It is said that you are more likely to leave your wallet behind than your cellphone when leaving the house. Most people are within 15 feet of their phone at any time, even when they are sleeping. One person in seven has been dumped by phone and the incidence of firing by phone is growing.
The phone is so omnipresent it is becoming set to take over as the task-oriented access point for the Web, while the PC, the TV, and other large screen access points will continue to be the choice for video streaming, browsing, and other activities involving heavy graphics or complicated interfaces. It is unlikely that the phone will take over as the online word processor any time soon.
Moving functionality onto the phone: spending
If you are more likely to have your phone with you than your purse, it starts to make sense for the phone to take over some of the functions that you need all the time. It is no surprise that payment is moving on to the phone.
Take your credit card, for example. What is a credit card, really, but a bunch of information held in a form that is awkward to replicate? In effect, it’s an account number combined with an ID. Any modern cellphone has more storage capacity than a hundred credit cards require, so why not move it onto the phone and have it with you the whole time?
However, managing your finances on your phone with a full-scale accounting application might not be convenient; you would really need a bigger screen than is really comfortable to carry around with you. So we have our first driver towards convergence right here. Moving a credit card to the phone and administrating your finances across a variety of web channels not only makes sense, but there are a lot of other advantages to it which we will discuss later.
Traveling
First let’s look at how another card with a magnetic strip has evolved. The humble tube ticket used to be the standard way of getting about in London; now 80% or more of eligible journeys are made using contactless Oyster cards. Contactless cards are quicker and more convenient than putting a card into a slot. So if we are going to move the credit card onto the phone then let it be as a contactless card. And if we have a contactless card, it might as well be our Oyster card as well. That way the Oyster can be “topped up” from the account attached to the credit card and save us a bit more bother. In the world of developing technology, convenience should be king. It is no surprise to find that the Oyster card is administrated over a web interface, so perhaps we should integrate that with our accounting package so that we can see our debits coming out of the bank account, and then drill down into the journeys.
Just making the phone into a ticket is limiting its usefulness, though. If you are connected to the network, the phone could know where you are and alert you just before you reached your stop. This would be handy for those people who tend to fall asleep and go straight past their stop. Also, it could spot if you are going the wrong way (oops, wrong platform and wrong train!). Clearly this could also work if we spread the ticket to cover “over-ground” rail and bus. It could do these tasks already, but it needs to know where you are going. If our application were tied to your calendar, then it would already know where you are going. If you had not put the trip into the calendar, then the phone could check while buying your ticket. It could even set an “out of office” autoreply on your email, add a calendar entry in to let people know where you are, and add the trip to your expenses claim form. Directing you to the right platform, the right train and then letting you know in time to gather your things together before you got there would be easy, too. Even more useful, for those unfamiliar with the tube system, would be help to find your way around the labyrinthine tunnels.
Identification
While we are at it, are there any other contactless cards we could add to our phone? Well, here at dunnhumby there is our security pass. Now, a phone can’t replace all the functionality of my pass because having a photo visible is clearly an important security element. The phone could do the door-opening part of its work, though. I’m less likely to be left behind than the standard pass, so let’s look at how it could work if I remembered my phone but forgot my standard pass.
If I left my pass behind I could swipe my phone at a kiosk at reception. The kiosk could then print out a photo of me, from my badge record, to hang around my neck. Clearly I need to show that I really am me, so I would be asked for a password and a few other details before being given the temporary pass. Now the kiosk could ask for those details, but so could the phone. The phone is, after all, a computer.
We could also look at putting a biometric check on the phone. These are available on laptops, so why not phones? It isn’t 100% secure, but it is better than we have now. Now the phone has an advantage over the kiosk as a place to check my biometric data, because it is somewhere I am more comfortable with the verification information being stored. It also prevents data redundancy, as I only need to have my personal details in one place rather than several. If we are doing security checks with the phone then we want to ensure that loss of the phone does not let it out into the world. What we really need to do is to make this another joint application, with the phone accessing a secure hybrid online interface and backup system on the Web. Clearly this will need the best security we can find, but if it has that then we can start tying the security aspects up with that credit card we were talking about earlier.
Security
So now we have a phone/web application that knows how to identify you and can be used in a quick and easy way to give you access to money, travel and work. This is clearly of value, so what happens if you lose it? Well first, it is a phone so you may be able to locate it: you could call it, or get it to use GPS to tell you where it is. But what if it was stolen? You can can easily cancel it through the phone network. But not only that, your new replacement phone can make itself into a clone of your old one as soon as you have verified your identity. So your new phone/card wallet is safer than the old credit cards you used before, immune to shoulder surfing, and tied into the way you run your accounts. With a credit card someone can clone it and access your account, but a phone can change the code it uses with each transaction so even a thief could intercept the code they couldn’t use it.
Given that our phone knows who we are it could also act as a key. Not just at work, but for our homes, too. You could control access to your house remotely to let people in; your house is connected to the phone network after all. If you were organising a party you could make access to your house part of the invitation email as you pick people out of your contacts on your home PC. They would be able to access their email from their phones, effectively making their own phones into “keys” to get in. You could set up visitor phones to have access once for a limited slot (that party invite perhaps), or regularly on certain days (the cleaner) or on a permanent basis (the boyfriend). You could then remove the permission straight away (during an argument in a restaurant, say) and not worry that they will come busting in later (I Will Survive might never have been written if it had been that easy to change your lock!)
