Apple Pay, Face-pay, Tweet to Pay – or Plastic?

Starbucks knows or should know quite a bit of information about me.   What would the data reveal – I drink medium roast Vente drip coffee, in the afternoon, I travel frequently, that I almost buy a sweet of one kind or another.  Boring I know, but important to them.  How do they know?  The Starbucks payment ap which I’ve used almost since the clumsy first day they offered it.  Visa knows I reload a Starbucks card roughly once a month.  Starbucks has the fine grain data – all in trade for one free drink for every 10 and a special offer now and then, and convenience.  They do $1.5B per year on their closed loop system – arguably the largest most successful virtual payment application ever.

Today – my IPhone cheerfully let me know that I could start to use the new Apple payment ap inside Passbook.  In 2 minutes (post installing the iOS8.1 update), my credit card on file magically appeared in a virtual image of itself in Passbook waiting for service – store purchases, in ap purchases.  Touch it to a NFC reader at Target (well maybe not Target), a temporary number is generated lowering risk and off I go.  Apple made it simple, almost elegant.  So Apple has now interjected itself more fully into my life.  In all the fine print, they can track what I buy and where (although they say they don’t) – and then pass along the relevant payment completion data through the settlement process – but they’ve got the golden data goose of my digital contrails.  They know who am I, what I buy, where and when.

Twitter has launched a pilot Tweet-pay initiative with a European bank.  I haven’t seen it, but word is – you can Tweet a payment to anyone once you’ve set this up.  I presume they did this in a bit of an out of site way to test the concepts and work out the kinks in case things go awry.  Early returns say it posts payments as a Tweet – that seems like a terrible idea.

I believe, but don’t know, that Facebook has its sites on a payment play through their messaging platform(s). I like that idea the best.

AT&T has been futilely trying to make a go of Isis (now a terrible name choice over a terrible product offering).  Google has made equally marginal progress.  Paypal has split from Ebay to find itself and become more broadly relevant.

Who wins and why?  The provider(s) that offer(s) high, consistent trust and ease of use – and an incentive or value add to change behavior. Will consumers change behavior?  I believe it’s too early to know – and will take several years to unfold and remake the dominant plastic payments landscape. 

My near-term prediction – Starbucks will continue to run a largely successful payment program built to suit their own purpose – and serving as a model for niche signle entity payment systems with unique customer insight.  The others will fragment along specialized lines.  Facebook may get small merchants and person-to-person with their Face-pay.  Apple knows how to make simple experiences elegant and cool – they might get there with payments – but adoption will be slow.  Twitter will be marginalized much like Google and AT&T.

In the meantime, be mindful of who you let interject into your payment life – if you care at all about data privacy and the value of your personal predictive spending patterns and information.  And think about who are you going to call when you use Twitter to pay Staples with your Visa card backed by Bank of America.

Will Facebook Finally Disrupt Payments?

Premise 1 – Payments are messages. Me to you, you to me – the content of which is the exchange of value.

Premise 2 – For consumers and merchant to adopt new payment technologies and move from legacy technologies (physical credit cards, cash, etc) they have to be global, frictionless and assured/secure consistently.

Facebook has 1B users globally. They have two messaging platforms that have global scale and significant numbers (Messenger at ~200M and What’s Ap at ~500M). Facebook, under the leadership of David Marcus, has declared an intention to enter payment messaging market. The large card players watch but largely dismiss the social networks as potential competitors. The traditional view is ultimately a transaction will still cross their rails, so either way they benefit.

But – bear witSAMSUNG CSCh me across some leaps. What if Facebook changed the game, as they have in so many other ways?

None of this attributable to any industry sources – just speculation on one possible path.

