Mobile Payments: A Developer’s Guide To Processing Money

This is an excerpt of a white paper I wrote for The Application Developers Alliance.

Earlier this year, Forbes.com contributor Gene Marks asked a question that gets to the heart of commercial transactions in the digital age: “With all the advances in technology, and all the things our smartphones do, why aren’t we paying for everything using a mobile app?”

Mobile PaymentsMarks posed the question in the context of his prediction that Starbucks will be the “kingmaker” in the world of mobile payments, but until there is a king, app makers and companies that wish to leverage mobile devices to sell their products and services face many choices. They have to decide how to collect money, which operating systems to use, and which payment providers have the friendliest fee structures, best support and most security.

Xconomy Deputy Editor Gregory Huang captured the essence of the challenge. “There are so many players coming in from different angles and at different levels of the value chain,” he wrote. “Besides all the techies with apps and software platforms, you’ve got retailers, brands, banks, credit card companies, payment-processing firms, and a slew of loyalty and rewards programs, all vying for a piece of the pie.”

This guide will define the current state of the mobile payments landscape, which continues to evolve rapidly, and help players in the app industry explore their options.

The methods to mobile payment prosperity
The term mobile payments has many different meanings, from consumers using smartphones or tablets instead of their laptops to make purchases from their homes to merchants swiping credit cards on tablets or smartphones. But none of them are mainstream yet by any stretch.

The third annual Global Mobile Payments Index released in January found that such payments comprise only about 20 percent of global transactions. But that figure was up from 13 percent of transactions the previous year, a growth rate of 55 percent. The index is based on data for transactions made through Ayden, which processes payments for more than 3,500 medium, large and enterprise-sized organizations mainly operating multi-national businesses.

The realities of modern culture are certainly favorable toward even greater adoption of mobile payments. According to the Pew Internet and American Life Project, 90 percent of Americans have cell phones, 58 percent have smartphones, 42 percent own tablet computers and 32 percent own e-readers. Research by BI Intelligence tells a similar global story, noting that consumers around the world have purchased 1.3 billion smartphones in just four years — and the penetration of tablet devices into the market is double what it has been for smartphones.

Read the full paper in PDF format.

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The Challenge Of Cross-platform Development

AppAlliance_Device Fragmentation This is an excerpt of a white paper I wrote for The Application Developers Alliance.

You might think that in a perfect world, application developers would write code just once and it would run everywhere. But that mobile utopia doesn’t exist. Instead, developers practice their craft in a digital universe that includes multiple versions of competing operating systems and thousands of devices in various screen sizes.

This fragmentation forces developers and the companies that hire them to answer tough questions every time they imagine the next big thing: Should they build for one operating system over another? Should they develop only for the big two, Android and iOS? If so, should they build the apps simultaneously, and should they design one app for both or two different apps for the two platforms? Should they use tools designed to streamline cross-platform development? How should they test the app for the hundreds of Android options? Or should they go to the Web via HTML5?

All of those questions and more are behind the mobile industry’s pursuit of interoperability, the term that describes the ability of apps to work on numerous devices and platforms. “Right now it’s frustrating,” said Peter Braxton, the founder and CEO of Jump Rope Inc. “For someone who’s trying to build a business and presence on different platforms, it’s really hard because it’s additional investment in resources, both time and capital, each time you encounter a new platform.”

Pure interoperability is not technically possible. It also doesn’t consider the cultural, regional and language differences of customers, or their preferred user experiences or devices. Every market has its own peculiarities (try asking a Finnish person to fill in the “State” field in an address form); every device has its own style. In short, there are many reasons to have different versions of an app for different devices, markets and groups of users.

That being said, app makers have sound business reasons to maximize the available market for an app without technical constraints. This white paper defines the challenge, explains why it matters and discusses the options available to developers, including tools to help both developers and non-developers build interoperable products more quickly. The paper concludes with case studies based on the efforts of several experts in the app industry to achieve interoperability or help others do so.

Read the full paper and case studies.

Monetization: Picking The Path To App Profitability

Monetization White PaperThis is an excerpt of a white paper I wrote for The Application Developers Alliance.

Developers get their motivation to build from a passion that is equal parts creativity and innovation, but to a certain extent, the bottom line to success is the bottom line. Those who make money on their applications get the resources they need to fund future creative projects. As CEO of HitFox Group Jan Beckers says, “Monetization is survival.” The best way to make sure that happens is to map a path to monetization for each app well before it hits the market.

