|From: Glenn Petersen||11/26/2019 10:12:14 AM|
‘Low-Code’ Becomes High Priority as Automation Demands Soar
CIOs are expanding the use of tools that let noncoders create applications Chief information officers, on the hook to automate manual and repetitive business processes, are increasingly turning to tools designed to create applications quickly, without the sweat of writing and debugging lines of code.
Collectively known as “low-code,” these tools have been available in some form for decades. But they have grown more popular with information-technology staff and other departments as workplace automation grows and young, mobile-savvy people join the workforce.
With low-code, employees can quickly make apps by picking, dragging and dropping from a collection of ready-made software building blocks.
Johnson Controls International PLC, an Ireland-based industrial and technology conglomerate that makes heating, ventilation, and air conditioning systems, tapped nontech employees like engineers to create low-code dashboards that track installations, record project metrics and manage service calls, said Chief Information Officer Nancy Berce.
The company, which has about 105,000 employees across more than 100 countries, set up guardrails so the low-code apps don’t disrupt the resiliency of its central systems, she said.
“A lot of people are creating a lot of good things; how do we start to share that and make that more available to broader users? We haven’t quite figured that one out yet. That’s the next level of maturity,” Ms. Berce said.
Freeing up staff to focus on core technology issues was one of the reasons St. Luke’s University Health Network in Pennsylvania started using low-code, said CIO Chad Brisendine.
“There’s always a bigger appetite for IT than what we’re able to provide. I see this as helping meet that demand,” Mr. Brisendine said.
IT employees turned to low-code to build more than 20 applications using Microsoft Corp. tools. None of them took more than 20 hours to create.
It took eight hours to make an app that pulls information from the hospital’s systems, including a Workday Inc. platform, to track and send reminders to staff on continuing medical training, a requirement for doctors to retain their license. The author, an analyst in the IT department, didn’t know how to code, Mr. Brisendine said.
Mr. Brisendine next year plans to expand low-code training to more business units within St. Luke’s, which has about 15,000 employees.
Companies including Siemens AG , Appian Corp. , Pegasystems Inc. and Salesforce.com Inc. also provide low-code tools.
Forms of low-code have been around for decades, but combining it with the use of application programming interfaces, chunks of code designed to connect systems and platforms and share data, has made it easier for those not conversant in C++ or Java to create applications with a punch, said Jason Wong, senior director at research and advisory company Gartner Inc.
Gartner is projecting that low-code will account for more than 65% of application development activity by 2024.
David Hoag, CIO at Chicago-based Options Clearing Corp., a central clearinghouse serving as a backstop for trades in the options market, said making low-code applications is as easy as dragging and dropping widgets.
The company used low-code to develop a visitor-registration system as part of an “app a day” program, where technology teams work with other departments to create applications to solve pressing business problems. The system, created in less than a day, registers visitors, logs arrival and departure times, captures visitor and badge information, and helps the facilities team generate reports on visitor activity.
Similar commercial software was quoted at costing between $30,000 and $50,000 a year, Mr. Hoag said.
OCC started building low-code apps in 2015 and today uses about 30 of them. Mr. Hoag sees low-code’s use spreading beyond IT.
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|From: Glenn Petersen||8/19/2020 6:51:46 AM|
|Coronavirus has turned the humble QR code into an everyday essential|
QR codes have been dismissed as a marketing gimmick – but in our touch-free world, they’re proving their worth
By VICTORIA TURK
Friday 14 August 2020
Venture outside and you’ll soon see them. Printed on posters and signs, pasted on pub walls and hotel lobbies, sellotaped to picnic tables in beer gardens: QR codes.
As the hospitality industry begins tentatively to open up, bolstered in the UK by the government’s ‘Eat Out to Help Out’ discount scheme, restaurants and hotels are turning to technology to deliver a dine-in experience that is as touch-free as possible. Suddenly, a card menu that gets passed through the germy hands of one customer to the next doesn’t seem so appealing. QR codes – the black, barcode-like squares that can point to text or a website – have been around for a while, but was previously dismissed as largely a marketing gimmick, at least in a consumer context. Now the QR code has found its time to shine.
