announcements:

1.     Beating the numbers - Alibaba announced that total sales on Singles’ Day — China’s largest online shopping festival — reached a record $9.3 billion, And Alipay, its Paypal-like affiliate, saw the volume of payments processed increase by 60 percent to reach $5.8 billion across the entire day.

2.     mPayment as a Value Add Service for Merchants : Square Register - cloud-based point-of-sale tool to track sales, and manage items and inventory. This point-of-sale software will be soon available to businesses worldwide

3.     Mobile Shopping and mCommerce: According to IBM Digital Analytics Benchmark hub predictions, more than half of all online shopping on Thanksgiving, roughly 53 percent will come from a mobile device, up 23 percent year-over-year. Mobile sales are also expected to grow, reaching 28 percent of all Thanksgiving online sales, an increase of more than 9 percent over 2013.

4.     mWallet Wars - Google is to give away $100,000 to users of its mobile wallet who recruit a friend to the platform, as it prepares to do battle with Apple Pay and Softcard for market share over the all-important US holiday season.

5.     Competitive pressures  and Coupon Fraud – Fake Amazon pages created by consumers to get cheap electronics at Walmart, due to Walmarts price match policy.

6.     Bitcoin is gaining momentum - PayPal can now easily start accepting payments from customers that use Bitcoin  - entering the world of cyber/digital currency. And joining the likes of Amazon, Overstock and Tiger Direct to name a few.

Role on Mobile Wallet and battle for Mobile Payments

ApplePay has certainly been the focus of conversation around important of a slick payment instrument. AppplePay has been a stunning  success and has certainly stirred up the mobile wallet wars.  And while we all understand the concept of Mobile wallet, this concept that is simple for the consumer can get quite complicated for industries such as retail and banking. The notion of digital wallet is very confusing. The market of digital wallets is fragmented and changing rapidly. The innovations to the likes of Google wallet, Square, and PayPal to name a few have truly disrupted the traditional payment schemes such as cash or bankcards.  This led to digital wallet frenzy where every bank, including payment processors such as a Visa and MasterCard has launched their own version of Digital or Mobile Wallet. So which is an Ideal Mobile/Digital wallet? The Answer happens to be in our own wallet. An ideal wallet should be

a.    Customizable – Like our own wallets

b.    Does more than Pay (such as a Person to person, like cash,  and have the ability to store other credit or cash instruments)

c.    Work Anywhere (open frameworks technology implied),

d.    Inclusive of rewards management – either links the apps, or drive the reward management from the back end systems

e.    Simple, Secure and Easy to use – Simple and easy to encourage adoption, Secure to institute trust.

Key Battleground for mobile Payments include:

1.     Proximity Technology – With ApplePay endorsing NFC technology, there still remain a competing battle for other technologies that include QR Code, Bluetooth Low Energy (BLE) and Option for in-App purchases.

2.     POS Support – The question for POS vendors is not just survival but reaction of  modular system that can evolve with the Mobile proximity payment options. One school of though suggests using the same technology that is in hands of the consumer i.e Mobile devices, such as use of Tablets as a POS option.

3.     Payment credential Storage or mIdentity –  This includes the security or identity technology. For instance ApplePay has a  secure element that stores a payment token issues by a bank or a network, Google or Android has a HCE or Host Card emulation alternative. Other competing technologies include  SIM Based, MicroSD etc. The idea is to ensure that the payment identity is secured either locally on the device or in the cloud and is unlocked with various 2^nd factor authentication mechanisms.

4.     Payment Account - This is where things get  interesting as the battle for the “Account of choice” ensues.  This includes credit cards, open and closed loop accounts, loyalty accounts, Mobile network provider accounts etc. The goal of the every player in payment value chain is to maximize benefits  fir themselves and the end users.

5.     Interface and Interaction technologies – These sets of technologies sets the focus on the consumer, where the interface or Interaction(in case of wearable) will set the tone on usage and popularity. Easier to use payment instrument with implied security tends to win the mindset and ecosystem share. ApplePay is a  good example of simplified security and ease of use.

Conclusion:

            Mobile Payment and payment related technology landscape is in constant state of flux. Over past several years’ number of innovations in retail payments have emerged and continue to evolve. These innovating that affect the retail and banking industry along with the retail payment industry. The core objective of any players in this ecosystem is to influence the users in choosing the payment instrument and by shaping the payment experience  with comfort of ease of use, assurance of secure identity and transaction and lures of offers and loyalty.  While e/mCommerce trends are the primary drivers of innovation in retail payment, the focus is primarily driven by convenience, experience and speed of the payment processing. There are a  few  imperatives that can be concluded with the emerging payments trends, some of them are:

a.     Only a handful of payment innovations thus far have had an impact of the payment industry. ( NFC for instance with ApplePay and Android HCE)

b.     Many technological option piggy back on the exiting retail payment systems ( most proximity payments rely on credit/debit rails)

c.      While most innovations have a potential for a  global reach,  there is an emergence of regional payment options that dominate the regional market. ( Proximity payments in developed economy and Mobile Money ( like mPesa) in emerging economies)

d.     Continued focus on speed of payment processing,  this manifest itself in form of faster settlement or faster payment initialization. ( e.g. Stand-in services by PayPal, or batched approval for micro payments such as bPay)

e.     While developed economies focus on speed, engagement experience and contextual value add services, the emerging economies  see financial  inclusion as a primary driven in development and evolution of regional payment blocks. (BKash, Tigo, mPesa etc. are examples that has enabled opportunities for financial participation in untapped markets)

f.      New entrants and lowering the barriers to entry into payment ecosystem.  The markets dominated by Banks, payment processors and payment Networks; see a flood of new entrants. These new entrants such as Dwolla, Ripple, Boku, Zong etc. not only provide technology innovation for low cost of transaction, faster processing, settlement etc., but also provide a competitive landscape to the seasoned players with long history and maturity in payment business.

   And more…

References and Interesting reads:

1.     http://www.finextra.com/news/fullstory.aspx?newsitemid=26729

2.     http://www.celent.com/reports/top-trends-retail-payments-year-review-0

3.     http://techcrunch.com/2014/11/10/alibaba-makes-strong-start-to-singles-day-shopping-bonanza-with-2b-of-goods-sold-in-first-hour/

4.     http://www.bis.org/cpmi/publ/d102.pdf

5.     http://www-01.ibm.com/software/marketing-solutions/benchmark-hub/

6.     http://www.finextra.com/news/fullstory.aspx?newsitemid=26719

7.     http://www.nbcnews.com/tech/gadgets/wal-mart-scammed-selling-playstation-4-90-n251831

8.     http://money.cnn.com/2014/09/26/technology/paypal-bitcoin/