One of the first questions to answer is whether to put a price on the app or rely on in-app purchases, advertising or other approaches to generate revenue. As AppMuse CEO Mark Stetler noted last year, “The mobile app ecosystem is steadily trending to a point where the free mobile app is the rule rather than the exception.” Developers also have to decide where to sell their products — exclusively in one of the top app stores, in third-party venues, in specialized markets, or a cross multiple platforms.

The advantages and disadvantages of each monetization strategy vary from app to app. This paper explores the many options to help app makers streamline the decision process.

The big decision — App Store, Google Play or both
Realtors love to say the three most important factors in marketing a property are “location, location, location.” Their mantra sounds a lot like the question app makers ponder every time they imagine a new product: “Locations, locations, locations — which ones will lure people to the revolutionary invention I’m about to build?”

The two most important locations are Apple’s App Store and Google Play, the top marketplaces for the iOS and Android systems. Most developers will build for one operating system or the other because of their dominance — 91 percent of the global smartphone market in 2012, according to International Data Corp. — and perhaps both.

Developers have more than 500 million reasons to consider the App Store. That’s how many iOS devices Apple had sold as of last December, including 75 million in the fourth quarter of 2012 alone. The operating system is limited to Apple devices, but app consumers can choose from an array of those — multiple generations of the iPad and new iPad Mini, the iPhone, the iPod Touch, and even Apple TV.

The App Store appeals to developers because of its size. At more than 800,000 apps as of January, it is the largest store. The 23 categories also give users the broadest selection of apps. They have downloaded more than 40 billion of them over the years, activity that has generated payouts of more than $7 billion to developers.

Some developers don’t like the App Store’s “walled garden,” which requires them to get Apple’s advance approval to market apps. But DLP Mobile CEO Zak Tanjeloff sees a money-making advantage in that approach. “The App Store has a higher proportion of quality apps, thanks to the approval process,” he said. “That means developers can, and have, charged more for their apps.” He added that consumers see the App Store as “a safe community” because of its connection to the iTunes payment process.

But developers definitely should consider the restrictive nature of the App Store when plotting their monetization strategies. To win Apple’s endorsement, app makers have to adhere to guidelines that cover user experience, functionality, content and the use of specific technologies. Companies that want to give their apps away for free and instead make their money on in-app purchases also may not make the App Store cut. Once apps are in the store, they face additional reviews for every update.

Read the full paper in PDF format.

Discoverability: How To Get Noticed In A Market Overflowing With Apps

Discoverability White PaperThis is an excerpt of a white paper I wrote for The Application Developers Alliance.

If an app drops in the store and no one is around to see it, does it make a profit? The answer is no, and therein lies one of the major challenges facing application developers today.

Developers can make the most innovative app of the year or perhaps the decade, but if consumers cannot find it because of marketing obstacles, all of the engineering prowess will be for naught. What good is an angry bird without gamers to fling it from a slingshot or an Instagram without amateur photographers to capture nostalgic memories and share them?

Discoverability matters. It is as central to successful app ventures as the creative genius behind great apps. This paper identifies the challenges that developers and companies face in getting their apps before the right audiences, explores the current options available to do so and proposes solutions for optimizing discoverability.

The discoverability challenge
The app marketplace is immense. The virtual shelves in the major app stores are flush with about 1.5 million products, with more on the way every day. The download data is even more intimidating to developers hoping to be discovered. Consumers downloaded more than 40 billion apps between 2008 and mid-2012, but experts estimate that half of the business goes to only 0.1 percent of the available apps.

When the analytics provider Distimo released new data about apps in December, it rightly concluded that the exploding growth in the marketplace makes it more difficult for new developers to have their work discovered. Last July, the new Apptrace tool found that 400,000 of the then-650,000 iOS apps were “zombies” that had not been downloaded even once.

But even overcoming the download hurdle does not ensure success. While nearly 1 billion apps get added to devices every month, one in four of them are never used again.

The challenge also is daunting because consumers head primarily to overstocked app stores to shop. David Gill, vice president of emerging media at Nielsen, said his firm’s research found that 53 percent of app shoppers learn about products in app stores, which favor existing apps that have been installed often and recently over new apps.Add to that reality the short attention span of app consumers — they typically spend just three to 10 minutes shopping for each product — and it’s clear that guiding consumers to any given app can be like drawing them a map to a needle in a haystack.

“Consumers have a hard time finding good apps,” Appsfire co-founder Ouriel Ohayon wrote last year at GigaOm. “But, paradoxically, they don’t care enough to read reviews, compare apps or even search for apps. On mobile people are lazy.”