  • Facebook leverages Messenger and What’s Ap to launch “FriendPay”. On this platform – one friend pays another via enhanced messaging. If we are friends (whether individual or merchant) – a payment can be sent.  If we both are on Facebook, then we just need to be Friend or Followers.
  • Facebook acquires Discover card providing their own payment rails and reduce dependency on the other payment networks and their fee structures. To join FriendPay, users would agree to credit terms and conditions similar to acquiring a Discover card – but branded under the FriendPay (Have you ever had the strong urge to run out and get a Discover card?).
  • How much does Facebook charge? $0 – not to the individuals or merchants, which turns the traditional industry model on its head. Why? Facebook already has your social graph, this rounds out their insight into not only what you do, but what you pay for. The large card players are still trying to get this model right – it’s right there in Facebook. All they have to figure out is strong payment messaging. This increases their targeting capability many fold.

No “wallets”, low friction, free – all the parts are there. My money would be on Facebook.

Bay Bridge Night

Attending SOCAP 2014

I’m grateful and excited to be attending my first SOCAP since starting Omvestments in March 2013.  I continue to be amazed at both the opportunities and challenges of creating impact.  There is so much need across many geographies and global turmoil does little to help advance mindful investing.  It’s always harder to operate and see clearly in an environment of emerging fears.

I’m looking forward to being among like minded entrepreneurs, investors, global organizers and thought leaders to connect on many topics, share ideas and stories from the last mile of success, failure and lessons learned in the field.  And maybe play a little too.

Impacteri2Of particular interest are exploring discussions involving Impacteri.  We are looking for partners seeking to take their impact idea, venture, products or technology into new markets but don’t have the capacity to do it alone.  We’ve tested the idea, continue to evolve the model – and look to scale up Impacteri impact in 2015.

If you would like to meet or talk about your venture, share investment ideas or challenges – I’d welcome a chance to get together.  Send an email to Richard at Omvestments dot Com and I’ll be as responsive as possible.  See you at SOCAP.

Interest Rates and Information Symmetry

NY FedAre interest rates set up to remain low or near zero for longer than the markets and observers expect? How long? Perhaps as long as another 5-10 years. Based on what and why?

First, Janet Yellen is taking an appropriately conservative stance on raising rates at present. Appropriate because she 1) sees what’s happening in Europe with the collapse of rates; 2) is wisely not trying to slow down QE and raise rates at the same time.

Second, information symmetry is at work. A lot of attention is given to information asymmetry – one party having an advantage over another. This often gets applied to sophisticated trading strategies or market information advantages. But today, almost anyone watching the global markets and geopolitics sees things happening at the same time, in near real time and reacts accordingly – thank you CNBC, Twitter and CNN. That is a different dynamic than has existed to this extent – and acting on the market and economic activity in unexpected ways.

What are the dynamics in place that are widely observed and reported on:

1)    The US is just barely moving out of the recession and the fuel that has driven it is liberal monetary policy. If the flow is funds is slowed and rates rise – the economy is going to back slide.

2)    The European markets are weak to anemic at best – and they are continuing to lower rates just sustain some minimal level of economic activity.

3)    Global economic activity remains choppy and sluggish and a slowing of US economic activity by the raise rates/stop QE twins could drive a even broader global slump.

And you can pretty much observe this by keeping an eye on readily available, widely accessible information – information symmetry.

The Fed has another 6-12 months of assessing the realities of slowing down their spending. If that is digested by the economy without excessive heartburn (which it may not be) then maybe a 25 basis point raise is possible – maybe even 50 basis points. Then what? Economic activities slows – and investors still don’t have a compelling reason to shift to Treasuries or interest rate products.

So here is an observation – we are years away from a sustainable rising interest rate environment and investors seeking yield need to think about sticking with alternative strategies to get both yield and appreciation or it’s going to be a very long wait to invest.

Cape Town

Detroit What If?

I bought a Shinola watch not long ago, and then another, and one more. They are beautiful timepieces, well engineered, creatively designed, manufactured and marketed. Vintage Detroit. Find more at Shinola (“Where we will reclaim the making of things that are made well.”)

(Stay with me on this.)

