My Thoughts on Technology and Jamaica: VISA and Jack Dorsey's Square - Leena's TechCrunch of SME's Mad Money

Sunday, May 1, 2011

VISA and Jack Dorsey's Square - Leena's TechCrunch of SME's Mad Money

Up and Down the city Road, in and out the Eagle
That’s the way the money goes – pop goes the weasel

W.T. Mandale, Pop Goes The Weasel

It looks like the Sony PSN (Play Station Network) hack, the so called Crime of the Century was a bit overplayed as my blog article entitled “AWC Fail, PSN Hack and Nokia Layoff - Murphy Law in a Clash of The Titans” tacitly suggests.

This as it is now coming to light that, despite the six (6) days of delays by Sony in reporting the breach, only ten million (10,000,000) of the reportedly seventy seven million (77,000,000) accounts that were compromised, had credit card information attached to them as stated in the article “Sony: PSN Services return this week, compensating for customers”, published April 30, 2011 10:52 PM PDT by Erica Ogg, Circuit Breaker - CNET News.


Now all I have to do is be vigilant for email spam both in my letter box as well as in my email, as if the hackers did not get Cash, the got something more valuable from all of the seventy seven million (77,000,000) accounts: personal information. So the jury is still out on what fellow bloggers and techies may be calling the The Great Train Robbery (1979) of the IT and Gaming World – in my lifetime!

Apparently Sony PSN does NOT heavily encrypt their Member Data stored on the Servers that power their Cloud-Based Services or ALLOW the use of Credit Card or Virtual VISA Debit Card go-between Payment Services such as Paypal Accounts or other means of protecting your valuable sixteen (16) Digit Card number and the associated Three (3) Digit CVV Code such as that on my Virtual VISA Debit Card from theft!

Sony, Really!?

Very handy, Debit and Credit Cards! Ditto too for online Banking in Jamaica on offer from the Big Three (3) Banks. These are modern day conveniences, up to the point when they are stolen from you as stated in the Geezam Blog article “NFC and M2M - Cashless Society and the Internet of Things”.

It will take some time before Techies and Geeks who live on Sony PSN trust plastic ever again in what is now The Great Train Robbery (1979) of the IT and Gaming World as opined in my blog article entitled “Yahoo Mail and Verizon LTE Failure - The Great Train Robbery with a Chance of Meatballs”.

So despite the bad Press surrounding online transactions and Credit and Debit Cards, it is good to find some news Internationals can look forward to in the future, especially SME’s (Small and Medium Enterprises) who wish to take advantage of Debit and Credit Card Transactions.

Square, the Silicon Valley Start up headed by Twitter co-founder and Chairman Jack Dorsey as stated in the article as stated in the article “Twitter co-founder launches new venture: Square”, published May 16th 2010, Physorg, has ponied up what amounts to a show of confidence by Credit Card Giant VISA.

VISA has decided to play their angelic harp and pump US$37.5 million into Square’s coffers. This as reported by TechCrunch Reporter Leena Rao in the article “VISA makes a Strategic investment in Disruptive Mobile Payment Startup Square”, published April 27, 2011 by Leena Rao, TechCrunch.

This is an interesting development that comes on the heels of a major endorsement by CEO Steve Jobs of Apple Inc, in which he has allowed for the retail of the Square Card Reader in their Retail Stores in on Monday April 2011AD, with the App already free for download on the Apple App Store as stated in the article “Square's Disruptive Payment Service about to get a huge retail boost from Apple”, published April 16, 2011 by Leena Rao, TechCrunch.

Looks like TechCrunch Reporter Leena Rao, like a good bloodhound, has been fascinated, following Square progress, making me realize that I have to add TechCrunch to my RSS Feed!

For those who came late, I had done my blog article on Square entitled “CLARO and Square - The App of Year 2010 and CLARO's Saviour” in which I suggested Telecom Provider CLARO should partner with all of the Big Three (3) Banks in Jamaica, namely BNS (Bank of Nova Scotia), NCB (National Commercial Bank) and RBTT (Royal Bank of Trinidad and Tobago) to offer this service.

