Pay As You Go

Thus far, this has been a pretty “mobilized” summer, with news breaking every day about the increasingly important role mobile computing is playing in our business and personal lives.

Today, we heard about the new Samsung Galaxy 10.1 tablet (even Walt Mossberg kinda likes it!), and TechMeme has early screenshots and guestimates about what the newer, smaller iPad’s going to look like.

But devices aren’t the whole picture. Infrastructure, application lifecycle management, security and privacy, and other related issues are key to mobile success. And, until these devices are enabled with an easier payment capability, money will be left on the table.

Lots of it.

Ironically, it’s been Apple that has been the closest to providing such a system thus far, with their Apple ID linkage to our credit cards.  But that’s just for the stuff I buy from Apple…what about everybody else?

So today, the Wall Street Journal’s Robin Sidel explained that more than a dozen big merchants are expecting to announce their plans to develop a mobile-payments network that would go up against the likes of Google.

Called the “Merchant Customer Exchange,” the new venture is being led by Wal-Mart, Target, 7-Eleven Inc., and Sunoco, and will attempt to find its way to a more standarized mobile payment system.

Though this may move may be an intended counter to Google’s Wallet capability on the Android platform, Sidel’s story reminds us we also have another joint venture called Isis, led by a number of telcos, as well as the recent $25 million investment by Starbucks in mobile payment start-up Square, also in the running.

And of course, let’s not forget some of those other existing systems which have millions of credit card accounts, including Amazon, whose 1-Click payment capability stands apart, and PayPal, with their unique person-to-person payments capability.

In this emerging roulette wheel of mobile payments, I’m not quite sure where I’d place my bets just yet, as the wheel’s just getting going.

But there’s a lot at stake.

I just attended comScore’s quarterly webcast on the “State of the U.S. Online Retail Economy.” For the second quarter of this year, nearly one in ten of all e-commerce dollars spent were done so via a mobile or tablet device.

Moreover, nearly two in five tablet owners have purchased something online via their device in the past month (a number more than double of that of smartphone owners).

One wonders if that smartphone purchasing number might not be a few percentage points higher were it easier to hand over one’s payment information via smartphone handsets.

Looking at the bigger picture for a moment, comScore also reported in the webcast that the channel shift to online appears to be accelerating, with online sales overall up 15 percent for the quarter, while on a comparable category basis, offline sales only increased two percent.

At the forthcoming IBM Smarter Commerce Global Summit in Orlando (see this post for more details), IBM has some 20+ sessions that contain a mobile component, including one entitled “Mobile Payments, An IBM POV” (IB-3440).

That event will be held September 5-7 at the Walt Disney Swan and Dolphin Resort in Orlando, Florida, and you can learn more about it here.

i’m lovin’ it!

IBM announced earlier today it signed a three year agreement with McDonald’s to provide a new cashless payment solution for 1,300 McDonald’s owned and franchised restaurants across the UK and Ireland.

IBM will help McDonald’s cater to the growing number of customers using credit and debit card payments by introducing an improved system that will be operational by the end of 2010.

With McDonald’s restaurants serving millions of customers every day, the IBM solution is expected to allow McDonald’s to continue improving customer experience at the counter by increasing the speed, flexibility and security of service.

Hearkening back to our security discussion in the previous post (which was, and I can’t make this stuff, titled “My Big Hack Attack.”  And I swear I had no advanced notice of this cool Mickey D’s announcement. Seriously!), McDonald’s existing strong levels of security will be enhanced even further with anti-tamper and fraud detection software installed on hand held chip and pin devices to help protect customer card payments.

The solution is going to also help McDonald’s find smarter ways to run its day-to-day operations more efficiently by centralizing business processes onto one database enabling automated settlement and reporting.

By installing these new processes, McDonald’s is also empowering its franchisees, the independent businessmen and women who own and operate the majority of McDonald’s restaurants, to view and query their own customer card data so any issues can be quickly resolved.

IBM will provide business and technology consulting services to integrate and maintain the payment solution which is being designed and built around the McDonald’s point of sale terminal. Following the launch of the new solution, IBM will host and support McDonald’s entire payment system in a secure UK data center.

The solution will be based around IBM’s StorePay and Sureswitch products to provide a complete payment service that extends from the hand held chip and pin device in the restaurant through to the back end processing on a pair of highly available IBM System p servers, which are monitored and managed by IBM’s UK Infrastructure Management Center.

The deal was signed in June 2010 and is part of a multi-phase project spread over three years to continue transforming McDonald’s payment systems.

No word yet on whether or not Ronald McDonald will get his own hand held device, but I figure the chances are good.