Shopping
Mixing phone access with web applications can help enable spending, traveling, working and security; perhaps it can do more than that. It is already tied into the way you budget, so why not set it up so purchases over $20 require a fingerprint? As we put verification on the phone instead of the kiosk it is easy, and it won’t slow things down as you are holding the phone to wave it near the checkout anyway. If it’s a big purchase, say $100, you could set it up to ask for a PIN number too. It’s your phone so you can set the limits to amounts you are comfortable with. All of this adds security, but could also help you stick to a budget.
Let’s go further than that. Why not decide what weight we are happy to carry in a single shopping trip, and say that if you purchase anything over 10kg you will be willing to pay $5 for delivery. Pickers gather a basket for you at your local store, so if it is heavy why not put the basket we have gathered into the same process? Your phone can exchange contact details and pay at the same time. That is all very well if you are buying everything in one store, and we could do it even with an ordinary credit card and epos (electronic point of sale) access to preferences. What happens if you build up to 10kg across a few shops? If your phone keeps track of your purchases it could ask, when you go over the weight limit in one trip, whether you want the latest purchase delivered. Perhaps, as a slightly more costly service, the picker in store could take the basket you picked from all the different shops and get them all delivered? This could combine with your online mapping application to remind you to get delivery when you are in the stores that do delivery, even if that means popping into a nearby store. It would also tie up to your overall shopping trip and maybe your packing list too. Going on holiday? Make the application remind you when you are near any items you need to buy before you go.
If we are putting cards into our application then including contactless loyalty cards clearly makes sense. What are the advantages? Well, the first is that if your loyalty card and your payment mechanism are on the same phone then you can begin to get credit for all those small purchases that were not worth getting your card out for before. Pulling out your phone to pay is even less work than getting your money out of your wallet, particularly if you don’t have to count the money, just wave the phone. Again convenience is king, and adding convenience is actually providing customers with value.
In order to get at the other advantages of the loyalty card being on the phone we should, perhaps, touch briefly on what a loyalty card is:
- A way for a retailer to say “Thank you for shopping here, do come again”
- A way for you to tell the retailer which offers will interest you so as to keep the offers you are sent relevant
- A way for the retailer to understand shopping habits so that they can become the type of shop that you, their customer, wants
In any interaction between a retailer and a customer, both parties must benefit. If this is not the case then the interaction will not happen. When you buy a loaf of bread the retailer gets your money and you get to eat; both sides benefit. The same is true for a loyalty card. By becoming the place you want to shop the retailer becomes more profitable and both parties benefit. In the way I have described the phone developing I have been talking about the benefits to the phone’s owner. Some of them are overwhelming, and will mean that market forces make them happen, but that will not necessarily make them as convenient as I have described. The bank that puts their credit card onto our phones first has an advantage and people will start to switch to them. This, in turn, will pressure all banks to move their credit cards onto our phones.
This won’t work if there is just convenience to the customer without a clear commercial beneficiary. I mentioned the possibility of your phone keeping track of what you bought and arranging for the shopping to be delivered, if necessary. If a shopping trip stays within a single shop then that shop benefits, but if a trip takes the shopper through multiple shops only the customer benefits from the phone doing this work. Equally, where is the advantage to the product manufacturer in making the weights of its products available to millions of phones? Likewise, if credit cards are being added to the phone, who is going to provide the platform that lets you add them in and remove them when it becomes necessary to, for example, change your credit card provider?
So, who’s going to do all of this work?
Perhaps it would make sense to create a deal similar to that for loyalty cards: customers provide some information about themselves in exchange for having the platform to add and subtract cards and to set limits, alarms, and alerts. Given that loyalty cards are doing some of this kind of work already, it might make sense to extend an on-phone card to include the platform itself. This would allow much closer integration between phone and online applications without the causing the phone to be costing too much in bandwidth. One possible benefit to the loyalty scheme might be the advantage of having control over the branding as settings are changed and alerts read. Given that the platform will require maintenance, and will run within a possession we have already shown is integral to everyday life, there is a need for it to be of the level of quality that only comes at a considerable cost. As customers, we could offer a willingness to receive non-intrusive targeted offers and advertising within the platform interface and additional information about ourselves for targeting those offers in return for the loyalty card company providing the platform. Neither one of these seems too high a cost for the value such a platform would provide for us.
This sort of deal with a loyalty card could have a significant advantage over phone manufacturers producing a home-grown solution: consistency. If convenience is king, then usability is the throne it sits upon. If something is not usable it is not really convenient. Usability comes from things working the way you expect them to without having to think. Given the rate at which we change from one phone to another, following fashions, we do not want to have to learn a new interface every time. We particularly do not want to risk having the way our credit card is protected changing continually. If your favourite loyalty card were the platform it could come with you. It will be a brand to rely upon to back up your phone and not accidentally delete your settings, your identification and half of your life.
Conclusion
Nearly all of the functions to be integrated that I mention here are either in use on phones in other countries or are already in development. For example, contactless capability, referred to as NFC (Near Field Communication) looks like it will be standard for most new UK phones in about 18 months or so; in Japan it is already how everyone uses their phones. This kind of convergence and integration has not really happened yet, but is clearly on the horizon.
So what is the future of web apps? They will tell us who we are, where we are, what we can spend and what we can spend it on. In effect, they can become the ultimate view nannies, always remembering the fact that the user will have set up the guidelines themselves.
The only question is not how far can the future development of web applications take us, but how far do we want it to go?
