Every part of the mobile supply chain is getting in on the mobile payments act. This is being driven not by technology, but by a shift in consumer behaviour.
The market for digital goods and virtual currency on its site is already
a billion-dollar one, but up until now, Facebook is capturing only a
fraction of the business.
The reason: it gives developers great freedom
to monetize their applications using whatever business models and
third-party services they think work best.
But that will be coming to an end this July as the world's largest social network looks to further boost its revenue growth.
By almost every reasonable measurement, Google's Android OS is giving Apple a reason to check the rear-view mirror. But for many developers, developing for Android is still somewhat unattractive because the common wisdom is that successful Android apps are likely to generate far less revenue than successful iPhone/iPad apps.
One of the possible reasons: paid Android apps are sold through Google Checkout, which Android critics argue offers a far less pleasant experience than the App Store purchasing experience offers iPhone and iPad owners.
Online payments behemoth PayPal thinks developers are key in its quest for world domination. Late last year, it launched a portfolio of new APIs that PayPal hopes will give developers the ability to create applications that extend PayPal's footprint into markets in which it believes its payment solutions could be better utilized.
But if the credit card associations have their way, PayPal will have to compete for the best developers.
Facebook has sat by and watched as prominent application developers
have made millions upon millions of dollars on its platform, primarily
through virtual currency. Not surprisingly, Facebook wants a piece of
the action and is moving to take a piece of the action.
But that may not be so easy if the results of early deal making efforts
are any indication. Application developer Zynga, which operates some of
the most popular social gaming apps on Facebook, including Farmville
and Mafia Wars, may leave Facebook and set up its own gaming social
network after negotiations with Facebook over the use of Facebook's
upcoming universal payments and credits system reportedly fell apart.
Smartphones have opened up the possibility of turning mobile devices into virtual wallets. And today, PayPal has made a big land grab for mobile payments with its new iPhone app.
In addition to making it easier to send and receive payments from a mobile device, the app uses Bump Technologies to let users share money instantly by touching phones. With more companies getting into mobile payments all the time, this could go a long way to help PayPal retain digital payment dominance. But there's one clear reason this won't replace cash.
What do Facebook, Gmail and iTunes have in common? By 2015, they might be dominant online payment providers.
At least that's the thinking of Dave McClure, a Silicon Valley startup
investor. In a post the other day (caution: heavy profanity), he argued
that "in 2015 the default login & payment method(s) on the web will
be Facebook Connect, Google Gmail, or Apple iTunes".
In a post last month, I pointed out that some of the most popular Web 2.0 companies still haven't figured out Customer Service 1.0.
Even though they're related, customer service is one thing and your money is another.
The UK's online retailers are missing out on potential sales because they are not offering a large enough range of payment methods, and 50% of regular online shoppers' will cancel their purchase if their desired method is not available.
So says a YouGov survey of 2,000 UK web users commissioned by ClickandBuy, which suggests that e-commerce sites should catch as many customers as possible by providing alternatives to credit or debit card payments.