Apple Pay Starts Today October 20, 2014 –So Why Should You Care?

 Why should you care about the Apple Pay launch?

Consumer Confidence in Mobile Purchasing is Growing

Apple iOS users are young: 60% are under age 45

Apple iOS users are wealthy: 7% have investable assets over $1 million

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Fraudsters Take Advantage as Mobile Convenience Outweighs Security for SMBs

The allure of both smartphones and tablets stems from convenience, pure and simple.  For SMBs, that convenience translates into greater productivity when using mobile devices to manage their business and their finances.  The situation is complicated by the effect that convenience has on the security posture of employees, especially those who are using their personal devices for business purposes (i.e., bring-your-own-device, or BYOD).  When convenience outweighs security, the scales tip to the detriment of SMBs.

What Javelin found in our most recent report is that when you combine mobile-accommodating businesses (who are chasing every productivity edge they can muster) with the intent of fraudsters (who take advantage of every security weakness they can find) that things become unpleasant in a hurry.  Besides having to manage the challenges of company-issued devices, there is also the evolving BYOD movement to contend with.  Without clear guidance on their roles and responsibilities around BYOD and confronted with mobile-specific threats that are overwhelming the security habits of their employees, mobile-accommodating SMBs experience significantly higher rates of payments fraud than average.  And size does not necessarily translate into mobile-security savvy, as middle-market businesses ($10M to $500M in revenue) are no better off than micro businesses ($100K to under $1M in revenue) and small businesses ($1M to under $10M in revenue).

This is where an SMB’s financial service provider comes in.  The mobile security posture of SMBs directly relates to the integrity of their accounts; educating these clients should be a priority because as the use of mobile grows, so does the risk of fraud.  In the SMB Payments Fraud Report, we discuss how to empower SMBs in the fight against fraud – providing them with an opportunity to protect their revenue, which in turn can bolster the relationship with their financial service provider.  We need to restore the balance between convenience and security, but we won’t succeed if we are blind as to how the scales are tipping and why.

10 Keys to Apple Pay: The Quick and Dirty Analysis

Apple Pay 2

Overall Analysis: Apple Pay is the most important mobile payment system to be released to date.

1)      Customers of Apple iOS are the most likely to buy with their phones (67% purchase using their phones), they spend 2X as often as a typical smartphone owner and they purchase higher dollar amounts with their phones ($25 vs. $20 median purchase). Apple iOS control almost half the existing consumer smartphone market (45% vs. 47% for Android) in the U.S. This bodes well for Apple Pay and provides an incentive for merchants to adopt Apple Pay. Read the rest of this entry »

Yes, I really did just accept an a position on the Consumer Advisory Board of the CFPB! (Consumer Financial Protection Bureau)

I just accepted a position on the Consumer Advisory Board of the CFPB. This will require several trips a year to Washington, DC along with several touch-points, and I’m looking forward to getting acquainted with the CFPB’s staff and other 24 Consumer Advisory Board (CAB) members. I have a lot to learn!

I can’t get enough of innovation and digital strategy. My 30 year career started in merchant e-commerce technology, with numerous product management/leadership/launch roles before moving over to product-innovation research some fifteen years ago. The CFPB was formed after the global financial services meltdown  Read the rest of this entry »

Square Peg, Square Hole

It was inevitable really that @Square would have come out with an EMV capable card reader sooner or later. Turns out it was sooner. Yesterday in fact. And in doing so, they answered a lot of lingering questions I had. Notably, how do you move from a business model built around distributing m-POS readers for free to one where the end user would have to pay for the device? My expectation was that the US would follow Europe with PIN pad readers that tether to mobile devices via Bluetooth. This would be quite a shock to the business model since these EU readers retail at around $99 per device. For the US small business that has grown accustomed to free(ish) card readers, this might well push them away from card transactions altogether.

Instead, Square has opted for a halfway house – an EMV reader that is not using PIN.  I asked Square via Twitter if the  reader was PIN capable and they replied…

@nickster2407 Hello, Nick. Right now we’re focused on the US which is a chip-and-signature market.

