Amazon.com Inc rolled out a $10 credit-card reader and mobile app for brick-and-mortar businesses on Wednesday, marking the latest step by the U.S. online retailer to expand its presence in the physical world.
The move pits Amazon against a slew of rivals, including startup Square, which popularized a payments dongle that allowed small- and mid-sized businesses like food trucks, coffee shops and personal trainers to quickly accept credit and debit cards.
The new point-of-sale system, called Amazon Local Register, would give Amazon crucial data on how U.S. consumers shop offline. More than 90 percent of U.S. retail sales still take place in physical stores, according to U.S. government data.
Amazon hopes to court small businesses in part by charging lower fees than Square and eBay Inc’s PayPal unit. Those who sign up for Amazon’s program before Oct. 31 will be charged 1.75 percent for each card swiped until January 2016.
For those who sign up after October, Amazon will take a 2.5 percent cut of each card swipe, still less than Square’s 2.75 percent flat transaction rate and PayPal’s 2.7 percent.
Amazon.com Inc will offer 3D printing services that allow customers to customize and build earrings, bobble head toys and other items from third-party vendors using a new personalization option on its website.
Most of the more than 200 items available on the company’s new 3D printed products store, which was rolled out on Monday, can be customized using a new feature that allows users to rotate and change the item they are viewing.
Before it is printed by one of Amazon’s sellers, users can customize a product like as a bobble head figure by changing its skin and eye color, hair style and outfit, Amazon said.
“The customization is something we’re keenly interested in,” said Petra Schindler-Carter, director for Amazon marketplace sales, speaking in an interview. “We’ll always look for new applications for that.”
Amazon, which has more than 240 million users, has expanded its marketplaces division to include new areas such as fine art and wine. It is part of Amazon’s larger investment into new areas like mobile services and original content that led to its larger-than-expected second-quarter loss last week.
The new printing option taps into a broader “Maker movement” among tech entrepreneurs in northern California, and to some extent Europe, that is focused on customizing 3D objects rather than development software or mobile applications.
3D printers have gained in popularity on Amazon Supply, a wholesale site for businesses. That interest led Amazon to offer customers an 3D print option, Schindler-Carter said.
Consumer and business shoppers can pay for products directly via bitcoins or through Coinbase, a third-party payment processing company, Dell said.
Buyers can pay for products through Bitcoin wallets or by scanning a QR code with a smartphone.
The volatile Bitcoin has had its share of controversies and exchange shutdowns as the currency matures. Companies like Overstock.com, Newegg, Expedia and some Amazon storefronts accept Bitcoin as a form of payment. But major retailers like Walmart and eBay have not warmed up to the idea. The value of one bitcoin was around $630 as of Friday, according to multiple cryptocurrency website.
There are some advantages to paying via Bitcoin. The form of currency is accepted around the world, and for Dell, the payment-processing cost is less than with credit cards.
But the form of payment has its quirks.
“Due to the nature of the Bitcoin network, once you initiate a Bitcoin transaction you cannot change or cancel it,” Dell said on a terms and conditions page.
Customers could seek refunds in the case of canceled transactions or product returns.
“For a qualifying return of product paid for in Bitcoin, any refund due will be remitted to the purchaser via check in U.S. Dollars for the full amount of the purchase price paid at the time of the original transaction, less any applicable restocking fees,” Dell said.
High profile cases of hackers seizing sensitive customer data from companies, such as U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.
Increasingly, corporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.
The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.
Those numbers represent a sliver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.
The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.
“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”
Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.
“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.
Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS Labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.
Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target, Neiman Marcus, and other merchants, he added.
The company rolled out a set of tools for software developers on Wednesday that allows businesses to deduct payments directly from a customer’s PayPal account.
The developer kit is the first big push from Braintree since it was bought by eBay for $800 million last year to help PayPal, eBay’s payments division, expand its presence on mobile devices.
Eliminating the need for mobile shoppers to type in their credit card details on their phones should help boost sales, Braintree Chief Executive Bill Ready said in an interview.
This is especially critical as consumers spend more time on their smartphones, a trend that is forcing developers to design a “fundamentally different computing experience” for the smaller screen, Ready added.
Braintree processes payments for businesses including car service Uber and online home-rental marketplace Airbnb.