“Up until now a QR code, certainly to me, has just been a collection of black and white patterns on a billboard or on a bus stop or wherever,” says Edmund Inkin, who co-owns three hotels across Cornwall and Wales under the brand Eat Drink Sleep. “I’d never really thought of using them.” Now, visitors to Eat Drink Sleep hotels can access the food menu, drinks list and details on room bookings via QR code (QR stands for Quick Response).
Nils Engelking, cofounder of Egoditor, a mobile marketing company that runs an online QR code generator and works with companies to implement them, says the coronavirus pandemic was something of a rollercoaster for the business. First, customer numbers dropped off, as shops and events were forced to shut down. The main function of a QR code, after all, is to link the digital world with the physical: people can scan the code in real life to get more information on their phone. “So if there’s no sort of life out there and people gathering, QR codes are not that much necessary any more,” Engelking says.
As lockdowns around the world started to ease, however, the QR code found itself in its element: it was the perfect touch-free medium. It allowed people to interact with the world around them, while only touching their own smartphone. “Coronavirus just gave it a big push in terms of adoption in terms of technology and also in terms of the end customers,” Engelking says. He says that Egoditor has seen a huge increase in adoption, with a 25x increase in signups from restaurants in June compared to February, and 7x increase in signups from hotels .There has also been an increase in the number of customers actually scanning the QR codes, which Engelking puts down to them being implemented for more useful functions.
Many restaurants and hotels are using QR codes to display menus, or to direct people to booking pages where they can order food or reserve rooms directly online. They are also starting to be used to help with contact-tracing – keeping a record of who has been where in order to be able to track those who may have come into contact with the virus. The NHS Test and Trace service’s new app, which is currently entering trials, will allow users to scan a QR code at venues in order to keep a log of where they’ve been. Currently, venues on the Isle of Wight are able to create a QR code to work with the Test and Trace system.
Some offices are also turning to the tech to help with bringing people back to work. Software company SAP, which has reopened two of its buildings with a very limited capacity, has incorporated QR codes into its broader strategy of signage, sanitiser and distancing, in order to inform employees of updates. Scanning the QR code takes employees to information on the latest procedures and processes in place at the office.
Facilities manager Sarah Woodman says the QR code approach means the company doesn’t have to print out so many materials and results in a touch-free experience. “People don’t have to touch things – they’ve got their own phone, they can scan it, they can touch their own phone.” One other advantage is that you can easily update the information that the QR code leads to without changing the code itself. When SAP started using a different car park, for instance, Woodman was able to inform employees simply by tweaking the text that the QR code pointed to.
As well as perhaps finally finding their killer app, QR codes have benefited from technology moving on somewhat since they first began appearing in marketing materials. Whereas previously you may have had to install a special QR code-reading app in order to scan the codes, many newer phone models will now do this automatically through the main camera function. Engelking says that businesses are also using them better: if you hide a QR code in your marketing designs with no clear call to action, people won’t know what to do with it; if you put it front-and-centre on your restaurant table explaining that it’s how to access the menu, people will.
One of Inkin’s main concerns in using the tech was whether it would fit with the atmosphere of the hotels; he wanted to make sure not to lose the human element of service. For this reason, he says, Eat Drink Sleep is generally “relatively resistant” to technology, using it only where it really enhances what they do. They considered online ordering apps, but decided it took too much of the dining experience away, opting instead to use a QR code menu but still have people taking diners’ orders at the table (from a safe distance).
The hotel company also had their QR codes laser-cut onto wooden cards by a local company, to match more with its aesthetic. Inkin keeps some single-use paper menus to hand for people who really don’t want to use the technology, but he says that most visitors are more than happy to. He imagines that the company will continue using the tech even after coronavirus is a concern. “I think because it’s very likely we’re going to be needing to use this for 6, 9, 12, 18 months, and that these types of guidelines will be in place for us to be operating in a Covid-safe way, it’s going to become fairly hardwired both into how we do things and how our guests do things, what they expect.”