Actually, it’s not. Not yet anyway.

This decision to avoid PIN obviously keeps the bill of materials down and although we anticipate that Square can’t give these devices away, that the sticker shock for merchants will not be a deal breaker like a comparable PIN pad model. However, it also takes a lead in tipping the US to Chip and Signature (as preferred by Visa) rather than Chip and PIN (as preferred by retailers and the NRF). Just a reminder… Visa was part of the Series B investment of Square in 2011 to the tune of US$27.5 million.

While I think the decision for a Chip and Signature approach is more to do with maintaining the existing business model, it’s not difficult to connect the dots in terms of Visa’s chosen path for EMV and the devices that seed the market. EMV PIN isn’t dead, but this may precipitate a different course for US payment card security, further prolonging the bifurcation of the US vs. Rest Of The World.


In three years there will be a movie released, starring Jonah Hill. It’s about an ambitious and successful PR executive for an exciting new electronic payment system called “Ares” that’s set to revolutionize the way that people buy things with their phones. The name choice for the brand is made by a small and forceful CEO with an obsession with Greek mythology and LARPING, played by Danny DeVito.

Ares isn’t doing that great as a payment company. They backed the wrong horse technologically, have failed to excite the public and have experienced a few directional SNAFUs with ill conceived publicity stunts re-enacting scenes from 300 in a shopping mall in Denver, but they are finally on the cusp of going bigtime. Danny DeVito utters the line… “nothing can stop us now”.


While Ares has been focusing on winning hearts and minds in the US, another Ares has had a similar idea in the Middle East – “Al Reprehensible Extremist Sect”. This Ares is taking over great swathes of Syria and Iraq through anti-Western sentiment and a significant amount of bloodshed.

Faced with a PR disaster (who wants to be reminded of torture and execution when paying for groceries?), Danny De Vito insists that Jonah Hill heads to the Middle East to commence talks with the leader of Ares, accompanied by a plucky British payments analyst (probably played by Simon Pegg). Through various high jinks and inexplicable random acts, the sect leader embraces Western payments and ends up taking a position as CMO at one of the top 5 US FIs, Jonah Hill wins the day and the British payments analyst elopes with a camel.

Reality is very often stranger than fiction. In terms of things that Isis really didn’t see coming, having your brand kidnapped by a terrorist network with a better social media presence is probably not one of them. I really don’t know where they go from here. In fact, it’s hard to imagine a PR disaster in recent times that could be worse. Given the level of concern that Isis currently has (a survey is going round their users to assess the extent of the damage) and the already shaky ground that they have been on for a few years (how much money have AT&T, T-Mobile and Verizon burnt on this already?), I expect there to be a do-over, with a new name and a fresh start at relaunching. In the meantime, a couple of thoughts on launching a payment company…

  • Acronyms are dangerous. If you’re thinking of giving your company a short name of three or four letters, then a cursory search on Wikipedia might be a good idea to make sure you’re aren’t sharing it with a gastrointestinal parasite or white supremacist group. The Electronic Transactions Association shares their acronym with a Basque separatist group, but they seem to get away with that because no one in the US knows or cares about a small enclave between France and Spain and besides, Jason Oxman is very nice.
  • Don’t pick a name that sounds symbolic, particularly of historic struggles. If we have learnt anything in recent years, it’s that terrorists love symbolism and pick names like Al Qaida and Taliban for that reason. Instead, choose a name that is benign and pedestrian, like Kabbage or Oink. Clearly no self respecting terrorist network would want to be called Oink. Or BlingNation.
  • Think globally, act globally. Could Isis have anticipated this? Actually, yes. This has been simmering in the background of global news for a couple of years, but they’ve been so wrapped up with getting people on their network that collective myopia has placed them where they are today.

Schadenfreude? A little. But I think there is still time for Isis to recover and they still might have a place at the table when NFC finally happens in around 2018. And just look at PayPal*  - they managed to survive with their name and brand intact despite recent crises in the Catholic church…

*PayPal / Papal. Geddit?