The cuts, which followed recent reductions to $149 and $49, put Wal-Mart’s prices 50% less than Apple’s for the iPhone 5S and 71% less than the iPhone 5C’s list.
Both models are available only at Wal-Mart stores — not on the retailer’s website — and the prices are for the entry-tier devices that sport 16GB of storage. A two-year commitment to a mobile carrier contract is required to get those prices, so the offer is good only for new customers or current customers who are eligible for a subsidized upgrade.
Wal-Mart also cut in-store prices of the 32GB iPhone 5S and 5C to $129 and $199, respectively, retaining the $100 differential that Apple maintains between its storage allotments. Those prices are 33% to 35% under Apple’s suggested retail prices.
Most analysts expect Apple to reprise 2014′s schedule and roll out one or more new iPhones this September — with the new models dubbed “iPhone 6″ in keeping with Apple’s alternating naming convention that uses a numeral in even-numbered years, then adds an “S” in odd-numbered years — and Wal-Mart may be attempting to sell off inventory in advance of the arrival of new models. Or it may simply be trying to attract shoppers to its stores.
Asked whether the discounts were designed to lower inventory or drive store traffic, a Wal-Mart spokeswoman said only, “We’re providing our customers with the affordable technology that they’re looking for.”
The fact that the new prices are not available online suggests that driving foot traffic to stores may be the primary goal.
Another possible factor is the fact that iPhone sales in recent years have flagged in the quarter preceding the introduction of new models. Last year, for example, second-quarter iPhone unit sales were down 17% quarter-over-quarter; in 2012, the sequential decline was 28%.
In the last two years, Apple has launched new iPhones near the end of the third quarter.
Apple has noticed the downturns. The company acknowledges that, as speculation about the next iPhone’s features starts to build (something that has already started to happen this year, with many people assuming that the iPhone 6 will have a larger screen), some customers postpone purchases until the newest hardware reaches retail. “We’re reading the same rumors and speculation that you are about a new iPhone, and we think this has caused some pause in customers purchasing,” admitted Peter Oppenheimer, then Apple’s CFO, during a mid-2012 conference call with Wall Street analysts discussing the second quarter.
New prices for the Surface Pro 2 — which debuted last fall — now run $799 for the model with 64GB of storage and $899 for the 128GB configuration. The cuts represent discounts of 11% and 10%, respectively.
Microsoft is scheduled to start selling the Surface Pro 3 it’s-a-tablet-it’s-a-notebook on Friday. The company has been taking pre-orders for the device since the Surface Pro 3′s unveiling on May 21.
The Surface Pro 3 tablets start at $999 for the 128GB model and end at $1,299 for 256GB of storage. Both devices sport a Core i5 processor, the same one used in 2013′s Surface Pro 2.
Three other Surface Pro 3 tablets won’t ship until August, Microsoft has said, including the $799 64GB model that runs an Intel Core i3 processor, and two configurations boasting the Core i7 CPU, priced at $1,549 (256GB of storage) and $1,949 (512GB).
The Surface Pro 3 devices available this week will be available in Microsoft’s own brick-and-mortar stores and those of retail partners like Best Buy, and on Microsoft’s online outlet.
When the $799 entry-level Surface Pro 3 reaches retail later this summer, Microsoft will probably slash the price of the Surface Pro 2 tablets even further to empty its inventory.
Microsoft has promised to support the Surface Pro 2 with software and firmware updates until April 10, 2018.
The Surface Pro 2 can be ordered through Microsoft’s website. The prices do not include a cover keyboard, which is essential for running Windows legacy applications.
MasterCard Inc, the world’s second-largest credit card association, sees business booming from selling data to retailers, banks and governments on spending patterns found in the payments it processes, a top executive told Reuters.
MasterCard, which handles payments for 2 billion cardholders and tens of millions of merchants, uses that information to generate real-time data on consumer trends, available more quickly that regular government statistics.
“It is an incredibly fast growing area for us,” Ann Cairns, who heads MasterCard’s business outside North America, said in an interview, stressing that the company respects cardholder privacy, using anonymous data rather than personal information.
MasterCard does not give figures for its information services products but “other revenues”, which include the sale of data, grew 22 percent in the first quarter of 2014 to $341 million, outpacing the growth of total revenue dominated by payments processing, which rose 14 percent to $2.177 billion.
Cairns said clients for the data include retailers, banks and governments, with MasterCard tailoring it to their needs.