Some businesses have gone beyond QR codes to use other touch-free tech. Hotel chain citizenM has launched a “contactless” experience through its new app, which lets visitors check in, create their own keycard, order food and drink, and even control the lights and air conditioning in their room. The app, says Casper Overbeek, director of customer experience, was already in the works before the pandemic hit, but the company fast-tracked some features relevant to a contactless stay when this suddenly became more urgent. “It really is a way to say ‘listen, you don’t need to touch anything you don’t want to,’” he says.
Overbeek believes that even if contactless features are no longer necessary or desirable post-Covid, the frictionless experience offered by tech will be. “Any feature that we’re now building to make contactless possible actually also has a convenience element to it, and I’m sure that the convenience element will stay.”
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|To: Glenn Petersen who wrote (1694)||8/19/2020 9:21:32 AM|
|From: Glenn Petersen|
|Instagram launches QR codes globally, letting people open a profile from any camera app|
Don’t open Instagram to find a profile
By Ashley Carman @ashleyrcarman
Aug 18, 2020, 8:30pm EDT
Instagram is bringing QR codes to the app. Users can now generate QR codes that’ll be scannable from any supporting, third-party camera apps. It first launched the product in Japan last year. The idea is that businesses can print their QR code and have customers scan it to open their Instagram account easily. From there, people can see store hours, buy items, or just follow the account.
To generate your QR code, go to the settings menu on your profile and tap QR code. You might still see Nametag there, but eventually, it’ll become QR code. You can then save or share the image. Instagram previously deployed a similar system called Nametags, which were internal QR-like codes that could only be scanned from the Instagram camera. It’s now deprecating the feature entirely.
Multiple other apps employ their own QR-like system, including Twitter, Facebook, Snapchat, and Spotify. (Only Twitter supports actual QR codes.) But with the pandemic, it’s unsurprising to see Instagram embrace the more open QR system. Restaurants have begun leaving QR codes out instead of their physical menus, and other businesses request that people scan a QR code to load their website. While Nametags might have worked for this purpose, QR codes make it easier for people to scan and make them less reliant on taking out the Instagram camera to access information.
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|From: Glenn Petersen||10/7/2020 3:19:23 PM|
|QR code...and stuff that is OT.|
SoftBank wants to burn money
Masayoshi Son zeros in on Japan, where he is ready to lose billions in a battle to conquer cash
WATARU SUZUKI, Nikkei staff writer
SEPTEMBER 9, 2020 06:02 JST
With his reputation on the line, Japan's most controversial tech investor needs a win with the PayPay app. (Illustration by Nakako Shiotsuki/Michael Tsang)
TOKYO -- In its most extreme form, a psychological condition known as chrometophobia -- fear of money -- can take over the lives of people who suffer from it. They recoil from the sight of cash, flinch when touching or coming into contact with paper bills and coins.
SoftBank Group, Japan's most aggressive venture capital investor, thinks they might be onto something. Its latest multibillion-dollar technology bet is being marketed on a simple proposition: In the age of the coronavirus, cash is immensely dangerous.
"Many people don't want to touch paper bills and coins that may have been touched by someone else," said Ichiro Nakayama, CEO of the new SoftBank-created digital payment app PayPay, in a livestreamed news conference in July. "Cashless is the way to enable touchless and contactless."
Cash phobia could not have come at a better time for SoftBank's massive bet on digital payments in Japan. Cashiers across the country have begun asking customers to take extreme sanitary measures when paying, such as placing bank notes on a tray, wiping the tray with a sanitizer after each transaction, often while wearing plastic gloves. In South Korea, people have been cooking bank notes in microwaves to disinfect them.
That is all very encouraging, according to Nakayama. "Sixty-nine percent of respondents said that they felt resistance for bank notes and coins from the viewpoint of public health," Nakayama told the news conference devoted to PayPay's progress in conquering cash.
Hard cash: Japanese shops and venues, like this Karaoke box, have imposed extreme sanitary measures on physical money.(Photo by Takaki Kashiwabara)
SoftBank has invested over $1 billion in PayPay and taken nearly $800 million in losses in the year ending in March. It is wagering that it can succeed in popularizing mobile payments in a country where nearly a dozen other competitors have failed. Japan has been famously resistant to mobile payments technology: Consumers prefer withdrawing money daily from convenient ATMs to scanning a QR code on their phone. Unlike in China and India, where mobile payments quickly entered the mainstream, in Japan, they remain 1% of a $5 trillion economy.