I’ve been traveling in Africa and meeting with existing and potential impact investments.  Africa is a continent rising with high aspirations – big, diverse, resource rich, young population. There are challenges (many) – and it’s not a one solution fits all place. South is different than West, West different than East, etc.

But I’ve heard an interesting common theme. Africa doesn’t have a historical legacy of precision manufacturing – high quality tooled precision electronics or enclosures for example. A natural solution is – China. Great for Apple, where they run their own production facilities at local rates and make sure precision levels are met and maintained.

What if you are a small (impact) venture, manufacturing in the 1,000’s to 100,000’s, not millions. Results are far less predictable, mistakes are costly and the choice is lower quality standards or build elsewhere.  Where do you go?  What about back to the US?

What if in a global turnabout – Detroit became a global destination for high quality, well priced manufacturing for this emerging continent. Detroit has all the right aspirations and many of the capabilities – build capacity, precision engineering experience and hunger for re-growth of a decimated inner core. Plus, the Detroit airport is large scale, world class and could support major distribution links to Africa and Middle East distribution points.

My background is not engineering or logistics, it’s banking consulting. But I’m a passionate impact investor – and Africa aspiration meets Detroit manufacturing could be a win/win on many fronts. What do you think Dan Gilbert?


Five Parting Thoughts on Wallets, Shoeboxes and the Changing Social Payments Landscape

  1. Digital wallets are a poor investment and use of corporate capital. Until paying with a mobile device is frictionless, well designed in form, functional and well priced (free) it will never be more than a curiosity.
  2. The Shoebox concept, unified and integrated, will be a $1B business opportunity for the player or players that pursue it.
  3. It will likely take a combination of players that don’t often work together – Facebook plus Acxiom, MasterCard and Amazon/Apple, Visa, Dropbox, AT&T.
  4. The concept will scale globally and impact emerging markets. Mobile infrastructure and use rates are there to support it.
  5. The concept needs a better name and Apple like design sensibility to make it work. Then users will be more than happy to pay across the same platform.



Digital Shoebox 4 – Industry Moves and Observations

I’m continuing to write on this topic, because in spite of my passion for Impact Investing, I’m getting quite a bit of response and interest on this.

Paypal and David Marcus Moving to Facebook

Re/Code wrote about this major industry move – but I don’t agree with their point that this isn’t about advancing Facebook’s payment agenda:

This is what Facebook said in their news release:

  • “Messaging is a core part of Facebook’s service and key to achieving our mission of making the world more open and connected,” Facebook said in its announcement about Mr. Marcus’s new role.

Payments are an exchange of value encapsulated in a message format. That’s what makes the MasterCard and Visa global networks hum – message passing about financial information, exchanges of value between counter-parties. Facebook could have hired a lot of smart people that know about messaging. They likely got quite a few in the recent purchase of What’s Ap and in the development team of Slingshot. But David Marcus has the combination of messaging and payments smarts from Zong and PayPal.

Well coordinated, secured and managed – all things Marcus understands – Facebook could become a major contender in the Payments and Digital Shoebox race, with Messenger, What’s Ap and Slingshot becoming ways to communicate financially as well as personally.

Acxiom and Scott Howe

Never heard of Acxiom. Most people haven’t. They are your “Digital Shoebox” of sorts, you just don’t know it. Acxiom collects massive amounts of data on all types of transactions, manages it, organizes it and sells it to marketers – banks, retailers, publishers – helping them to target ads and campaigns. Under the CEO Scott Howe’s leadership, you can now get a glimpse into your profile at – You can register and get transparency into the information about you, update history and even Opt Out. But this is a bit of outsourcing magic – getting the consumer to improve their information product accuracy.

What if they offered you a way to monetize the data yourself – maybe working with a partner (like Facebook or MasterCard) – and help you manage, control and use the data of your life. They’ve gone part of the way.



Digital Shoebox 3 – Amazon, Facebook – and Getting It Right

A couple follow on observations related to the Digital Shoebox idea (if anyone has a better name – send it my way).

