POWA down, Zapp and CurrentC next?

powa downSo we’ve started to see the power houses fall. We first had the multiple failures of Google Wallet using NFC. Then we had the telcos club together to create Softcard (formerly ISIS) and Weve, both using NFC and both struggling. Softcard was eventually sold to Google for $100m, god knows why, and O2 have taken complete control of Weve since their O2 wallet, also using NFC, crumbled. We’ve now started the demise of the less institutional mobile payments companies with POWA (QRCode based), which is all but dead and buried, it’s now time to start thinking who’s next? and guess what they’re not start-ups.

First we start with Zapp in the UK. Zapp was launched in Autumn 2014 looking to take advantage of both QRCode based technology and NFC. They re-branded a number of times, each time doing a shoddy job. Vocalink has invested more than £33m in to Zapp with further investment from institution and private investors, taking their overall investment up to £75m and yet they’ve produced nothing! As mentioned they were originally taking on retail alongside Paypal and co, but now they’ve changed their plans to allow customers to basically pay online using a button that connects directly to their bank account and thus bypassing the card schemes. And the success? None, all this money and they’ve basically got a payment gateway that no one uses. £75m, hundreds of employees and they’ve produced something a coder in his back bedroom could do in a couple of months between masturbation sessions. Really…

Now we have CurrentC in the US. Great name by the way guys! The major retailers in America were being bent over a barrel by Apple, Google and the card schemes, so  7-Eleven, Alon Brands, Best Buy, CVS Health, Darden Restaurants, HMSHost, Hy-Vee, Lowe’s, Michaels, Publix, Sears Holdings, Shell Oil Products US, Sunoco, Target Corporation and Walmart clubbed together. The initial retailers that are part of the new company account for about $1 trillion in annual sales, because of this ‘This will be the success story’ I hear you cry, WRONG! What happens when you get so many chiefs around the table with egos the size of the universe, bugger all, that’s what! They all want things their way that no decisions ever get made and everyone leaves the room in a huff. So much so Walmart has put two fingers up to the rest and created their own version with Walmart Pay. Other reports suggest, CurrentC (trading style of MCX) are in big trouble. They’ve had tens of millions invested, they’ve struggled to get a solution that works and they’ve delayed launches more than 3 times. They’re now trialling a scaled back version in a hand full of stores, but it’s not even receiving lukewarm success.

downloadFor me the only real innovation to come out of mobile payments is LoopPay. These guys created an incredible product allowing users to use their mobile device to pay at more than 10m merchants, or 90 percent of retail locations in the US. LoopPay’s technology uses a metal coil to emit a magnetic field that can communicate to most card terminals. This basically means that holding the phone up against the part of the terminal reader where you usually swipe your card, it transmits a frequency that means the terminal thinks the cards has been swiped and the transaction goes through. Now for me…That’s innovation! In early 2015 Samsung bought LoopPay and has integrated this in to their new devices. Samsung bought LoopPay for roughly $250m and what a bargain they got themselves.

I’d love to know the nitty gritty of why these companies, who raise such big amounts, can’t tell their arses from their elbows. The frustrating thing, because of who they are, the businesses they are associated with and their friends at VC’s, Private Equity and Private Investors they are absorbing all the cash out there that real innovators and start-ups need. Just with the companies I’ve mentioned above there’s more than $700m invested and they’ve all produced absolutely nothing that’s changed the payment world. It’s about time investors, whether VC, Private Equity or Individuals pulled their heads out their arses and look at whether a business has a product rather than what a company is associated to or what someone’s done in the past at big companies. Maybe then mobile payments will see some real innovation rather than the flat joke it is today.

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Google should buy Twitter

At present Jack Dorsey, new CEO of Twitter, is facing a real up hill struggle to get people to see things his way. He rejoined Twitter October 2015 as CEO and since then he’s been sacking people left, right and centre trying to reduce that 3,800 unnecessary headcount (Think the ego has gone to his head a bit with the long shot comparisons to him and Steve Jobs). He’s been culling hundreds (more than 700) of jobs to cut costs at the over inflated Stock Market listed company. At present Twitters stock is a in a dive (and so is Square, Dorsey’s other Stock Market listed start-up), so much so that he’s now gone from Billionaire status to just multi, multi milionaire decreasing from $2.2b to little more than $800m. Tough time for Dorsey (I think not ;-)).

In my opinion Dorsey doesn’t have a problem with product, even though at present they keep trying to change the layout and features, which recently caused the hashtag #RIPTwitter. His problem is the fact that Twitter has no real source of income. Even though the company has never made a profit, never showed any real return to shareholders it still managed to list for Billions, yes BILLIONS in valuation (more than $33b), with the preconceive notion that it will one day make billions from advertising like Facebook. The reality has been extremely different with still no profits and no real way to advertise.

Google on the other hand has now admitted what a pointless endeavour Google+ has been. Although they have 2.2b registrations, which they basically cheated to get if you had a googlemail email, only 9% post on a regular basis. That’s only 198m posting on a monthly basis, which sounds a lot, but when you compare that to Facebook, which generates 4.5b likes with 300m pictures added per day and Twitter generating more than 320m monthly users and more than 1b unique visits monthly to sites with embedded Tweets, the 198m doesn’t sound very much any more.

Google usual purchases are around the $1b mark. As of December 13, 2013, Twitter had “a market capitalization of $32.76 billion” so buying Twitter would be a little out of their comfort zone. If a deal were to happen, it would be the second-biggest ever acquisition in technology, well ahead of Facebook’s $19bn (£13bn) purchase of WhatsApp in 2013 and behind only the $106bn AOL-Time Warner merger of January 2000.