“Retailers are fantastic at using the data they have available about how people shop in their store, how their inventory turns over, but what they don’t know is what happens outside their store,” she said. “The data we’ve got is ubiquitous across the whole market. We can help retailers see what they need to do to capture more sales.”
Cairns, 57, a statistician by training who joined MasterCard in 2011 after helping manage the disposal of Lehman Brothers assets in Europe, revels in the insights real-time card data can provide, such as London’s popularity as the world’s top travel destination and a rise in spending on experiences such as eating out or going on holiday rather than shopping in stores.
MasterCard has recorded a spike in spending in Brazil on groceries and a drop in spending on luxury goods as the price of food has risen ahead of the World Cup, she said, the kind of insight valued by companies such as Nike and Adidas that are hoping to sell $300 soccer boots during the competition.
While MasterCard expands in “big data”, Cairns sees no slowdown in its traditional business of processing payments, with plenty of potential for growth as 85 percent of consumer transactions are still made by cash or check.
“Moving money and doing it safely and securely is so deeply cared about by so many people around the world that it will be a business that has fantastic value now and for years to come,” said Cairns, who previously worked at Citigroup and ABN Amro.
Google stands to gain huge amounts of geographic data for information as wildly diverse as the health of farm fields and congestion of parking lots, by acquiring the super-smart satellite imaging and analytics company Skybox Imaging.
The companies said Tuesday that Google was paying US$500 million cash to acquire 5-year-old Skybox, which claims to have made the world’s smallest high-resolution imaging satellite, which collects a range of images and video of the world’s daily goings-on.
The deal has not yet closed and is subject to customary closing conditions.
Google, in its announcement, said that Skybox will help keep Google Maps accurate with up-to-date imagery. Google already uses satellite imagery for its Maps and Earth software, but the data can be between one and three years old.
But the possible applications of Skybox’s technology go way beyond Maps. “Over time, we also hope that Skybox’s team and technology will be able to help improve Internet access and disaster relief — areas Google has long been interested in,” Google said.
Those are oft-cited goals at Google now. The company said the same thing after it recently acquired Titan Aerospace, which makes drones that fly at 65,000 feet to beam Internet access to underserved parts of the world.
Skybox’s technology, like Titan’s, may also hook up with Google’s Project Loon, an experiment involving high-altitude balloons for Internet access.
And it could give Google a big leg up against Facebook, which has its own drones for Internet and other projects.
But Skybox’s technology is impressive by itself. By analyzing its images and video, the company provides intelligence on all sorts of industries and activities on Earth — data that Google could eventually incorporate into any number of its products.
Skybox, for instance, looks at changes in the number of cars in a retailer’s parking lot, or the size of stockpiles of natural resources in ports, to provide financial trading intelligence.
“The time is right to join a company who can challenge us to think even bigger and bolder, and who can support us in accelerating our ambitious vision,” the Mountain View, California-based Skybox said in its announcement.
Speaking at the Computex trade show in Taipei, Microsoft’s Nick Parker, who handles the company’s partnerships with device makers, said the new handsets could be out by the end of the year.
Compared to current models, which are in the “fours, fives and sixes,” he said referring to prices between $400 and $699, the new phones would have price points in the “ones, twos and threes.”
Asked to clarify if he was referring to end-market prices without carrier subsidies, Parker said he was.
He didn’t identify the manufacturers that would be bringing the phones to market, but there’s a good chance they are among nine companies Microsoft signed up to its Windows Phone development program earlier this year.
In addition to existing partners Nokia, Samsung, HTC and Huawei, Microsoft added Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE.
Some of the new partners have significant market share in developing countries where phones generally have lower prices than in developed markets.
Microsoft launched the latest version of its Windows Phone operating system, Windows Phone 8, in late 2012 to critical praise. The operating system was slow to catch on with consumers though, perhaps due to the absence of several popular apps on the platform, but has been slowly increasing its market share.
Windows Phone had a 3 percent share of the smartphone market in the fourth quarter of 2013, up from 2.6 percent in the last three months of 2012, according to IDC. In contrast, Google’s Android dominated the smartphone market at the end of 2013 with a 78.1 percent share. Apple’s iOS was in second place at 17.6 percent.
IDC forecasts Windows Phone will continue to increase its market share to hit 7 percent in 2018.
