The 'Shakespeare' App

Tim O'Reilly of O'Reilly Media delivered a provocative and inspirational keynote address at the PayPal DevCon held in San Francisco last week. One point he drove home was that developers should take advantage of the sensor capabilities of smart phones. He mentioned how a phone can sense the unique gait of its owner; thus how we walk can be used as a biometric authenticator. Or how, when two phones running the same Bump application are touched together, a P2P payment is automatically made. So apps can be developed to utilize the "sensitivity" built into smart phones.

My thoughts naturally turned to apps useful for writers. What novelists and poets do is filter the material world through their senses. So why not an app that sharpens or extends that ability?

A Bluetooth-enabled camera can be attached to the rim of my glasses. My phone recognizes when I pause to look at something and snaps a picture of it. Then my phone is also keyed to laughter, since laughter means something interesting was seen, heard, or said. Any time the phone registers laughter, the phone records the audio of that, and the conversation around it. Finally, throughout the day my phone records my breathing and heart rate.

At the end of the day, the app compiles all this information into a multimedia presentation that I view on my phone before I go to sleep. I see all the highlights of my day, all the interesting things I've seen and heard but perhaps have not really registered because I was too preoccupied or distracted to take notice. The audio and video is cued to a graph of how my body responded to the various stimuli over the course of the day. 

In the end, this biofeedback loop helps me experience my day with more clarity than I brought to the initial experiences, and maybe I fall asleep realizing how rich my everyday, humdrum life really is. An app like that couldn't help but enhance my capacity to experience and recall the world. It would ultimately result in better writing.

When many of the apps developed for mobile devices end up distracting users from the real world, my "Shakespeare" app would do the opposite. Anything to make my morning commute a little more interesting.

A rupee for your thoughts

Banks worldwide have proven themselves woefully inept at providing poor people a means to help them prosper financially. Either banks take advantage of them or have no clue how to market services to them or figure they are not worth the effort since they are, indeed, poor. So there exists a gaping need amongst the world's poor for financial tools to help lift them out of poverty.

That's where alternative financial services (AFS) come in. These are processors and program managers that offer microfinance loans for people to start businesses and hire workers; payment cards that are not tied to bank accounts; mobile phone services such as bill pay and money transfers to electronically direct money where consumers want it to go.

Take, for instance, India. This country of over 1 billion people has an inordinate amount of desperately impoverished people. Lately, the Reserve Bank of India (RBI), which manages the country's monetary policy, granted licenses to alternative financial services companies to expand their networks amongst the nation's poor. Using the services mentioned above, these companies are busy reaching out to the "unbanked", expanding prepaid card reload networks, and striking partnerships with telecoms for mobile payment capabilities.

It is ironic that RBI is controlling this initiative, since the bank was unable or unwilling to help its own poor directly. But maybe it has seen the light philosophically, or perhaps to be more realistic, it recognizes the profits available through its AFS intermediaries. I'm sure those bank licenses don't come cheap.             

Evolution, not revolution

When I added the tagline "The revolution will be monetized" to this technology blog, I thought I was pretty clever. But a Google search deflated that pretension, as the phrase had already been used. That's when I changed "revolution" to "evolution" and stumbled upon the general direction this blog will apparently take.

Revolution implies dramatic, historic change that can be pinpointed on a timeline. But evolution is something that is ongoing, always happening. It exists on a continuum, with no beginning or end. It's a river, not a rock.

Evolution is what we are experiencing with the rapid advancements in technology, evolution in how we live and think. Our technological progress reflects -- and is -- that evolution. I believe as the Internet and the mobile phone grow in importance to our lives, we will become more aware of virtualization.

What I mean by virtualization is the abstraction of material things -- physical cash becomes a series of digits in a bank account and a paperback becomes an e-book. While nothing can replace physical experience, and having tangible assets in the bank, such as gold and silver, hedges against financial disruptions, the virtual worlds which we increasingly inhabit are bound eventually for us to start thinking more abstractly and less materialistically.