Google has around $60bn in the bank, though a lot of that is stashed overseas to avoid taxes on repatriation; a share- or debt-funded acquisition might be simpler. Eric Schmidt, Google’s chairman (and chief executive through its fast-growth years), told Bloomberg in December 2014 that “the biggest mistake that I made was not anticipating the rise of the social networking phenomenon”. He added: “It’s not a mistake we’re going to make again. In our defence, we were working on many other things, but we should have been in that area, and I take responsibility for that.”

Some think Google’s problem with “social” is that its data-driven culture tends to be blind to the tweaks that make people love social networks. As mobile use is now dominant, social networks offer the most valuable advertising space. In the fourth quarter, 69% of Facebook’s advertising revenue came from mobile ads, up from 53% a year before; and revenues were up 49%.

Google, by contrast, has seen its cost-per-click (what advertisers pay when someone clicks on an ad) decline by 30% over the past four years as mobile use has grown, limiting its potential for revenue growth. Google, of course, relies on advertising for 90% of its revenues, and perhaps more of its income.

With social dominance, social data and everything in our lives becoming social from taking a picture with instagram and sending money with my new start-up Cendit Google has to do something to make sure these social giants don’t chip away too much of its market share to the point where it becomes a scary future for Google. This is a protection exercise more than money generating. Below are 5 things I think each party brings to each other, which would enable them to match or even surpass Facebook.

What Google brings to Twitter:
1) huge number of advertisers already using Google AdWords and AdSense
2) global reach
3) potential inclusion by default in Android mobile software
4) integration with YouTube for short and long video
5) resilient systems

What Twitter brings to Google:
1) highly engaged social network
2) users’ instant “sentiment data”
3) different dimension to “search”
4) mobile-optimised platform for advertising
5) positive reputation on privacy

I believe Google has made three attempts, thus far, to buy Twitter so they obviously see something there for them. I personally am a huge fan of both Twitter and Google. I use Twitter more than Facebook and use Google search a lot more than Bing at present. Having been lucky enough to have been around both campuses and know/met various ‘high ups’ at the companies they have a lot in common with their cultures, unless Dorsey has set about changing that as well. I believe Google would be a wonderful fit for the unprofitable Twitter and think the shareholders should embrace the opportunity should it arise seriously. Otherwise the question is: Will Twitter be here in 5 years time????

Windows 10 Lumia and Surface Launch

Yesterday we saw the launch of Microsoft Windows 10 Devices. The categories that most interested me, as I’m not a gamer were the 2 new Lumia’s, Surface Pro 4 and the Surface Book.

In this blog, 1 of 2, I want to talk about the Lumia 950 & 950xl. I was really quite disappointed and yet at the same time not surprised by the Lumia launch. For me this was a leftover from the Nokia overpayment. Fingers crossed the Lumia brand will disappear in the next 18 months as Microsoft, I believe, will release new flagship phones mid-late 2016.

I’m following the internet here and think the branding ‘Surface‘ is perfect for all their device names. It’s a cool name and forward thinking as it applies to every possible product they could create. It’s much better than Lumia.

950-940-800x450The phones themselves, are ugly. No real design has gone in to them like previous Lumia devices. For example I run the Lumia 930. It’s a great phone, good weight, great design with a great camera. The new Lumias 950 & 950xl not so much.

Other than how ugly they are I was really disappointed with the new feature of the sign-in. I realise that using the retina to sign-in is intriguing idea moving forward, however, according to other reviewers who have had the device in their hands, the phone has to be high up and close to the eye for it to work properly. For me it’s like the Google sign-in with your face feature it’s more a fad/cliche with no actual reasons to use it.

I’d have much preferred a stepping stone enhancement of finger print recognition to lock and unlock the phone like Google and especially the iPhone. As a man in Fintech I think it has been revolutionary of Apple to incorporate this in to the phone and I’d like to see Microsoft do the same.

android-features-heroI am also disappointed with the idea of linking the phone to a monitor and keyboard via a docking station. This may sound revolutionary, but Ubuntu have been doing this for years with their devices. Ubuntu even tried to raise a world record $32m for its Ubuntu Edge device, which actually looked really cool, think they managed to raised about $24m in the end. Not only did Ubuntu work with Android to make this happen, but Motorola got in on the action07-moto-webtop-accessories_610x377 with ‘Webtop’ that is available with your Android 4.0 Ice Cream Sandwich and up Motorola
devices. Not only could you link the Motorola Razr to a monitor and keyboard, but also a laptop.

The next step is quite obviously utilising the Cloud, especially Azure, with your mobile phone, I just expected more… but I don’t know what more… Maybe, like it always does, it comes down to the design of what they’re presenting. You have people working seriously hard to make products sexy and make us want to use them but the let down of how the Lumia’s looked really took the wind out of the sails for me and I think it will for their sales figures. And yes I did see there was a PUN opportunity, but come on reader you’re better than that.

Overall I’m looking forward to the hangover of Nokia sailing off in to the distance and seeing some great design coming in the next iterations and love the liquid cooling systems in the 950xl, but am still concerned with the potential of how hot it may get. I’ve personally sent 2 930’s back for overheating.

As a first mover on devices think I’ll have to wait for the next iteration of hopefully a SURFACE phone. However, don’t think this is the case for the Surface book or Pro 4.