Following an attack disclosed last week that exposed sensitive information of up to 145 million people, the auction giant is scrambling to repair several other problems reported in its vast network by security enthusiasts.
“As a company, we take all vulnerabilities reported to us very seriously, evaluating any reported issue within the context of our entire security infrastructure,” wrote Ryan Moore, lead manager of eBay’s business communications, in an email to IDG News Service.
EBay has long been a target for cybercriminals. It is the seventh most visited site in the U.S, according to statistics from Amazon’s Alexa Web analytics unit. Its combination of a marketplace and payments platform, PayPal, means it holds sensitive data and poses opportunity for fraudsters.
Three U.S. states — Connecticut, Florida and Illinois — are jointly investigating eBay’s data breach, a sign that regulators and law enforcement are taking a keen interest in how consumer data is protected following Target’s data breach last year.
EBay’s size puts it in the league of companies such as Facebook, Google and Microsoft. All run large networks constantly prodded by “black hat” hackers, those who are seeking to damage a company or profit from attacks, and “white hats,” who alert companies to problems.
Yasser Ali, a 27-year-old who lives in Luxor, Egypt, said it took him all of three minutes last week to find a serious vulnerability that could let him take over anyone’s eBay account if he knows a person’s user name, which is public information.
Ali shared a video with eBay showing how the flaw could be exploited, he said in a phone interview Tuesday night. He hasn’t received a response from eBay, but said the video was viewed by company officials 17 times, according to a statistics counter on the clip. Moore said eBay has now fixed the bug, and Ali plans to release details of it.
Firms known as data brokers collect and sell information about “nearly all” U.S. consumers, making potentially harmful conclusions about people largely without their knowledge, U.S. regulators said on Tuesday.
The Federal Trade Commission urged Congress to pass legislation that would enable consumers to learn more easily how data brokers collect, use and sell their data, to correct it or to opt out of the process, especially when it comes to sensitive information such as about their health status.
The commission’s report relied on information shared by nine data broker companies, which do not interact directly with consumers but collect data to inform other companies’marketing efforts, to verify consumers’ identity or to detect fraud.
The companies were Acxiom Crop, Corelogic Inc, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf, and Recorded Future.
“You may not know them, but data brokers know you. They know where you live, what you buy, your income, your ethnicity, how old your kids are, your health conditions, and your interests and hobbies,” said FTC Chairwoman Edith Ramirez.
“This is an industry that operates in the dark… The sheer magnitude of what’s taking place I think is quite astonishing.”
The review did not find illegal activity from the brokers but raised concerns about the scope of collection, the way brokers segment consumers into broad racial, socio-economic and even political categories, and how those “troubling classifications” could harm consumers.
The FTC found that data brokers collect and sell – to advertisers and each other – billions of data points about nearly every U.S. consumer, gathered through retailers, social media, Census figures, magazine subscriptions and other sources.
Through this vast trove, consumers are classified by race, income, age, health conditions and other categories like “financially challenged,” which include single parents; “rural everlasting,” which are single people over the age of 66 with “low education attainment and low net worth”; or “urban scramblers,” which include a high concentration of low-income Latinos and African Americans.
While such data can help advertisers better target potential buyers, it could also prompt discrimination by directing some consumers to inferior customer service or offering different prices for the same goods, the FTC said.
For instance, such categories could lead to some consumers seeing ads for subprime loans while others see ads for credit cards, or insurance companies could use marketing categories like “bike enthusiast” or “diabetes interest” to screen consumers.
Democratic U.S. Senators Jay Rockefeller of West Virginia and Edward Markey of Massachusetts in February introduced a bill that seeks to give consumers more control over data collection.
J.P. Morgan, Citigroup and Barclays are the lead underwriters of the IPO, the company told the U.S. Securities and Exchange Commission in a preliminary prospectus.
GoPro, founded in 2004, sells its products through specialty retailers who target surf, ski and motor sports enthusiasts.
The San Mateo, California-based company’s cameras are also used by the Discovery Channel, ESPN and other networks.
GoPro’s founder and CEO Nicholas Woodman and his family are the biggest stockholders with a 49 percent stake. The company’s other prominent shareholder is Foxteq Holdings Inc, a unit of contract manufacturer Foxconn Ltd.
GoPro’s revenue almost doubled to $985.7 million in 2013. The company is also profitable, earning $60.6 million, or 47 cents per share.