Curing Japan of its cash addiction would be incredibly lucrative; bringing the mobile payment penetration rate on par with China's would create a $1.3 trillion industry.
SoftBank, meanwhile, desperately needs a win. It is struggling after a series of technology bets gone badly, including troubled office-sharing company WeWork and Uber Technologies' underperformed initial public offering. Despite vowing to pivot toward a cautious and defensive strategy, it hit headlines this week with reports identifying the company as the "Nasdaq whale," a massive buyer of tech stock options whose market-distorting activity caused share prices to skyrocket. Undaunted, it is quietly putting its chits on the roulette wheel once again -- this time, wagering hundreds of millions of dollars that it can transform Japan from a hinterland of cash hoarding to a digital payments powerhouse. And the coronavirus has become a major talking point for PayPay executives.
"COVID is a gift to cashless payment providers," said Michael Causton, a retail analyst writes on research platform Smartkarma. "Retailers want to protect staff from unnecessary contact with customers and contactless payments help this tremendously. Consumers, too, of course, want to avoid handling cash from stores to reduce the chances of contamination."
Winner takes all
At a glance, PayPay is the kind of mobile wallet commonly seen across Asia. Users download the app, link their bank account and top up money to their PayPay account. They can make payments either by scanning a QR code at a shop or having a clerk scan the app's unique bar code.
Since launching in late 2018, PayPay has clinched the lead in Japan's crowded mobile payments market. The app hit 30 million registered users at the end of June, equivalent to a quarter of the Japanese population. PayPay's distinctive red and white logo is increasingly visible in restaurants, at barbers and dry cleaners, and is now accepted by more than 2.3 million merchants across the country. Over a billion transactions have been processed
Tangible signs of progress are a welcome sight for SoftBank under the helmsmanship of controversial founder and Chairman Masayoshi Son. Over two decades, Son's early bet on Chinese e-commerce giant Alibaba forged his reputation as a technology visionary. In reality, his strategy is often centered around endless rounds of financing in companies with unproven business models, from Didi Chuxing in China to Grab in Southeast Asia, which in turn deploy the cash in desperate and expensive fights for market share: "cash burn," in the parlance of the tech industry. And PayPay's strategy is solidly part of the traditional SoftBank playbook. The aggressive promotions and sales drive have turned PayPay into a cash cremation machine. The company logged a net loss of 82 billion yen ($771 million) for the year ended March.
The object of cash burn -- a strategy of subsidizing the users of a service -- is to achieve scale quickly. Users will not use the app if a lot of businesses are not accepting it, and businesses will not start accepting it unless a lot of buyers use it. The solution to this chicken-and-egg problem is solved by buying large numbers of users and merchants, who hopefully will keep using it even when the incentives run out.
Most companies would grow queasy at the thought of losing nearly a billion dollars per year handing out money. But cash burn is part of SoftBank's DNA. Some employees compare PayPay's aggressive tactics to the days when SoftBank gave away free modems for its broadband service in the early 2000s. "The ability to scale the service with speed and money is classic SoftBank," one former executive said.
As an investor, SoftBank has been an enthusiastic proponent of burning cash, spending freely to back its champions in virtually every tech market-share war witnessed in Asia over recent years. Epic losses were endured by both Uber and Didi Chuxing in China; SoftBank backed Didi, which eventually acquired Uber's China business in exchange for a 19% stake, but not before both sides had spent billions of dollars on incentives. In Southeast Asia, SoftBank has injected about $3 billion in ride-hailer Grab since 2014, fueling a brutal price war with Gojek in Indonesia. The competition later spread across the entire region when Gojek launched operations in neighboring countries.
"In our industry, the winner takes all," Son told investors at a conference in Tokyo last year. "Compared to the physical, real industry, [with] online there is no physical distance, no physical storefronts that [matter]. [In] less than a second, it can go worldwide. So why should a No. 2 exist?"