Observation 1 – Yesterday (6/9/14) Amazon announced a further push into the payments space. Amazon Payments is good, but not Paypal, yet. They hit all around the idea of the last two Shoebox posts – but then mystically fly off into old model payment paths. According to Reuter’s:

  • “The service, which launches on Monday, allows the company’s more than 240 million active users to use credit card details stored on to pay for services such as a monthly phone bill or a digital music subscription. Amazon then charges a fee on each transaction.”

It’s not clear who is paying the fee. I presume the merchant, but if it’s the consumer – that is a big miss. And, why not “shoebox” the invoice for me. So when Ting sends a bill (the scrappy cell provider that uses Amazon payments) – put the bill in my “box” and make it usable and start to create a shareable profile so I can use the information and we can share in the benefit. This could get really interesting with Amazon’s presumed soon to be announced mobile device offering. Smart people at Amazon, it will be a race with Paypal and a few others to truly modernize the payment and transaction processing world, especially while the banks spend all their time and investment on regulatory compliance.

Observation 2 – Today, Facebook announced the hire of David Marcus. He’s an entrepreneur, and is coming over from Paypal (the President of Paypal). If anyone understands the “shoebox” of stuff idea, it’s Facebook. And sharing. David Marcus brings entrepreneurial payments inspiration to the party. Should Facebook be trusted with managing payment data and transactions, not yet. But under David’s leadership – and integrating the other offerings on the platform – they just might get there.

American Express – are you listening (see for more background)?, as I toss another blind solicitation in the waste bin, sent to a former customer they had for almost 15 years.  Keep an eye on Amazon, Facebook, Paypal and a few others to finally change the customer interaction and payment landscape.


Digital Shoebox 2 – Q&A?

Thank you for the great feedback and questions on the Digital Shoebox idea. The questions bundled into categories – so here are the five most common themes.

First the assertion – “what you’ve done is far more important than what you do in value stream creation”. The idea of the prior post is that consumers should start to aggregate the receipt data stream, supported by the right player(s) for the benefit of all. Digital wallets – no, paper receipts – valueless – aggregating the personal transaction data stream – value creating!

Q1: I’m not sure I get it (Part 1) and what does this have to do with impact investing (Part 2)?

Part 1 – try this experiment – for a day or two, collect all the “paper” receipts you get for purchases made. This would include email confirmations from web purchases. When you examine the collective data at the end of the collection period – what do you have? Nothing of real value or usability from an information perspective. What do the merchants have – your transaction with them and maybe some history (if your smart like Uber) but only that thin slice.

But if these transactions all flowed into the “Digital Shoebox”, along with other digital life transactions – and an intelligent aggregator sorted out the information – overtime, your personal data warehouse grows and becomes very valuable – to you and to those interested in you. And, best of all you control it and can monetize it.

Part 2 – While not directly applicable to impact investing – it will have future impact on the 1-2B consumers rising up in emerging markets. Think about building this repository for BOP activities. Most transactions performed in those markets will either be local currency (not traceable) or more likely and increasingly mobile based and therefore already digital. It’s not a great leap to realize how valuable that stream will be.

Q2: Why bash digital wallets and what about Bitcoin?

Digital wallets don’t create value or allow the user to really control anything.   They make no more sense than MasterCard caring about the brand of the physical wallet container for their card today. All preach universal and shared access – with some top level aggregator (the wallet provider) potentially benefiting and taking control of your information – but that does nothing for the user but create more complexity, lost time at point of sale and no control. That doesn’t really make any sense or create any value. What digital wallet are you using? I thought so.

Bitcoin is nothing more than another transactional currency and method.  Add it to your transaction profile, or don’t – but its just another payment form.

Q3: What about privacy?

You don’t have privacy today, because you largely don’t control, collect or manage this information today, nor are you able to create anything of value from all those paper scraps and transaction data. Big data warehouses collect much of this information, under their control – and share that data (for profit) to guide traffic or insight to you. Better to take control, manage it and share it with companies and merchants you care about.

