Category: Payments systems

Google File Pay Model Retrieval Patent

We’ve been slightly slow on the uptake of this one – Susan Kuchinskas at InternetNews has picked up a US patent filing by Larry Page, co-founder of Google, and it makes interesting reading.

Google News is great for users – we’ve been a news source of theirs for a considerable amount of time and often use its search facilities for research. For Google it’s less great, as they’ve yet to find a way to make money out of it – thank goodness they took the automation path, by throwing tech at it, not people.

The patent, 20040122811, titled “Method for searching media” was originally filed in September 2003 and its core function is summarised by Susan,

to enable search of printed material, offer pay-per-view documents, scanned documents with clickable ads and even the ability for print publishers to swap out ads in digital copies of their printed pages.

There are two key elements of the patent: a method for executing a permission protocol so that the publisher could authorize Google to display more text from the relevant publication; and storing scanned versions of printed documents along with data sets representing the ads that went with them.

It’s not just online text that is covered. CDs, DVDs, audio books, hard copy magazines, newspapers and journals could all be included.

So how could Google make money from this? We find the most interesting idea the ability for them to act as the gateway to the content, charging a predetermined fee for access to the information that they would share with the publisher. Micropayment systems like BitPass and BT Click&Buy have been providing the charging mechanism to information publishers for a long time, and to a lesser degree, the ability to locate information you might be interested in. Google already own the search side, the additional income they could gain for collecting payments for content could be considerable.

Susan covers the innovative ways potential income from the advertising could be raised,

The patent claims a method for updating advertisement information for the printed documents. For example, it would allow the publisher of a hot news story to resell the ad space to a rotating series of advertisers or let advertisers keep the ad but update prices and product information. One of the claims, covers storing information about products in the ads. This might allow the advertiser to create a special landing page associated with the ad, working like a Web banner ad.

Internet News
BitPass
BT Click&Buy

Sales in Virtual Goods Surpasses $100m

Real-world trading based on virtual items is at least three years old, but it’s only now that researchers have estimated that online trading already rivals the gross domestic product of some small countries. According to an article publishing on NewScientist.com, the real figures are likely to be much higher, where virtual worlds are booming in China and Japan

The technology of real-world economies is based on the value of persistent world game characters and items. For example, you can buy Ultima Online and EverQuest characters on eBay, exchanging actual money for ‘imaginary’ game items, such as clothing and weaponry. Nevertheless, trade in these digital goods continues to grow, and it has already gone from being a pastime pursued only by a handful of hardcore gamers, to being a fledgling industry in its own right.

There’s even an online service to help players of online games trade their commodities more easily and freely. The Gaming Online Market (GOM) is a Canada-based online venture founded by Jamie Hale and Tom Merrall that aims to be the first true stock brokerage for online worlds. GOM currently allows players of online games to pay in US dollars, or exchange currency from one game to another at the current going rate. Before now, these have been trades restricted mainly to eBay auctions, along with all the risks associated with such transactions. Having said that, eBay facilitated the selling of $9 million in trades for Internet games last year (excluding Sony’s Everquest).

The coming together of real and online worlds has a far more widespread reach than games. For instance, virtual spaces will increasingly be used as assembly points to carry out business meetings and as physics simulators to experiment with building physical objects. Some companies are also using virtual worlds to try out design products, such as clothes, before attempting to market them in the real world.

Nokia’s First NFC Product – Why it’s Important

Nokia NFC shellNokia has lifted the lid on the world’s first NFC (Near Field Communication) equipped mobile phone by adding the special NFC clip-on shell to their 3220, a tri-band camera phone that is available in two versions (Euro/Asia & America). With its build-in NFC shell, the phone is the latest step in the development of innovative products for mobile communications.

NFC is essentially a contactless technology that allows for short-range two-way wireless connectivity using a tag and a reader. Developed jointly by Philips, Sony and Nokia, it is based on short-range (10 cm, 3.9”) radio frequency (RF) technology, an NFC-enabled mobile device lets you access services or operate your mobile device by placing it near a tag or share information by bringing two devices close  to each other. When you’re near a tag, your mobile phone reads the tags content by emitting a short-range radio signal that powers up the tag’s microchip, allowing you to execute an action, such as opening a Web page, calling a number, or sending an SMS. The opportunities for the Media business, in particular advertising are immediately obvious. People passing posters, wanting to find out more information are able to directly request it there and then, at the point of impulse. It could them be immediately delivered by bringing up a Web page of info or received via email for later consumption. Vivendi Universal has also trialed selling tickets to films, simply by placing the phone on a NFC spot on a film poster. Similarly, by communicating with an enabled device such as a TV, the mobile device can send a picture to it  It is currently unclear to us how much bandwidth will be offered by NFC, but we would assume it will be low, being more along the lines of ZigBee than Bluetooth. If this is the case, transferring a 1Mpx image will be a slow and painful process.

NFC is different from other contactless or RFID technologies in that it has a very short operating distance and also allows two devices to interconnect. The effective distance of an NFC solution depends on the tag design and the reader, but is only a few centimetres in Nokia’s solution.

The potential benefits of the technology include improved usability, easier access to services and content via physical objects, convenient sharing of digital items between devices by bringing them next to each other – such as swapping electronic business cards with clients – and local payment and ticketing capabilities. This has already been trialed in the Frankfurt transport system.

“Touch-based interactions will improve the consumer experience of existing services and create new opportunities for users to benefit from their phones. This technology has the potential to significantly improve the way operators provide and users discover and activate different mobile services,” said Gerhard Romen, Head of Market Development at Nokia Ventures Organisation. ‘By introducing the new Nokia NFC shell, Nokia clearly demonstrates strong commitment to offer users an intuitive wireless experience.” Samsung Electronics has also mentioned that it intends to manufacture NFC phones.


