Fabrizio Giordano

Mobile payments are a revolution waiting to happen. It just makes sense that, with so many of us carrying around increasingly advanced smartphones, we’ll be able to use them to pay at brick-and-mortar stores and the check-out line.

We’ve been hearing predictions like this for years. Recently, Juniper Research estimated that worldwide mobile payment volume would reach an incredible $240 billion this year. By 2015, Juniper predicts, worldwide mobile and point-of-service (POS) terminal payments will reach an even more incredible $670 billion.

And yet, we’re really not seeing physical retailers move to adopt POS technology.

Yes, a few physical retailers are trying out new POS technology — Office Depot, for example, just announced it has teamed up with PayPal to experiment with letting customers pay using their phone number. But this kind of toe-dipping leaves us quite far away from widespread adoption.

Is that because the technology just isn’t available yet? No, the basic technology is no longer a barrier. NFC technology has developed significantly and Internet security is advanced enough to enable secure payments. Even paying via mobile phones using your carrier contract for collection was possible a long time ago and has been used around the world (it’s very common in Japan and has been for years), so that’s not what’s holding back mobile payments.

The slow adoption isn’t due to a lack of investment or innovation among technology vendors, either. Many companies, big and small, have been pouring a lot of money into this market, intent on becoming market leaders and making their platform the end-all-be-all standard. But no one has truly acknowledged the complexity of today’s retail point of sale process and what is required to enable reliable, and scalable mobile payments (and mobile services, for that matter, such as social applications, coupons, loyalty programs) at the retail point of sale.

Costs to integrate new and legacy technologies

One key reason retailers aren’t rushing to deploy mobile payment systems is that they see the cost of the solution as too high for the benefit. Even solutions that do not require new hardware pose significant costs to the merchant through fees and overhead. In fact, the purchase of a new terminal, an NFC reader, or other piece of hardware will likely be the least of a retailer’s expenses.

Because today’s retail systems are so inflexible, the integration of any third-party systems will result in a huge IT expense for implementation. The customization required so that all components of the point of sale system (including inventory management and payment processing) interact with a new mobile payment platform without disrupting the operation of the existing systems is cumbersome and expensive due to complex software integration.

The retailer’s cost to add even one type of mobile payment technology (such as Google Wallet) is currently very high, and since the market is so fragmented, adopting just one of the mobile payment platforms will only address a tiny portion of the market. To pay with Google Wallet, for example, customers have to have a specific phone model and one of the two credit cards that are currently supported.

Retailers can’t absorb these costs. For us to see a real mobile payments revolution in retail that provides added value to the consumer, retailers will need to integrate additional services such as coupons and loyalty rewards, each requiring its own associated customization costs.

But physical retail is at a critical point these days. It’s lost a lot of ground in the war with online retail. To stay in the game, physical retailers will have to start offering added values to clients that they do not offer today. They’ll need to have real-time control over their inventory, and they’ll need high quality information about their clients at their fingertips.

In today’s technology infused world there are more and more disparate systems and technologies that a business needs to remain scalable. From accounting and other internal systems to external web-based providers of leads and information such as Groupon, Squarespace and others.

So what exactly are the costs of this kind of integration?

The investments typically required include:

1. Restructuring the inventory data: mapping products and characteristics, eliminating overlap, regrouping and sorting of items
2. Restructuring client data: creating a uniform data format for the clients of all branches and departments
3. Physical implementation: although smaller in order of magnitude than an implementation of a traditional inventory and POS system (there is no need for dedicated hardware and servers), you still need to make sure that all the devices that will be running the web solution are available and that the peripherals are compatible
4. Training employees and management to use a new system and a new approach to dealing with the data.

Redefining the retail industry’s “operating system”

Having real time access to all of your inventory, and having real time access to data about your customers’ purchasing history and habits, including customers that are in the store at the moment, will help physical retail remain in the game. For example, Amazon has been applying sophisticated algorithms in order to offer additional products to customers during their browsing experience to increase sales. A new “operating system” for retail that provides companies with access to real-time data of inventory and customers is a must in order to offer such service to users in the future.

Because of a lack of industry standards, retailers can’t afford to gamble and choose one standard of mobile payment over another – they need to be prepared to offer their customers the ability to pay through whatever means the customers want.