I even sent a copy of my proposal to entitled “CLARO and Square - The App of Year 2010 and CLARO's Saviour” to Telecom Provider CLARO that even suggested a way that it could be implemented even on regular feature phones, thus making the SME or even Street Vendor with a basic Mobile Phone and the Square Card Reader be capable of making Debit and Credit Card Transactions.

To date, not even a peep from Telecom Provider CLARO. Oh well!

Hence I have posted it on my blog, hoping someone search about on the InterWebs via the Internet will find my blog article on Square entitled “CLARO and Square - The App of Year 2010 and CLARO's Saviour”.

Hopefully these entrepreneurs working with the help of VC’s (Venture Capitalists), should attempt to implement it for Mobile Feature Phones such a the lowly Flashlight “Go-Go” phone as my deceased beloved Audia Granston used to call the Nokia 1208.

Implementation on smartphones, now pushing 50% of all phones in the US of A according to analyst Nielsen as stated in the Kevin C. Tofel of  GigaOM article entitled 1 in 2 Americans will Have a smartphone by Christmas 2011, published March 26, 2010, 10:41am PT By Kevin C. Tofel, GigaOM should be an easy one-two combo knockout, Wray and Nephew Contender Style.

It would make POS (Point of Sale) Platform more widely available by reducing the cost of ownership by virtue of using the Customer’s Mobile phone as the Equipment Platform in what effectively would be a Cloud-Based Service.

Already, the Bank of Nova Scotia has launched their Mobile Banking Platform based around smartphones and powered by Telecom Provider Digicel since November 2010 as stated in the article “Digicel, Scotiabank Partner on Mobile Banking Product”, published Wednesday November 24, 2010 by Mark Titus, The Jamaica Gleaner.

Bank of Nova Scotia Mobile Banking Platform allows for Mobile Banking by the Customer i.e. checking your Bank Account on the go, Inter- and Intra-Branch Bank Account Transfers etc.

It DOES NOT allow the user to accept Credit and Debit Card transactions on the device from a Customer in much the same way a POS or ATM. In such has hypothetical transaction, Square would work as follows:

1.      Customer A gives Customer B his Debit or Credit Card, Virtual VISA Debit Card via a Paypal Accounts to do the transaction on their smartphone using Bank of Nova Scotia Mobile Banking Platform.
2.      The Customer A on completion of the transaction would sign on the smartphone of Customer B to indicate the completion of the transaction.
3.      Customer A would then receive a receipt in their email to indicate the transaction took place, which they could check on there smartphone, should they have one connected to their email Account

The YouTube video ad from Square entitled “Welcome to Square” illustrates this best with the Apple iPhone.

Effectively, the above transaction, which would take place on Customer B’s smartphone would effectively involve transferring funds from Customer A Bank Account to Customer B’s Bank Account via the Mobile Phone Platform from Account to Account via the smartphone, effectively a M2M (Machine-to-Machine) Transaction as stated in the Geezam Blog article “NFC and M2M - Cashless Society and the Internet of Things”.

Or even accept cheques, a task easily achievable via an app that could take a picture of the front and back of the cheque and its security code and signature of the issues of the cheque to verify the validity of the cheque.

Telecom Provider CLARO and the Big Three (3) Banks in Jamaica are missing out on a slice of a very lucrative market in Jamaica as it relates Debit and Credit Card Transactions, which if  implemented for SME’s and Street Vendors, would spur a rapid adoption of the use of Merchant Accounts with Debit and Credit Cards.

This as more people would realize that instead of walking with Cash when visiting their favorite Street side Vendor, they instead could walk with a Debit or Credit Card, which would be safer than walking with live Cash.

Thus the Local Banks here in Jamaica would be able to make more Debit or Credit Card with lower overheads for maintaining POS Devices, as the SME’s and Street Vendors feature phone or smartphone would be the POS using the Square Card Reader.