Tech Background to NFC – NFC technology evolved from a combination of contactless identification (RFID) and interconnection technologies. NFC operates in the 13.56MHz frequency range, over a distance of typically a few centimetres. NFC technology is standardised in ISO 18092, ISO 21481, ECMA (340, 352 and 356) and ETSI TS 102 190. NFC is also compatible with the broadly-established contactless smart card infrastructure based on ISO 14443 A, which is supported by Philips’ MIFARE technology and Sony’s FeliCa card.

Nokia 3220

Micropayments to be $60Bn by 2015 in Says Gartner

Gartner and many in the micropayment world, want companies to engage Zen-like, in a shift of consciousness regarding how their products and services are sold.

For those who don’t keep an eye on such things, a micro purchase is something you buy online for less than $5 by subscription, on-the-spot, invoiced or prepaid. “Apple’s iTunes music store was originally conceived as a driver for iPod sales, but it has become a shining example of how small electronic purchases can actually become a major revenue-driver for an entire company,” said Jackie Fenn, vice president and fellow at Gartner.

Gartner puts the acceleration down to three intersecting trends – the rise of networks making it easier for PC-based buyers and sellers to locate each other, the low cost of transactions handled electronically, and lastly, the increased usage and sophistication of automatic location identification for targeted content and services.

“Online marketplaces that gain critical mass, such as eBay and Craigslist, already provide an infrastructure to link buyers and sellers cost effectively” said Ms. Fenn at the Symposium. “In the same way that eBay makes it economical for a person in Boston to locate and buy a $10 teapot from another state or country, the emerging mobile delivery and payment infrastructure will provide a framework for buyers and sellers to connect for new types of micro services.”

It behoves organisations then to identify if they can leverage mobile and micro payment processes to economically deliver or consume services delivered in much smaller units.  And the infrastructure for doing this – micro payment systems, mobile connectivity, m-commerce on wireless networks, authentication, and more-granular products and services are becoming more and more firmly entrenched in the world of electronic business.

Zillions of people making tiny purchases would seem to be more significant from a global economics perspective, than millions of people making very large purchases. Micro commerce may be augmenting the revolution of the small spending masses, quietly sitting in front of their PCs in living rooms all over the world.

Gartner

Napster Take PayPal Payment

As an appetiser, Napster introduced pre-pay cards at Dixons’ stores across the UK earlier this month, in an effort to attract customers who don’t have a credit card. As the music business is fretting most about  teenagers downloading music, it would appear to make perfect sense to give them a payment method that allows them to pay for the music.  Now, the Los Angeles-based digital music provider has announced that customers in the United States, the United Kingdom and Canada can now pay for tunes using PayPal, using it to purchase monthly subscriptions or individual tracks and albums.  PayPal, owned by eBay is one of the largest payment handling companies on the Internet.

Napster obviously wants its payment options to be as convenient and accessible as its music download options. If you don’t already have a PayPal account, Napster will set one up for as part of its registration process, while existing customers can select the new payment option when they enter billing information.

The ultimate benefit of PayPal, which already has nearly 57 million customer accounts around the world, lies in its flexibility. It acts like a virtual wallet, allowing users to pay for products online with multiple funding options including a bank account, a credit card or an existing PayPal account. Other payment options on Napster, such as credit and debit cards as well as prepaid cards, will continue to be available.

Unless you have been living in a parallel universe, you will know that Napster popularised free music swapping over the Internet, primarily using the MP3 format, before turning into a legal music service. Now the popularity of legal downloading services like Napster and Apple Computer’s iTunes has resulted in a resurgence of interest in online transactions that use micropayments. 

iTunes still only accept the credit card, but no doubt they will now feel under pressure to offer an alternative payment method also, and are probably already talking to an online payment handling company as I write.

Napster
PayPal
Apple iTunes

QUICPay Using RFID in Tokyo Taxi Payment Trial

News reaches us that a Japanese credit card company, JCB International, is starting a two-month trial in November of a contactless payment system using mobile phones.  It’s called QUICPay and the guinea pigs will be taxi drivers in one of the world’s busiest cities, Tokyo. The exercise makes sense in Japan where it has been found that people use cell phones more than they use credit cards, and the Kanachu Hire taxi company will make contactless payment history.

QUICPay will be tested with NTT DoCoMo mobile wallet service handsets that are embedded with Sony’s FeliCa IC chip.  When the phone is presented within ten centimetres of the QUICPAY RFID (Radio Frequency ID) reader, it will determine the balance stored on the customer’s chip, automatically deduct the fare and reset the chip’s balance.  The QUICPay (“Quick and Useful IC Payment”) amount will then be billed to their existing credit card just like any other card purchase.

QUICPay can skip the authorisation process because it can instantly determine the balance that is available on the chip. The great thing about this system is its immediacy.  How often have the seconds turned to minutes and the minutes multiplied while you waited for the shop assistant to move heaven and earth to finalise your card transaction? In contrast to this a QUICPay offline payment transaction can be done in seconds and what’s more, no signature is required. 

While this trial is using only phones, it will be possible to embed the chip in a credit or other plastic cards in the future. If the experiment is successful JCB hopes to introduce the technology to convenience stores by 2006.

As far as we’re aware, there is no ‘keep the change’ option on QUICPay, so if the system becomes universal and moves us ever closer to a cashless society we’d better find another way of tipping.
 
Other mobile phone-based payment systems such as SimPay are being actively pursued. What isn’t clear is what transaction fees the handler will remove. Given it is all electronic, one would hope they would be negligible.

JCB International