Take the online commerce space as a perfect example. Platforms like Magento, Demandware, Shopify and Venda, allow easy integration with third-party software, so that payment solutions like PayPal, BillMeLater, and Google Checkout are thriving and being adopted by online retailers and consumers alike.

The very good news is that we’re seeing a new generation of retail “operating systems.” For retailers who are using web POS software, accepting a new form of mobile payment can now be as easy as installing an app. There is no need to change payment processing vendors, rebuild integrations with inventory management systems, or incur any other hassles. In the last year we’ve seen that large retailers are beginning to understand the need for a cloud-local based comprehensive POS solution.

Still, it’s ultimately a game of wait-and-see for those of us working in this market. The future of the mobile payments industry is in the hands of retail companies. If they embrace the potential economic advantage and convenience of the new, more cost-effective technologies, they have a lot to gain. Retailers need to make the choice to start the retail revolution.

Kris Hiiemaa is CEO of retail point of sale software and inventory system provider ERPLY.

[Top image credit: Walmart Stores/Flickr]

Filed under: VentureBeat

Ryan Carson, the web design guru behind Carsonified, wants to teach you how to code. And he says he can do it in just five minutes using a web-based game.

Carson’s latest endeavor is Code Racer, a multi-player game designed to teach simple web skills through live-coding.

In an chat with VentureBeat, Carson explained that the game teaches total beginners how to code a basic web site in as little time as five minutes. Players can race each other to finish coding challenges, and along they way, they unlock rewards.

Code Racer joins a new genre of simple, interactive web tools that take novices through the steps of learning how to code.

One startup with a similar premise (though without some of the more obvious game mechanics), is Codecademy, which got its start with Y Combinator before raising a lightning-fast $2.5 million funding round. Codecademy is looking to increase its userbase with Code Year, a weekly program to turn web users into web coders throughout the course of 2012.

But Carson says Code Racer and Treehouse, its parent, are quite different from Codecademy’s offerings.

Treehouse, Carson’s code-and-design-focused startup lets visitors watch videos and learn basic web skills. The more you learn, the more badges you can unlock — and some badges, like the Advanced Node.js badge or the Rails Foundations badge, can earn you interviews with companies like Facebook and WordPress.

Currently, Treehouse employs eight full-time teachers to create videos for the site.

“Code Racer is kind of the next iteration of that,” Carson explained to us. “We can reach you through video, and we can also teach you through interactive gaming.”

In fact, Carson imagines that Code Racer, which itself is simply a weeklong hackathon-type project from Treehouse staff members, will eventually end up as part of the greater Treehouse product.

“We’re going to roll out a group Treehouse product so big companies will have a dashboard of their members, what badges they’re unlocking, how fast they’re learning, rankings,” Carson explains. “Code Racer would be good for groups to challenge each other.”

Carson gives us an example: Disney, he says, already has a rather sizable Treehouse account for its in-house development team. Code Racer “might be the perfect internal tool for group members to challenge one another and also have fun,” Carson concludes.

Late last year, Carson told VentureBeat he had sold the Carsonified events business to focus all his attention on Treehouse.

“We want to help people who can’t afford traditional education, want to change careers [or] don’t have access to cutting edge design/dev training at their school,” he said.

Carson also reveals that although Treehouse received very little initial funding (in the form of an angel round from some prominent Silicon Valley investors), the venture is already profitable.

“We’re doing $2 million [annually] in revenue,” he says. “We’re profitable, and we’re increasing revenue by a million dollars every three months.”

Image courtesy of Jolie O’Dell.

Filed under: dev

Chances are if you’re working in tech then you’ve spent time deliberating over which of the multitude of conferences, events and shows you should attend in 2012. Time out of the office is a luxury most startups can’t afford, so how can you justify CES, NAMM, Macworld, Mobile World Congress, SXSW, plus the hundred or so others you’re considering?

The rule of thumb is that a few crucial conferences are a must, and that it’s better to go all-in for the best events, like CES, then to spread yourself thin at a lot of lackluster ones. And CES, which begins this week in Las Vegas, is definitely one of the events for tech startups to attend.

It’s hard enough to make a splash with a six-figure budget, so how do you make an impression as a startup at an event like CES? What can you do with a small budget and limited human resources? Luckily, you don’t need a booth to make an impact, you need a plan.