But after a nearly unblemished track record of picking No. 1s, Son's record has been tarnished recently with a series of catastrophic decisions.
The company's performance took a hit last year after SoftBank and its $100 billion investment vehicle, the Vision Fund, sank more than $10 billion into WeWork, the U.S. shared office operator. When WeWork canceled its initial public offering last year due to weak demand, its valuation collapsed and prompted the largest loss in SoftBank's history.
Meanwhile, the stock price of Uber, the U.S. ride-sharing company and one of the Vision Fund's largest bets, remains below its IPO price of last year.
Where cash is still king; Japan is one of the richest plums left unclaimed by the mobile payment industry. (Photo by Akira Kodaka)
Son was still reeling from his damaged reputation when COVID-19 hit investor sentiment, triggering a sell-off in SoftBank's shares. He has since pivoted to stockpiling cash, raising more than $41 billion by selling assets or pledging them to take out loans and boost share buybacks.
The strategy has helped drive SoftBank's share price to a 20-year high, and generate a 1.2 trillion yen net profit for the fiscal first quarter.
But SoftBank cannot afford another WeWork-like stumble. The saga not only led to huge losses but raised questions over Son's freewheeling investment style. Those concerns are likely to multiply with the revelations about SoftBank's "Nasdaq whale" strategy.
Meanwhile, the lavish spending on PayPay comes as some SoftBank investors complain about the wisdom of a huge bet on an industry that has proved famously hard to crack.
"SoftBank has been trying for years to create a digital ecosystem in Japan, but it is still playing catch-up," said one domestic analyst, referring not only to payments but also to e-commerce, which is led by Rakuten and Amazon, and other online services.
If Son's bet fails, it would be fuel for SoftBank shareholders who want to rein him in, seeing his unpredictable style as a liability. Son, who owns nearly 30% of SoftBank's shares, has already seen his tight control over the company come under threat. Calls from activist shareholder Elliott Management earlier this year prompted the company to boost buybacks and add independent directors.
"It's a company that is more vulnerable this year than it's been for many years," said one foreign hedge fund manager. "Institutional investors are very keen and strongly feel that a much stronger governance structure needs to be put in place."
But if it succeeds, the rewards would be immense. PayPay's aspirations go far beyond mere retail transactions. Its goal is to create the equivalent of Ant Group's Alipay in Japan -- a gateway for all kinds of payments and financial services. Ant Group, controlled by Son's longtime friend Jack Ma, is planning to raise $30 billion in an IPO that could become the world's largest flotation in history.
"Alipay is going to be bigger than Alibaba," one person close to SoftBank said. "And it is the basis of PayPay's business model."
Meanwhile, the price of not trying at all would likely be oblivion. Failing to build a mobile payments champion in Japan would be a major setback for SoftBank at a time when digital payment is increasingly becoming the entry point for all kinds of online transactions, from shopping to food delivery.
"Becoming a key player in cashless payments is critical for any firm that wants to be a dominant player in digital ecosystems in the long term," Causton said.
Son has largely stayed behind the scenes at PayPay as Ken Miyauchi, the CEO of SoftBank's mobile unit, talks about the service in public events. But industry observers say the business model follows Son's signature winner-take-all strategy.
Follow the money
Son's journey to PayPay began in India -- a country he reckoned was on a path similar to China's but also held the key to Japan's own inevitable transformation toward digital payments.
His interest in following China's model is natural, given that he is possibly the most successful foreign investor there. A $20 million bet Son made on Jack Ma's Alibaba in 2000 is now worth about $180 billion. Son had set his sights on India as the next China. In late 2016, he approached Indian tech entrepreneur Vijay Shekhar Sharma with what would turn out to be a very lucrative proposal.
Sharma's company, the Indian digital payments startup Paytm, was riding a huge economic transformation. Indian Prime Minister Narendra Modi had upended the country's financial system by rolling out a real-time payments network called United Payments Interface, and then banning large bills, a huge windfall for digital payment companies like Paytm.
