Mobile Breakfast Series Recap: Mobile Commerce and Payments

Mobile Breakfast Series Recap: Mobile Commerce and Payments

We hosted our first event of the year yesterday and were blessed with some terrific weather and views of the picturesque Puget Sound. This year we want to tackle the topic of mobile commerce and payments. In our annual predictions survey for 2015, Mobile Payments emerged as the breakthrough category for the year. Additionally, mobile commerce is just booming in all parts of the world with some very interesting implications for the ecosystem.







One of the metrics I use to track progress in any segment is the number of $1B businesses being created each year. In 2012, there were only 9 companies mostly large enterprises like AT&T, Apple, Google, and Amazon that had > $1B digital businesses. However, in 2014, this number jumped to 37 with several new entrants – from known brands like Twitter, Walmart, and Xiaomi but several companies unknown to the western world like WeChat, FlipKart, Otto Group, GungHo, Suning Appliance, and others. While most of the concentration of digital wealth in the US, China is emerging very strongly as a player to reckon with. In fact, how China and US companies interact and play will perhaps define the next 10 years. While other economies like India, EU will play a role, I find China and US to be the most fascinating.

We had a terrific group to discuss the mobile commerce and payments trends, folks who are in the trenches making things happen on a daily basis and come to the problem from different angles.

Sebastien Taveau, VP and Chief Developer Evangelist, MasterCard

Sebastien serves as Chief Developer Evangelist for the Open API team at MasterCard where he leads the outreach to the global developer community. Puzzle solver, strategic thinker, beyond-the-horizon watcher and hands-on doer, Sebastien has technical and professional experience spans more than 20 years in various industries. He was previously with Validity as CTO and Paypal leading the technology integration efforts.

Prat Vemana, VP – Mobile and Commerce, Staples

Prat leads Staples’ eCommerce product teams responsible for the online customer experience (CX) on desktop, mobile and retail-store digital interactions. He also manages global shared services teams for onsite search, user experience research, architecture, A/B testing and analytics. Prior to his current role, Prat lead Staples’ Velocity Lab in Cambridge and drove the company’s global mobile strategy. Prat’s product and CX teams operate out of the company’s corporate headquarters in Framingham, Massachusetts and Staples Labs across the country, including Cambridge, Seattle and San Mateo.

Sam Liang, CEO and Co-Founder, Alohar Mobile

Sam Liang is CEO and Co-Founder of Alohar Mobile. Previously, Sam was the platform architect and lead of Google Location Server and API, which powers thousands of mobile applications on Android and iOS. Sam held a number of patents in wireless and mobile technologies. Sam has a Ph.D. in EE from Stanford University. Alohar was acquired by Alibaba, now the 4th largest tech firm on the planet.



(Source: Alohar Mobile)

The salient points of discussions were:

  • The sensors in the mobile device provide enormous capabilities to under the user behavior which can be used to provide better services to the consumer. We already knew that but the level of granularity one can achieve in this is tremendous. For e.g. one can pretty much predict what you are going to do on any given day with 95%+ accuracy. This all based on your past behavior. This can lead to more personalized services and applications. For e.g. instead of seeing the same Google Map that everyone sees when they type in a query, maps can turn into more personalized maps. Or a venue can offer better offers for repeat customers.
  • The data also allows for better segmentation and as such one can provide more tailored services.
  • iPad is more popular on the weekends while phones do better on the weekdays. Based on that apps can morph according to time and day.
  • Many players have access to the location data but if combined with some 3rd party data, it can yield interesting and useful insights like MasterCard can provide better real-time data on gas stations that are open based on transactions that are currently taking place vs. a Google query which is likely to have stale data.
  • MasterCard has been positioning itself as a “technology infrastructure company that happens to do payments.” It is making a conscious choice of working with the developers led by Sebastien to expose (not share) the data in a way that benefits the application developers. There are  range of APIs that are available. If you haven’t interacted with them, I will encourage you to do so at –
  • MasterCard’s data APIs are also being used for Smart City initiatives like the one with Barcelona.
  • Similarly, Alohar and Alibaba want to work with developers to take advantage of the contextual platform that Alohar has built –
  • Staples has seen a significant jump in mobile usage. On black friday, 40% of the digital consumption was on mobile. First time double-digital sales take place on mobile.
  • Apple Pay is also doing really well at Staples which was one of the early adopters of the technology. For iOS apps, 30% of the purchases are using Apple Pay. 65% transactions are from customers who are new to Staples thus bringing a lot of new customers (and revenue) to Staples.
  • There is a strong desire for an Apple Pay like solution for the Android World but we are still not there.
  • While the user split for Staples between Android and iOS is 50-50%, the revenue tilts heavily towards iOS with 70% coming from the platform.
  • What Apple Pay has done so well is that end-to-end experience is terrific and simple and they worked collaboratively with the ecosystem to make it happen.
  • China is smartphone country with majority of digital transactions happening on mobile vs. desktop. They have skipped the desktop era. On the Singles day last year, Alibaba’s revenue was $9.3B on a single day many times more than most of the ecommerce players in the US. 43% of the transactions were on mobile. 50% of the mobile shoppers are 30 years old or younger, very fast adoption of technology.
  • Chinese titans are also looking to spread the wings and invest in the western and other emerging markets. The recent spate of investments from Alibaba, Tencent, Baidu, Xiaomi are just a preview of what’s to come.
  • Privacy and security remains a big challenge and issue for the industry. Industry continues to grapple with the right strategy and regulators with the right policy. Obviously, we need better encryption and more safeguards at various end-points. But, perhaps, more importantly, give back the controls to the consumer so they are more willing to share the data as they see fit. This issue is not going away anytime soon.
  • Bitcoin is still not a currency so while folks are keeping an eye on the trends, it is nothing that people are losing sleep over.
  • MasterCard and the Gates Foundation have launched a big financial inclusion initiative in Kenya that will bring many unbanked into the digital economy.
  • Tremendous synergies between physical store and online. Many consumers are ordering online from within the store or picking stuff in store ordered online.
  • IoT and Commerce – early days but lot of promise esp. in the store environment.
  • Both Sam and Prat think that the plastic card will disappear in the not too distant future.

We covered a range of topics. Mobile Commerce is driving the 4th wave for sure with so many interesting ideas and companies popping up every month. As usual, I had a lot of fun moderating the panel and engaging the audience. Thanks to all who joined and we will be in touch regarding future events. For now, we are expanding the breakfast series to Vancouver where we will host an event on April 14th and our Mobile Future Forward annual summit will take place on Sept 29th. Stay tuned for more announcements.

Thanks and see you around.