Read the full paper in PDF format.

Book Review: ‘Digital Assassination’

Originally published at The Washington Times
Ghostwritten by K. Daniel Glover

The Internet is a boundless universe of information and connections that fuels the economy, enhances world culture and fosters democracy. But it also is home to digital assassins who lurk undetected and lob verbal, visual and technological grenades to ruin reputations — and enlist others via social media to achieve their evil ends more quickly.

That’s the ugly reality of online life as painted by Richard Torrenzano and Mark Davis in their new book, “Digital Assassination: Protecting Your Reputation, Brand or Business Against Online Attacks.” It’s a largely accurate portrayal — one that brands, businesspeople and public officials must take seriously if they want to thrive in today’s digital age.

Torrenzano and Davis at times go overboard in their rhetoric, particularly when it comes to blogs and social media. They also give too much credit to journalists for having kept character assassination in check during the 20th century. The chapter on “truth remix,” for example, is based in part on the prejudicial and flawed premise that “traditional media has been replaced by a blogosphere that creates falsities out of truth in order to compete for ratings and clicks.”

But the authors are not Luddites. They repeatedly emphasize that we humans are the problem and that modern technology has merely increased our capacity for lies, deceit and uncommon cruelty motivated by greed, jealousy and other character flaws. They identify parallels between character attacks of the low-tech past and the high-tech present to prove the point.

“This power of the new digital assassin to destroy is as powerful as YouTube but as old as civilization,” Torrenzano and Davis write. Their aim is to illustrate the depth, reach and speed of that amplified power and to teach people how to fight back.

Read the full review at The Washington Times.

Judging Social: Modern Media In Court

Reprinted from Justice 2.0, a blog about social media in the courts
By K. Daniel Glover

The man who represents himself in court may well have a fool for a client, but the Indiana Supreme Court is doing its part to make sure that man is a little less foolish.

Over the past few years, the court has been producing Internet videos aimed at educating people who choose to represent themselves. The series includes introductory lessons, specific tips for various stages of the legal process and topical videos on subjects like children and divorce. Some of the clips have more than 10,000 views each.

Online videos like those on the Indiana high court’s YouTube channel are just one technique that courts — and some judges — are using to expand their communications horizons. As more people go to social media for information, the judicial branch is getting social to reach them.

“There’s widespread interest in the topic in the court community,” said Chris Davey, the public information director for Ohio’s Supreme Court. He has been spearheading research of social media in the courts for the Conference of Court Public Information Officers. “Almost every day there are courts that are starting to use some form of social media.”

Even the International Criminal Court has a Twitter account and YouTube channel.

The 21st-century court reporter
The Indiana Supreme Court is one of several U.S. courts on Twitter, a move that PIO Kathryn Dolan credits to changing media realities — and to her boss Chief Justice Randall Shepherd, whom she calls “a newspaperman at heart.”

“What we’re seeing nationally and globally is obviously a shift in how people consume news,” Dolan said. “They decide what they want to hear and learn about and go directly to the source in many cases. And we felt that it was important to provide that information and that means for them to gather that information directly from us.”
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Trial By Twitter: Real-time Court Coverage

Reprinted from Justice 2.0, a blog about social media in the courts
By K. Daniel Glover

Helen Ubinas was a lone voice tweeting in a media wilderness in January 2010. The Harford Courant columnist was the only journalist reporting in real time via Twitter during jury selection of a high-profile murder trial — an experiment she began by happenstance when the reactions of potential jurors intrigued her.

“Mostly I thought I was ‘talking’ to myself, just jotting down impressions of the young woman who broke down crying when she saw Hayes, the high-stakes lawyering taking place, etc.,” Ubinas said in an email interview. “But suddenly people started to follow me — and they began sending messages. I realized quickly that people were very interested in the case, in the judicial system. They wanted every single detail.”

By the time the jury found Steven Hayes guilty of killing three people in Cheshire, Conn., Ubinas was one of a half-dozen reporters covering the case live in news blurbs and sound bites of 140 characters or less. Their work amassed such a following that Hayes’ defense team blamed Twitter for creating a “circus atmosphere,” and the second defendant in the murder case, Joshua Komisarjevsky, later tried to keep tweeters out of the courtroom.

The reporter’s notebook online
The Cheshire murder trials highlight the increasing significance of Twitter both as a news tool in general and as a great gadget for covering trials in particular. Journalists can report dramatic testimony, legal maneuverings and more as soon as they happen, and they can do it in more detail than traditional media allow.