What’s most important about CES is that it’s the one place where everyone in the industry gathers for a few days each year. That means a wealth of opportunities for new business meet-and-greets, a forum to connect with people you’ve only communicated with via email, and a chance to pitch your story to the media.

If you’re spending the majority of your time looking at other people’s products at CES, then you’re not pushing your own. The name of the game is booking 50 meetings in one day instead of 50 days of meetings. If your goal is business development then your focus is building relationships, and there’s nothing quite like meeting face-to-face to do that. When you meet someone the second or third time, and feel like you know each other, that’s when the big integrations happen.

Here are a few other helpful hints to consider for CES, and for any other big conferences on your schedule this year. They aren’t earth-shattering revelations, but they’re often things that busy entrepreneurs forget time after time:

Early bird specials: Show up a places early because there’s a good chance others will too. Hotel lobbies and bars will be packed with people killing time before the show or events start — a perfect opportunity to meet them before things get too hectic.

Be visible: Be your product, your platform and your brand. Wear that company t-shirt, it’s a sure-fire way to strike up a conversation quickly and create a presence (so bring a few extras to give out!).

Be frugal: You have neither time nor money to waste. Book the low cost flight, share an Airbnb with other start-up folks. Don’t have a booth? Tap into your partners to see if you can also share their space.

It’s not a holiday: Focus. Stick to a schedule. Let people know what parties you’ll be attending and forward them invites. You need to go where the people you want to meet are. Ask around. Ask potential partners and journalists where they will be. Ask VCs. Read blog posts about conferences in your field. Organize.

What happens in Vegas stays in Vegas … but it shouldn’t: There’s no point in treating this as a one-off. Be sure to follow-up with the connections you’ve made and work those relationships for when you meet them again.

When the show’s over, you need to come away with more than a stack of business cards, you need to have built some solid relationships. Maybe there’s a deal or two in the bag. That’s when you’ll know that CES was a winner.

Henrik Lenberg is the Vice President of Platform at SoundCloud, the leading social sound platform that lets anyone create, record, promote and share their sounds on the Web. In this role, Henrik is responsible for SoundCloud’s partnership integrations and business development. Henrik joined SoundCloud in 2009. You can follow him on Twitter at: @lenberg.

Filed under: Entrepreneur Corner, VentureBeat

Twitter has just announced a new pilot program that will give developers access to the handles and metadata for Verified Accounts.

Verified Accounts are Twitter accounts held by persons of note — musicians, actors, celebrities and other public figures.

“This opens the door for developers to create new ways for fans to interact with the actors and artists they love and to build the Twitter experience into music and entertainment services,” a Twitter spokesperson told VentureBeat this morning.

In this pilot program, Twitter is distributing Verified Account public data to music and media services, device manufacturers and developers to give them richer ways to engage their users — and to give the Twitter brand a bit of a boost, no doubt.

The first participants in the pilot program are The Echo Nest, a music app platform; Gracenote, which offers a suite of “entertainment solutions” for gadgets and cars; and Rovi, a tech company with a focus on Hollywood and home entertainment.

These three partners, “will scale the distribution of Twitter account data for integration in consumer-facing apps,” writes Twitter employee Jason Costa on the company’s developer blog. “Developers in the Twitter ecosystem can now work with these three partners to integrate Verified Account @handles and Tweets into their music and entertainment services.”

The Echo Nest is integrating Twitter Verified Account data in its Rosetta Stone service (which supports multiple ID spaces). For example, using a bit of code as simple as twitter:artist:justinbieber will allow developers to show tweets from the Biebs inside an app.

Gracenote, which powers iTunes, Sony BRAVIA televisions, HTC mobile devices and Ford SYNC, will be doing something similar, as will Rovi, which is used by a plethora of consumer device manufacturers and service providers.

“Partnerships like these give music and entertainment fans the opportunity to interact with tweets from their favorite artists directly through the media services they use every day,” Costa concludes.

“We expect to add more partnerships to the pilot program, which will extend the Twitter experience to a new set of devices and applications.”

Below, you can see the new data in action on Echo Nest-powered app Discovr:

Filed under: dev, VentureBeat