"My meeting with Son-san was very, very high-energy," Sharma recalled in an interview last year. "He obviously knew what was happening in China." Ant Group, the digital payments affiliate of SoftBank-invested Alibaba, had also become one of Paytm's largest investors.
"He asked, 'How much will you raise?' My answer was, 'At least a billion dollars this time.' And then [Son] said, 'We will invest 1 billion dollars, and we will also buy secondary shares.'" SoftBank's newly launched Vision Fund ended up investing $1.4 billion in the company.
Paytm caught a wave of growth when Prime Minister Narendra Modi banned large bank notes and rolled out a real-time payments network in India. © Reuters
Around the same time, SoftBank unit Yahoo Japan had also begun to consider moving into payments. After starting out in 1996 as a local joint venture with Yahoo in the U.S., Yahoo Japan eventually became more successful than its parent and a leader in online advertising. But despite efforts to expand into areas like e-commerce, it was struggling to break the stronghold of Rakuten and Amazon. It saw an opening in mobile payments.
Yahoo Japan spent about two years preparing a mobile payment service, according to people familiar with the matter. But Son, who wanted to bring global expertise, invited Sharma to Tokyo months before the launch. Sharma was taken by surprise: "We did not have plans to come to Japan earlier. You never see an Indian company expand to a developed market."
Yahoo had prepared a slide presentation for Sharma. Instead, Sharma asked to see the source code underpinning the app. He quickly identified some issues. "The thing we changed about the technology is that, typically, a Japanese shopkeeper was getting money after four weeks. With PayPay, they get it on the next business day," he said. The Japanese company also agreed to cut fees to zero and enable all merchants to join first, instead of having each one vetted through a time-consuming approval process. About a dozen Paytm engineers were brought to Tokyo, and they revamped the entire app in about two months.
When PayPay finally launched, it was a late entrant in a crowded market. Japan, the world's third-largest economy, has all the elements of a lucrative digital finance business. Households stash more than 1 quadrillion yen ($9.4 trillion) in either banks or in cash, more than half of total household assets. Tapping even a fraction of the money would potentially generate huge fees for a financial technology player.
But despite years of efforts by traditional banks, startups and the government, Japanese have stubbornly stuck to cash. Cash accounted for about 80% of consumer spending in 2017, according to a government report, lagging far behind Asian peers like China and South Korea. Fintech startups in Japan have largely watched from the sidelines as even peers in emerging markets like India and Southeast Asia, which are leapfrogging traditional banking services and embracing mobile payments, raise capital at lofty valuations.
Japan's large elderly population has sometimes been blamed for the country's addiction to cash. In reality, "cashless payment is not new in Japan," said Celeste Goh, an analyst at S&P Global Market Intelligence. Credit cards have penetrated deep into Japan, where each consumer owns an average of three credit cards. "Consumers are open to the idea of exploring noncash payment options," Goh said.
The bigger issue is that cashless payments are not widely accepted by shops, who have long resisted going cashless because of cost and inconvenience. Digital payment providers charge an average of about 3% of retail transactions facilitated through their service, according to Goh. That compares to less than 1% for China's Alipay and its main competitor WeChat Pay. In addition, the sales are generally wired to the shop owner's bank account only once or twice a month in Japan.
"The challenge is really for Japan to get merchants on board with this idea, either by reducing the fee charges or finding a way to reduce the settlement cycle," Goh said.
Sharma explained that to convince merchants to accept PayPay, the service needed to be as attractive as cash, which they can get instantly and with no hidden fee. So PayPay decided to charge nothing for three years as long as they were small businesses -- stores with less than 1 billion yen in turnover -- and accepted its QR code payment option.
Masayoshi Son is playing the long game with PayPay, even though he has to assuage investors looking for short-term returns. (Photo by Yuki Kohara)
Today, more than 100 engineers work around the clock to roll out updates at a relentless pace. SoftBank has brought in more Vision Fund companies as part of a burgeoning app ecosystem -- as the number of shops accepting PayPay soared, Mapbox, a U.S. mapping technology company, built a customized map so users can filter stores by category. Chinese ride-hailing giant Didi Chuxing was made available directly through PayPay's app.
