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Making money fit for the future

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There is a problem with money – it now comes in many forms, but is not fit for the future. That’s going to change, writes ARTHUR GOLDSTUCK.|easy tech

Pepper is not your everyday waiter. He is a robot that can move on its own wheels, taking orders from customers in a restaurant, fetching the food and delivering it to tables. But he’s not just a novelty: over the past year, more than 14 000 units have been deployed in fast food outlets across Japan.

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Its maker, Softbank, builds a thousand every month and sells out as fast it produces them. Pepper has branched out into dentist offices, bathhouses and even life insurance sales.

Pepper’s international breakthrough came in May, when Softbank teamed up with Mastercard to add payment functionality via the Masterpass digital wallet app. It allows customers to pair the app on their smartphones with Pepper, and make payment through a touching a button on their screens or tapping the phone on Pepper.

It is currently being rolled out out mainly by Pizza Hut in its outlets across Asia, but is not going to stick to fast food. Meiji Yasuda Life Insurance in Japan plans to put a hundred Peppers to work as salesrobots at its 80 branches.

Pepper may well look like the future of sales, but in truth is only one of many futures that is beginning to emerge. At the Mastercard Innovation Forum in Budapest last week, where Pepper made an appearance, it was clear that the real secret was not in the artificial intelligence that makes Pepper possible, but in the interfaces that make payments seamless.

According to Michael Miebach, chief product officer at Mastercard, the problem with money is that it no longer works seamlessly, even in the digital area of connected accounts and mobile money apps.

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“The consumer today mainly engages with us through plastic, and some use digital payment factors,” said Miebach in an interview in Budapest. “So the payment experience can be digital, but there are many other experiences around payment that are not connected to each other.

“Take loyalty programmes with frequent flyer miles: to figure out what my mileage is, I have to go onto a website. And I can’t connect it with my card account. So there is a disconnect between all the payment tools. Many of them work well by themselves, but they are not fit for the future.”

This startling statement comes as research reveals it is not only so-called millennials who are ready for digital and connected payment systems. Consumers across the board want to be able to pay on any available channel, at any time, anywhere.

“They want convenience, it must be simple and smart, and it must be secure,” said Miebach. “The most important thing is safety and security, which is not only about preventing theft: it means that the payment must only take place when you want it to, and where you want it. Those needs are universal, for millennials and for older people.”

The initial focus is on what has been around for a long time, namely the existing form factor of the plastic card and how it will evolve, and linking it to what’s happening in the Internet space.

The big push in the United States at present is for the EMV system, named for card associations Europay, Mastercard and Visa. A chip embedded in the EMV card allows for authentication of the transaction on the card itself via a PIN number linked to the chip. South Africa introduced the system a few years ago, but it is only beginning to be a dominant safety standard in the USA.

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It is likely to be followed by a shift to tokenisation, which allows a random string of digits, linked to a card number, to be used once-off for the transaction, so that the card details are not stored by the merchant, and cannot be reused if intercepted.

Then, according to Miebach, “We move all the way to consumer self-authentication, or biometrics, and here it gets really interesting. I believe biometrics will be a critical factor to identify who is paying and who they are paying.”

Many smartphone users are already familiar with biometrics thanks to fingerprint recognition on newer smartphones. However, Miebach believes that facial recognition has the potential to be as big.

At Mobile World Congress in Barcelona in February, Mastercard demonstrated the concept of Selfie Pay, based on many smartphones having a camera that can recognise facial features. Instead of typing in a password, the user selects the Selfie Pay option, takes a photo with the front camera of the phone, and the transaction is authenticated. It’s already in use in California and the Netherlands.

In principle, there is little difference between biometric authentication like fingerprint and facial recognition on the one hand, and voice and iris scans on the other. It all comes down to the platform where the payment is being made, and which is the most natural form of authentication at that moment.

However, even the selfie does not offer enough convenience, says Miebach, as one still has to hold up the phone and take pic.

Raghav Malik, Senior Analyst in Enterprise Security Solutions doing a product demonstration of Identity Check in MasterCard stand at the Mobile World Congress in Barcelona, Spain, Monday, Feb. 22, 2016. The company displayed the future of payments for devices and wearables. (Carlos Alonso/AP Images for MasterCard)

Raghav Malik, Senior Analyst in Enterprise Security Solutions doing a product demonstration of Identity Check in MasterCard stand at the Mobile World Congress in Barcelona, Spain, Monday, Feb. 22, 2016. The company displayed the future of payments for devices and wearables. (Carlos Alonso/AP Images for MasterCard)

“How about if you have continuous proof of life, such as heartbeat patterns and continual authentication, based on wearables? It will be very intuitive and consumers won’t even notice it’s happening.”