The Square Card Reader and app for smartphones does this quite well in the United States of America. So well in fact, that according to the article “VISA makes a Strategic investment in Disruptive Mobile Payment Startup Square”, published April 27, 2011 by Leena Rao, TechCrunch, Square is on target to make a cool US$60 million this First Quarter of 2011.

This is up from a projected US$40 million in Credit and Debit Card Transactions in this First Quarter of 2011 as stated in the article “Square raises US$27.5 million from Sequoia and Khosla, on track to process US$40M in Q1 Payments”, published January 10, 2011 by Leena Rao, TechCrunch.

They have also received US$27.5 million in Venture Capital Funding from Khosla and Sequoia VC Investors. The Second Quarter of 2011 set to see a tripling of business, despite any public qualms about Credit Card security in Cloud-Based Services.

Not bad for a company that is barely a year old that started in May of 2010!

One can thus logically conclude that Credit Card Giant VISA paltry US$37.5 million for a company that clearly is doing well is merely an endorsement with bigger implications that may result in the above idea for Jamaicans and Internationals coming to pass.

This as, more importantly than money, the partnership (May I call it that, VISA and Square?) would result in VISA breaking into the still untapped Mobile payment business for SME’s in the USA and Internationally. This partnership would enable SME’s and Street Vendors with the ability to process VISA Credit Cards or Virtual VISA Debit Card  as described.

These are the same SME’s and Street Vendors who can’t afford to have a dedicated Credit Card Reader or the foot traffic in terms of customers but have a smartphone or feature phone handy.

Thus making the idea of “payment anywhere” a reality!

Square benefits by having the endorsement and approval of a fifty three (53) year old company VISA with contacts worldwide and would thus help to spread Square’s business internationally, inclusive of Jamaica.

Not surprising, as Supreme Ventures Ltd CEO Brian George has plans to upgrade their Wireless Gaming Network to utilize the GSM (Global Systems Mobile) Network of the Big Three (3) Telecom Providers to make Mobile Gaming a reality in Jamaica in the next five (5) years as stated in my blog article entitled “Supreme Ventures and Blackberry Gambling - Rihanna S&M on the Dark Side of the Moon”.

Possibly by the end of 2011, Square, in partnership with VISA, via Local Big Three (3) Banks and powered by Telecom Provider Digicel et al, which by then should have gobbled up Telecom Provider CLARO as reported in my blog article entitled “Digicel buys CLARO Jamaica - Jumanji Exchange is no Robbery” as most likely will go through as speculate in my blog article entitled “AT&T - T-Mobile and Digicel-CLARO Comparisons - Alice Through the Looking Glass The Day After” will be doing business in Jamaica.

After all, Credit and Debit Card fraud in Jamaica at an all time low.

National Commercial Bank has reported a reduction in write-offs for stolen Credit Cards in the Fourth Quarter of 2010 of JA$2.58 million, a reduction of 68% when compared to the corresponding Fourth Quarter of 2009, which saw JA$8.2 million in write-offs as stated in the article “Credit Card Fraud dips”, published Wednesday February 9, 2011 by Dionne Rose, Gleaner Reporter, The Jamaica Gleaner.

Hence these numbers can be seen as an indication of returning consumer confidence in Debit and Credit Card usage. They are a also a result of the removal of the Card Readers at the ATM Machines and the Public Relations Campaign by the Big Three (3) Banks to make Credit and Credit Card Holder more aware of how to protect their Credit Card and Debit Card from theft and cloning.

And there has been the recent arrest of people involved in Credit and Debit Cloning and Fraud as stated in the article ‘Credit Card Racket Busted”, published Friday, January 07, 2011, The Jamaica Observer.

If Square, VISA, the Big Three (3) Banks and Telecom Providers do as prescribed above, they could make some Mad Money (2008) come this Fourth Quarter of 2011 in Jamaica and Internationally and beyond in London, England as the London Olympics 2012 slated to commence on July 27th 2012AD, comes up on the radar.

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