Mobile payments part 2 - a tale of princes, laws and treasures

In the previous post we've looked at mobile payments in a glance, why there's a huge chance today and what are the biggest challenges. In this post I will start diving deeper into them, and suggest a few ideas.

There's a group of very talented guys I know, who used to work at this IT Company in Israel that was a part of the mobile industry. They basically made some peripherals, a few applications and other mobile related products. One of these products was a relay to transfer contacts from one cell phone to another, in case the owner wanted to upgrade or downgrade (yes, there are people who do not have smart phones and Outlook sync). When, at some point, they started their own company to manufacture and sell a similar relay, they found a very interesting (well, in a sense) thing: a huge chunk of their dev and QA time was not spent on improving the product; instead, it was spent on porting - making sure that the software matched all cell phones out there.

This is the time when industry experts read and think: "what else is new?" (And also: “we don’t have this problem now with the iPhone!” Yes, you do. But that’s for the next post).

Amazon PayPhrase is a nice, risky step (plus some PayPal platform)

Today, TechCrunch posted about Amazon PayPhrase going live. It appears that Amazon customers were notified of this feature, allowing them to set a phrase they can later use on 3rd party sites to check out quickly - just type in your payphrase and PIN and you're out. The TC post mentions a similarity to PayPal's student accounts, I am not sure I agree, but that's not the case. The interesting question (one also raised in the post) is - what new risks does a new feature introduce into the system?

There's a lot to be said about modeling the possible risks in a new payment feature, and I find it to be some science, some art. You have to weigh not only what users and fraudsters are doing now, but also what opportunities will they have once you introduce a feature, and understand how to design controls that mitigate the major issues without hurting functionality. That's why there's some art in it.