High-profile trials such as the Cheshire case and the federal corruption trial of former Gov. Rod Blagojevich, D-Ill., attract the most attention. But some local court reporters have made Twitter part of their daily routines.

The value of live-tweeting trials quickly becomes apparent to journalists who try it. They hear from crime-news junkies, lawyers involved in trials and especially family members of crime victims. “Family members who could not be in court thanked me for making it possible for them to ‘be there,'” Ubinas said of both the Hayes trial and another one she tweeted more recently.
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The Era Of Gizmo Government

Originally published by American Issues Project
By K. Daniel Glover

When I served as the managing editor of National Journal’s Technology Daily, I spotted an apparent trend in federal spending — more money going toward tech-related pork projects.

A time-intensive search of keywords in several editions of the annual “Pig Book” produced by Citizens Against Government Waste confirmed my suspicions. There were only a handful of tech-related earmarks in the mid-1990s, but the numbers started climbing in fiscal 1999 and soared in subsequent years.

That initial investigative research ultimately led to a series of stories in 2004 about Congress’ newfound obsession with tech pork — everything from “business incubators” and data-sharing systems to technologies for law enforcement and schools. Oh, and don’t forget the $16,000 that Uncle Sam spent for interactive displays at the National Distance Running Hall of Fame, which is sponsored by an entity now partially owned by the taxpayers, General Motors.

Five years later, lawmakers haven’t whetted their appetite for tech-related pork. The proof is in the 76-page list of proposed earmarks for fiscal 2010 recently released by the House Appropriations Committee (hat tip to The Club For Growth).

The list is chock-full of tech goodies for major metropolitan areas and small villages alike, as well as for large universities and small colleges.

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No Net Tax Gains … Or No Net Taxes

Originally published by American Issues Project
By K. Daniel Glover

Politicians and bureaucrats love taxes. If you build it, they will tax it. They’ll do the same if you buy it, sell it, drive it, eat it, drink it or smoke it. The National Tax Foundation captured the governmental tax spirit perfectly last week in a spoof video called the “Nanny Tax Rap.”

The government’s penchant for taxing anything and everything explains why hundreds of thousands of Americans rallied at “tea parties” on Tax Day last month to protest taxes and spending. It also explains the opposition to new taxes on Internet sales.

But fans of free markets and tax reform shouldn’t impulsively dismiss the Internet tax movement. Instead, they should consider embracing it as an opportunity to deter money-grubbing state and local officials from raiding the wallets of their constituents every time they get in a tight spot.

Back in 1989, the first Bush administration imposed a no-net-loss policy for wetlands. In 21st-century America, it’s time for a no-net-gains policy for taxes, and the latest push to start taxing Internet sales provides a big opening to pursue that goal.

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Did Fred Thompson Lose His Way Online?

Originally published at Beltway Blogroll

About a year ago, Fred Thompson began making a presidential splash online.

After bloggers started talking up the possibilities of the actor and former Republican senator running for president, Thompson won a high-profile endorsement from a fellow Tennessean, former Senate Majority Leader Bill Frist. Then all of a sudden, Thompson started popping up all over the Internet.

He posted a guest blog entry on RedState and earned mainstream media attention for “blogging up a storm“; he picked a public video fight with liberal filmmaker Michael Moore; and he tapped some big names in new media to help spearhead his online activities.

I even mentioned Thompson’s online non-campaign as a “bright spot” in GOP e-politics when interviewed by The Washington Post.

All of that early work on the Web came to naught this week when Thompson ended his presidential campaign (arguably a bit too soon), and one blogger thinks Thompson faltered because he lost his innovative way.

Thompson “was strong with new media, but then he abandoned it. … I don’t know what happened,” Roger Simon, the head of Pajamas Media, told The Washington Times. “I think some of the misfire of his campaign is that he didn’t stay with that initial impulse.”

I’m not sure how on the mark that analysis is. Thompson’s campaign seems to have faltered for more traditional reasons — poor strategy, bad staffing decisions, lousy timing (he took forever to get into the race), lack of money and the failure to overcome the image of Thompson as a lazy campaigner. But the reality is that Thompson’s approach to the race changed after he became an official candidate.

That probably had more to do with the realities of presidential campaigning than a conscious decision to go old school. Who has time to blog when traveling across the country to greet voters and raise money? But the end result is that the man who once held out promise of becoming the nation’s first blogger-in-chief finished the GOP race as a disappointing also-ran.