Evan Schuman's StorefrontBacktalk

Disneyland Paris is planning to test contactless payments with cards and near field communication (NFC) phones this fall and, unlike so many others that have dabbled in these trials, it is offering discounts and loaning phones to boost participation. We’ve asserted people won’t bother with contactless payments unless they get a benefit beyond the questionable convenience usually touted by those pushing it. Only a handful of retailers, including Dairy Queen, have dangled carrots, such as discounts, to push contactless.

According to a report in Near Field Communications World, the resort is offering 25 percent discounts at Disneyland shops and 20 percent discounts at restaurants to patrons who use their NFC phones or contactless cards to make payments in the shops and restaurants. The trial, set to begin in October, will be available to those with annual passes to the resort who also have accounts in the Paris area branches of two French banks. Prospective users must first fill-out online applications. The people wishing to try NFC will be issued an NFC phone that must be returned when the trial concludes. This also addresses—or, more precisely, sidesteps—concerns about hardware differences with NFC devices. By handing out the phones, Disney is guaranteeing that hardware differences won’t impact their trial results.…

A MasterCard spokesman wouldn't commit to the card brand accepting such transactions as "card present," at least not at this point. It's early—MasterCard and Intel expect to get all the authentication issues nailed down by 2012, with actual payments by laptop-owning online shoppers starting shortly thereafter. But anything that uses built-in hardware to close the gulf between the retailer and the physical card should help push interchange rates down.Read more...

According to a copy of a report that Discover prepared about its initial trial results, 69 percent of those participating in the Zip trial wanted the sticker hidden. "The pilot management team was impressed by the creativity demonstrated by participants in finding various ways of hiding stickers under the phone’s protective case ("skin”), under the battery cover and other unseen yet convenient locations."Read more...

But the key issue has consistently been much simpler. Unlike other forms of consumer-issued RFID devices—such as EZPass and even the keyless entry systems of some newer cars—typical contactless payment methods have not given consumers any real reason to use them. With no significant convenience or cost-savings issue, one need not look too far to figure out why contactless is struggling in many sectors.Read more...

The adoption of contactless by a retailer of Carrefour's size "is one of the largest victories so far" and a "very positive win" for contactless technology, said Forrester Research Analyst Ed Kountz. "It's looking like we are going to see more deployments in Europe. It's also being done well in Turkey, of all places, and Asia really remains the number one market for contactless payments."Read more...

The key argument of the report is that none of the three groups of companies involved—the card brands, the issuing banks and key retailers—is spending the dollars to create true incentives to make contactless payment work, said lead report author Bruce Cundiff, who is Javelin's director of payments research. "There is no effective value proposition for merchants and for wireless carriers," Cundiff said. Read more...

When IT managers at the $2.5 billion Jack-in-the-Box fastfood chain started looking at contactless payment issues this year, it was clear that the RFID-enabled credit cards would be more than a faster way to get customers processed. It would add to the 2,000-restaurant chain's coolness factor and give young customers another reason to check out the chain. This is especially the case with the demographic that fast-food managers most want to cultivate: 18-34-year-old men.

But taking the next traditional step—limited trials in a handful of carefully-watched locations—wasn't going to make the bold statement needed. The company opted instead to immediately rollout out contactless payment to every one of the chain's restaurants—both for the 1,400 restaurants they own and about 600 that are franchised—in 17 states.Read more...

But the real problem—Visa's death-grip on payments—isn't one any lawsuit will solve. Big retailers abandoned their store cards because taking Visa was cheaper than maintaining their own credit infrastructure. Now Visa is holding all the cards, and chains are unenthusiastic about any of the alternatives.Read more...

The good news: no Google-style POS changes required, at least not to meet Microsoft specs. The bad news: no help from Microsoft, either. Unless you build your own in-store shopping app, the Microsoft Wallet will basically do contactless card emulation—and not much more.Read more...

As E-tailers continue their incursions into rivals’ physical stores, the only viable defense is to radically upgrade customer service and the overall store experience. Two of the retailers most known for this are Apple and Walt Disney World Resort. Have you ever heard of an E-Commerce site cutting into the revenue at Disney? What specific tactics can brick-and-mortars steal? Here’s a good one: Disney this month is experimenting with an RFID/iPad combo to upgrade its famous FastPass system—for letting people reserve tickets/times and thereby get much faster access to rides and events. As Disney employees carry iPads, customers’ RFID bracelets will interact with CRM and ride information.

It’s fair to argue that Disney has always been the retail exception. It pushed contactless payment by offering deep discounts, and Disney even successfully got customers to use digital biometrics (fingerprints) for park access. But that’s just the point. With a heavy enough emphasis on experience and customer service, shoppers are willing to do almost anything, including—just perhaps—forgetting all about Amazon.…

For example: Where should the QR codes be placed? Should it be near the bottom of the screen? Well, what if the consumer time-shifts with a DVR or Tivo? A part of the code could be overridden by screen buttons. Place it in a glossy magazine? Good choice, but you have to steer clear of the page side toward any glued (perfect-bound) gutter or else consumers won't be able to get a full scan of the image.Read more...