The filing did not reveal how many shares the company planned to sell or their expected price.
GoPro said it planned to use the IPO proceeds for working capital, repaying debt, and to acquire or invest in businesses, technologies or assets.
The online payment company PayPal is getting a much over due new look and its first-ever global marketing push as parent eBay Inc tries to grab back attention from the growing number of rivals piling into the mobile payments market.
The brand overhaul includes a more vibrant, simple logo designed to suit mobile phones and wearable devices like wristbands and PayPal’s first-ever television ads in the U.S. market. The campaign will last throughout the summer and into fall 2014.
The move comes as PayPal, the dominant online payment processor, shifts its focus toward mobile phones and the fast-growing market to enable consumers to pay for physical goods and services with their smartphones.
“If you look at us visually online, we look very similar to financial service companies,” said Christina Smedley, vice president of global brand and communications at PayPal.
“Our brands and the ways consumers are going to experience them, the way people are going to touch us, is going to change hugely in coming years,” she said.
The company declined to specify the total cost of the marketing campaign, but said it was the largest ever planned for PayPal, which accounts for a large chunk of eBay’s overall stock market value and its growth outpaces the rest of the company.
The U.S. mobile payment market will reach $90 billion by 2017, up from $12.8 billion in 2012, according to Forrester Research. Research firm Gartner expects the global market will see a more than threefold rise by 2017 to $721 billion.
That potential has attracted the likes of Amazon.com Inc, Google Inc and Square Inc. Between 3 percent and 7 percent of consumers worldwide use in-store mobile payments, but up to 27 percent are willing to try, according to Bain & Company.
With 143 million active users at the end of 2013, PayPal is the dominant online payment provider, but it is not used widely for in-store payments in the United States, Bain said.
“Our research showed that people needed to be reminded of some of the core benefits that we have and this felt like a way we could bring it together,” Smedley said.
This is the first makeover for PayPal since 2007. The logo was developed by the firm led by designer Yves Behar, who is also chief creative officer for Jawbone, a maker of headsets and a fitness-tracker product.
Target is upgrading the security of its private label payment cards and implementing other network improvements as it seeks to restore confidence after one of the largest-ever data breaches last year.
The retailer will upgrade three types of payment card it uses to support chip-and-pin technology, where a microchip on the card holds customer data to improve security. It will also update its payment terminals to accept chip and pin, at a total cost of $100 million.
Visa and Mastercard have set a deadline for U.S. retailers to be able to accept chip-and-pin cards by October 2015. If the deadline isn’t met, the liability for fraudulent purchases made with chip cards resides with retailers.
Target spokeswoman Molly Snyder said Tuesday the company already had plans to accommodate chip-and-pin cards, widely used in Europe and elsewhere, but has accelerated its technology upgrade by about six months.
Avivah Litan, a vice president at Gartner with expertise in payments, said chip-and-pin cards would in theory have prevented Target’s data breach in which it lost 40 million payment card records via malicious software on its network.
She said Target’s move is more than symbolic even though the retailer was already moving to chip-and-pin. It gives customers a more secure way to pay using Target’s branded cards, she said.
“It’s good for consumers, and in the end, probably going to be good for Target,” Litan said.
Target has been under intense pressure to shore up its network following the breach. It is facing 80 civil lawsuits and inquiries from regulators including state attorneys general, the Federal Trade Commission and the U.S. Securities and Exchange Commission, according to its March 14 annual report.
Starting next year, Target will upgrade its debit cards, called REDcards, which account for around 20% of Target’s sales, to chip and pin.
The cards include a credit card and a debit card that Target issues and can only be used at its stores. The upgrade also applies to a credit card co-branded with MasterCard that can be used anywhere, Snyder said.
Target is also rolling out new software and payment terminals compatible with chip and pin to its 1,797 U.S. stores by next September.
So far, cybercriminals haven’t been able to steal sensitive data from the microchip of chip-and-pin cards, although some computer security researchers have found ways to attack the system.
Visa and MasterCard have long championed chip and pin as a replacement for magnetic stripe cards. Data can be easily copied from the magnetic stripe with off-the-shelf equipment.
Chip-and-pin cards still have a security hole, however: most still have the magnetic stripe, since they wouldn’t work at most U.S. stores today without it. That could change as the U.S. moves toward full chip-and-pin compliance, but the transition could take years.