There is one fundamental reason consumers would embrace this payments future, and why organisations like Mastercard are working so hard to turn it into reality.

“It sure beats the world of today with the range of passwords and user names we need to remember,” says Miebach. “That’s like having to guess who you are every time you make a payment.”

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  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee

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Rain, Telkom Mobile, lead in affordable data

A new report by the telecoms regulator in South Africa reveal the true consumer champions in mobile data costs

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The latest bi-annual tariff analysis report produced by the Independent Communications Authority of South Africa (ICASA) reveals that Telkom Mobile data costs for bundles are two-thirds lower than those of Vodacom and MTN. On the other hand, Rain is half the price again of Telkom. 

The report focuses on the 163 tariff notifications lodged with ICASA during the period 1 July 2018 to 31 December 2018.

“It seeks to ensure that there is retail price transparency within the electronic communications sector, the purpose of which is to enable consumers to make an informed choice, in terms of tariff plan preferences and/or preferred service providers based on their different offerings,” said Icasa.

ICASA says it observed the competitiveness between licensees in terms of the number of promotions that were on offer in the market, with 31 promotions launched during the period. 

The report shows that MTN and Vodacom charge the same prices for a 1GB and a 3GB data bundle at R149 and R299 respectively.  On the other hand, Telkom Mobile charges (for similar-sized data bundles) R100 (1GB) and R201 (3GB). Cell C discontinued its 1GB bundle, which was replaced with a 1.5GB bundle offered at the same price as the replaced 1GB data bundle at R149. 

Rain’s “One Plan Package” prepaid mobile data offering of R50 for a 1GB bundle remains the most affordable when compared to the offers from other MNOs (Mobile Network Operators) and MVNOs (Mobile Virtual Network Operators).  

“This development should have a positive impact on customers’ pockets as they are paying less compared to similar data bundles and increases choice,” said Icasa.

The report also revealed that the cost of out-of-bundle data had halved at both MTN and Vodacom, from 99c per Megabyte a year ago to 49c per Megabyte in the first quarter of this year. This was still two thirds more expensive than Telkom Mobile, which has charged 29c per Megabyte throughout this period (see graph below).

Meanwhile, from having positioned itself as consumer champion in recent years, Cell C has fallen on hard times, image-wise: it is by far the most expensive mobile network for out-of-bundle data, at R1.10 per Megabyte. Its prices have not budged in the past year.

The report highlights the disparities between the haves and have-nots in the dramatically plummeting cost of data per Megabyte as one buys bigger and bigger bundles on a 30-day basis (see graph below).

For 20 Gigabyte bundles, all mobile operators are in effect charging 4c per Megabyte. Only at that level do costs come in at under Rain’s standard tariffs regardless of use.

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Qualcomm wins 5G as Apple and Intel cave in

A flurry of announcements from three major tech players ushered in a new mobile chip landscape, wrItes ARTHUR GOLDSTUCK

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Last week’s shock announcement by Intel that it was canning its 5G modem business leaves the American market wide open to Qualcomm, in the wake of the latter winning a bruising patent war with Apple.

Intel Corporation announced its intention to “exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices”.

Intel said it would also continue to invest in its 5G network infrastructure business, sharpening its focus on a market expected to be dominated by Huawei, Nokia and Ericsson.

Intel said it would continue to meet current customer commitments for its existing 4G smartphone modem product line, but did not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020. In other words, it would no longer be supplying chips for iPhones and iPads in competition with Qualcomm.

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

The news came immediately after Qualcomm and Apple issued a joint announced of an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm, along with a six-year license agreement, and a multiyear chipset supply agreement.

Apple had previously accused Qualcomm of abusing its dominant position in modem chips for smartphones and charging excessive license fees. It ordered its contract manufacturers, first, to stop paying Qualcomm for the chips, and then to stop using the chips altogether, turning instead to Intel.
With Apple paying up and Intel pulling out, Qualcomm is suddenly in the pound seats. It shares hit their highest levels in five years after the announcements.

Qualcomm said in a statement: “As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio.”

Meanwhile, Strategy Analytics released a report on the same day that showed Ericsson, Huawei and Nokia will lead the market in core 5G infrastructure, namely Radio Access Network (RAN) equipment, by 2023 as the 5G market takes off. Huawei is expected to have the edge as a result of the vast scale of the early 5G market in China and its long term steady investment in R&D. According to a report entitled “Comparison and 2023 5G Global Market Potential for leading 5G RAN Vendors – Ericsson, Huawei and Nokia”, two outliers, Samsung and ZTE, are expected to expand their global presence alongside emerging vendors as competition heats up.

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