Materialistic thinking tends to focus only on the self, what we can get for ourselves, even if it is to the detriment of others. Abstract thinking expands our perceptions, opens us up to all that is beyond ourselves. More thoughfulness and greater awareness can only make us better people in the long run.

So, the evolution will be monetized. And don't forget it.

Prepaid and the mobile wallet

There seems to be an affinity between prepaid cards and mobile payments. The percentage of people around the world who have cell phones is very high, even in desperately poor countries. The percentage of people around the world who don't have access to bank accounts, and thus have no debit cards (let alone credit cards), is pretty high. Therefore, the only electronic payment vehicle the world's poor have access to are prepaid cards, because they are not tied to bank accounts or lines of credit. And, since the worldwide unbanked do have cell phones, the wireless phone-prepaid card connection is made.

The same logic applies to the underbanked. Teenagers are representative of this group. Because of their age, they have limited access to bank accounts. So the teen market is a primary one for prepaid cards. And what teen doesn't have a cell phone?

Finally, smart phone payments are likely to be small-dollar purchases. You will probably opt to buy a sandwich at the deli using your phone, not when you make an expensive purchase, like buying a car. Prepaid cards are seen as ideal for those small-dollar purchases, as well, because the cards are really just the electronic substitute for cash. And most people don't buy cars with cash.

It's another reason why folks will slip that prepaid card into their mobile wallet when they take their date to the movies, not when the car needs new tires.

Ubiquity

"Ubiquity" is a popular word in payments. It is an especially relevant term for mobile payments, where ubiquity means that all brick-and-mortar merchants in the U.S. have point of sale terminals configured to accept payments via smart phones. It means that when consumers come into stores, they can make purchases just by tapping the phones on the terminals.

But if the ability for all merchants to accept mobile payments is not there, then it diminishes the convenience factor for consumers. If a shopper wants to pay for groceries with a smart phone, but the merchant's terminal is not set up for it, then the shopper gets frustrated, puts the phone away, and returns to a payment card or cash for that purchase. Maybe next time the shopper wants to pay using a smart phone but thinks better of it because of that negative past experience.

Therefore, to encourage consumers to use mobile phones to make in-store purchases, the ability to accept smart phone payments must be everywhere. Imagine a time when smart phone-enabled terminals are as ubiquitous as Lady Gaga...Ah, what a thought!

Partnerships galore

Pilot programs are nothing new in the payments industry. The card brands (Visa, MasterCard) routinely buddy up with payment technology providers (such as ViVotech) and merchant acquirers (like First Data) to test out new payment technologies. The pilots are designed to work out the kinks in the technology and gauge the interest in it by consumers. Often, the companies publicize the positive results of a given pilot, but then you hear nothing more about it.

But recent announcements seem to point to increased momentum for smart phone payments. In August 2010, an article on Bloomberg reported on a triumvirate of wireless phone carriers -- Verizon, AT&T and T-Mobile -- that apparently partnered with the card brand Discover and Barclays bank for an NFC-enabled smart phone pilot.

And then in September, two more announcements. Point-of-sale terminal manufacturer VeriFone announced a partnership with NFC technology company Bling Nation for a "tap and pay" initiative where consumers would be able to simply tap mobile phones on payment terminals to make purchases. And then First Data announced a partnership with South Korea technology provider SK C&C that would position First Data to become a TSM (trusted services manager) -- a kind of go-between for smart card transactions

The key word is positioning. These companies seem to think that mobile payments will take off eventually and they want to be ready when it happens. And it WILL happen when consumers start clamoring for it. 

The revolution will be monetized

Advances in smart phone technology, coupled with recent actions by mobile payment technology providers, the payment card brands and mobile telecom companies, points to a time in the not-so-distant future when consumers, as well as merchants, will transact without cards or cash, but simply with their phones.

With my background in covering the payments industry, I hope to bring you the most up-to-date information on this exciting and profound transformation in the way we think about and pay for goods and services.

Remember, the revolution will be monitized.