But the limited four-day experiment also demonstrated the many QR drawbacks that retailers have to struggle with. A reporter for Forbes, for example, tried making a purchase during the event through a QR code and found that her couch was 10 feet away from the screen but that she had to get up to scan the code from five feet away. People who successfully navigated the QR code got to an ordinary Web site page. No discount, no special reward. And how long would the code be displayed? Then there's the learning curve.Read more...

In the past, when the card brands wanted merchants to introduce new technology, they offered incentive (i.e., lower) interchange rates. This time, Visa is offering no interchange fee discount. Instead, the incentive is the opportunity for Level 1 and some Level 2 merchants (those with more than one million Visa transactions a year) to reduce the cost of their outside assessments. Bottom line: the Technology Innovation Program (TIP) doesn't cost Visa or its issuers a penny. Before, issuers paid for merchants to implement new technology (e.g., TIIF and TIIF2 incentive interchange rates). Now they are saying, "Hey, we'll keep the interchange but save you having to pay QSAs. But if you get breached, the same fines apply." Neat. They're transferring who pays.Read more...

The key question: Why will consumers be more open to this Google NFC effort than they have been with contactless payment? Presumably, Google and the retailers will be smart enough to flood consumers in the selected cities—New York, San Francisco, Los Angeles, Chicago and Washington, D.C., according to Bloomberg—with seriously generous discount coupons to give them a compelling reason to change their buying behavior and try NFC. Some have argued that the trick of making NFC work will not be in a strengths/weaknesses battle with rectangular pieces of plastic, but in the power of the mobile phone to be comprehensive.Read more...

Let's not overlook the tons of wonderful capabilities native NFC on popular handsets could offer retail by getting fixated on one—mobile payment—that has quite a few other challenges.Read more...

Target, for example, has decided that its in-house payment cards are a priority, so it's trialing a program in Kansas City that—in part—offers customers who use the card "5 percent off on every item, every transaction, everyday," Target CFO Doug Scovanner told analysts in a Tuesday (Feb. 23) conference call discussing the chain’s earnings.Read more...

But when those consumers return to that Dairy Queen with those tags stuck to their wallets, their watchbands or the back of their cellphones, identical those tags shall be no more. Given the differing purchase histories of each customer, the tags will deliver sharply different discounts and offers. In effect, the tags will serve as digital coupons as well as makeshift CRM/loyalty programs.Read more...

"After dozens of failed projects in the last ten years, the time is ripe for payments by mobile phone at retailers' checkouts," said the report. "Powerful initiatives in France and the Netherlands, initiated by the likes of Carrefour, Ahold and Auchan, may be strong enough to set European, perhaps even global, standards for mobile phone payments."Read more...

Visa is running a mobile phone trial where consumers will be able to transfer money using their phones to any other Visa user. “The pilot, which is intended to begin by the end of 2008, is the first U.S.-based trial testing mobile money transfers between Visa accounts,” Visa said, but it has already been doing it in 13 countries in Europe, the Middle East and Asia.

Visa also said it will be working with cell phone maker Nokia to create a contactless payment phone that will include discounts and other ads from retailers and that it will be working to create mobile payment services for Google’s Android platform. Not all observers are favorably impressed. …

This week brings the news that American Express is halting its ExpressPay keyfob, some six years after the payment giant started offering it. The program is expected to deactivate the last of its fobs by July. There are many reasons the fob may have died, but at least Amex—with six years of fob effort under its payment belt—can't be accused of not giving the fob enough time to work.Read more...

The good news is that major companies are now actively pushing mobile. The bad news is that they're pushing in different directions. The mobile phone e-commerce activities you're seeing today are going to fall victim to the same amnesia fog that envelopes all of those early Web searches done on text-based browsers.

Although the Web had been around for years, it was the graphical browser that got the industry to agree on one way to create Web pages that could fire the imagination of businesses and consumers. That defining moment has yet to hit mobile commerce. Forget design and programming issues. There hasn't yet even been broad agreement on how m-commerce is supposed to work. Let's start with simple payment.

If you're going to be in the Boston area June 5th and 6th, would love to hook up with some of you at the ERIexchange show at The Boston Convention Center.

That show is actually shaping up to be quite significant, with keynotes from BestBuy CIO Bob Willett, CircuitCity CIO Bill McCorey and Metro Group managing director Gerd Wolfram, among other notables.Read more...

Phones that can ring with coupons, beam payments and deliver true multimedia interactive experiences are already in the pockets of most consumers. How far will—and should--retailers go?

A free product coupon is a free product coupon, right? If it's for the same product at the same merchant and the pricing and timing are roughly the same, it shouldn't matter how that coupon is given to the merchant. Andrew Kamps, the VP of operations at a New York restaurant chain, recently learned otherwise.Read more...

MasterCard today tolled out its PayPass watch in Taiwan today, allowing consumers to pay with contactless without having to take out a credit card. The watch comes with some small retail discounts, but Taiwan consumers are expected to show minimal resistance.

Would this catch on in the United States? Not likely, unless the discounts were a lot more generous than the 10 percent discount in one chain being offered with today’s promotion.

But it’s hard to beat the sex appeal of a lime-green watch with a vendor’s brand on it. Rolex, watch out.…

With an estimated $10.5 billion of idle spare change lying around American households, Amazon sees that found money as found money. And it will now accept it for purchases. Pity the poor penny, the neglected nickel, the despondent dime and the queasy quarter. The times are changing and for change, it's for the worse. Read more...