Q4: Who is trustworthy enough to be the “shoebox” provider?

There are a number of companies mentioned in the prior post that could do this. The one who gets it right – making it friction free, highly secure and intelligently productized – will be able to create the standard, grow the user base and create a $1B product offering over time. Think Facebook – 1B people share their most intimate life details, pictures, and friends. What if Facebook helped you create something of real value. If you have a Paypal account – log in and look at your transaction data history. They get it. What if they had a broader view of your transaction details and history. That starts to get at the idea. The names that could do this, do a part today – MasterCard/Visa (transaction processing), Paypal/Google/Facebook (personal data aggregation), Dropbox/Box (virtual mass storage). The best single solution would likely come from some partnership of these companies or a new entity that makes the sum greater than the parts.

Q5: If this is such a great idea, why isn’t someone doing it now?

Beats me. If you like the idea – run with it or get back in touch, we can explore it together.  Thanks again for the feedback and questions.


Create the Personal “Digital Shoebox” – Forget the Wallet and Big Data

I’ve carried an American Express corporate card for many years, always paid on time too – thousands of dollars paid, transactions made, payment history collected and points used. Upon departure from the issuing corporation, the card – CANCELLED and all follow on activity from Amex focused on ensuring final payment and immediate relationship severance (including the big button on the remaining customer website that I had the pleasure of pressing that said terminate web site access).

How much has American Express spent on big data initiatives – finding customers, keeping customers, analyzing trends and response rates? So why did they so abruptly severe our known and long standing relationship – with never so much as an offer to convert to a personal card? Maybe they expected me to come to them. Citibank, American Airlines and MasterCard were happy to fill the void with a card I happily pay a reasonably high rate for and performs largely the same function – and doesn’t get the merchant smirk of Amex at point of sale. Oh, and at least twice a week I get a blind solicitation from American Express to sign up for this blue card or green card or silver card –those go in the trash. So much for investment in big data.

So what did American Express miss? The same thing that many payment tracking and wallet initiatives miss – what you’ve done is far more important than what you do in value stream creation.

In the emerging 21st century, we are becoming our own data creation engines. Imagine the volume of data that get’s created in your daily wake. Not just transactions on the Internet or at a merchant, but:

  • Driving data from a car (Chrysler)
  • Airline flight booking or trip taken (American Airlines)
  • Prescription filled by the pharmacy (Dwayne Reade)
  • Medical record data from a visit to the doctor
  • A bank deposit (U. S. Bank)
  • The Uber ride (Uber)
  • Images from every camera I pass through in a day (Everywhere)
  • Daily coffee purchase (Starbucks)
  • Web searches, postings, emails, tweets…(Facebook, Twitter, Google)

It paints a vivid picture of daily activities, purchasing desires, habits and motivations – a complete stream of information and activity – dynamic and predictive in the right hands.  Aggregated, all the small personal data becomes personal big data. Today who controls, manages, monetizes and secures it – not me or you -and it matters, here’s why.

Digital wallet – wrong cow path. “Digital shoebox” – an email address ( and a smart repository – new path. Every time someone asks for an email address at the point of transaction – they get this address to send receipts, medical information, flight information, train tickets, the transaction record of digital life (Receipts 2.0).   The smart repository collects, stores and analyzes the information and develops my profile and smart segments that I can control and choose to share at my discretion and price with the right party in return for preferential purchasing treatment and offers. Some get one time feed, others a continuous flow.  A standard would emerge for digital receipts of all types.

Who could manage the repository – Google, Amazon, Apple, Paypal – or neutral parties like Dropbox or Box – or MasterCard or Visa. They would agree to control and management parameters for sharing – and share in the value of sharing and monetization.  Google “sharing economy” – then think about how to control your own information and value creation.

In the long run this is vastly more valuable to everyone – no more blind big data or guessing. Make small data big and valuable.  American Express – are you listening?