SoftBank also bankrolled the venture lavishly, hiring thousands of salespeople across the country that were tasked with bringing shops onboard. The stream of updates from the engineering team caused chaos in the early days, a former employee recalled, "because features that we had described to a client yesterday would be totally different the next day."
That was combined with eye-popping promotions for users, including a 10-billion-yen giveaway campaign shortly after PayPay's launch. Aggressive branding raised the app's profile; SoftBank, which owns a baseball team, even renamed its home stadium after PayPay.
It kicked off its latest series of promotions with a "2000% bonus" campaign in August, in which one in five payments will give back between 2% to 20 times the transaction value.
One reason PayPay has succeeded in attracting users is that it makes them feel like they are playing the lottery -- for free.(Photo by Arisa Moriyama)
"There is a lotterylike feeling to it," said one store manager at a major electronics chain that accepts PayPay. "I think that is why it attracts customers."
In far outspending its competitors, PayPay has wiped out small players from the market. Starting from nothing in 2018, it had a market share of 55% of the code payments market as of January, according to Japan's Fair Trade Commission.
But that has provoked rivals to start offering their own lavish promotions. In recent months, major telecommunications carriers NTT Docomo and KDDI have begun investing heavily to catch up. The relentless pursuit of Japanese wallets is shaping up to be a test of how far SoftBank is willing to keep bankrolling the bet, as a series of soured bets prompts its global portfolio to shift away from a growth-at-all-costs strategy.
"They are beating each other with bundles of bank notes," said Kazunori Ito, an analyst at Morningstar.
On Aug. 4, Miyauchi, CEO of SoftBank's mobile unit, said PayPay's "massive losses will peak out" but did not provide a timeline for achieving profitability. At the same time, his optimism seemed undimmed.
"We want the majority of people in Japan to be using it," he said.
A current senior executive refers to Son's business philosophy: "If the profit margin is 10%, there will be competition at 9%. ... If it is 1%, competition at 0.5%. But if it is zero, there is no competition."
The trouble with burning cash is that "you are renting users, rather than buying them," said a Shanghai-based venture capitalist who has worked with SoftBank. "Unless you can change consumer behavior, the users will run out when the incentives do."
Been there, done that: Japanese mobile payments are not exactly virgin territory. Here are some of the options available in the country. (Photo by Wataru Ito)
Analysts say SoftBank will likely keep bankrolling the venture until next October, when PayPay starts charging transaction fees from its millions of merchants. If it continues to maintain a dominant position after that, companies will be lining up to pay for access to its large user base. The growing number of sellers, in turn, will attract more and more users to the app.
Creating this virtuous cycle, also known as the network effect, will cement SoftBank's reputation as a successful investor. Failing to do so will mean it has merely given away hundreds of millions of dollars.
And the kind of investors Son needs to assuage are motivated by short-term profits rather than long-term vision. SoftBank Group has an established track record of building profitable businesses in Japan. While it boasts a portfolio of tech companies around the world, it still relies on a single company for the bulk of its cash flow: SoftBank Corp., its Japanese mobile unit. The parent SoftBank raked in about $20 billion by floating some of its shares in late 2018, and sold some more as part of its recent monetization program.
But it will likely be years before PayPay turns a profit, and it is not clear if Masayoshi Son can wait that long.
"The trouble is," said Causton, the retail analyst, "no one is going to be making money out of payments for a long time -- unless PayPay stops offering all those juicy incentives."
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|From: Glenn Petersen||10/23/2020 6:31:29 PM|
|QR codes are finally having a moment in the pandemic|
Kai Ryssdal and Alli Fam
Oct 23, 2020
Heard on: Marketplace
Quick Response, or QR codes were first invented back in 1994, as a way to track automotive vehicles during production, and to scan components quickly. Now, over a quarter century later, they are having a moment in the U.S., as consumers look to reduce contact in their everyday interactions to help minimize the spread of COVID-19. Maybe you’ve noticed them yourself. Many restaurants now have virtual menus that are accessed through QR codes. Digital payment systems with QR technology are also becoming more popular.
Digital payment systems with QR code technology are already widely integrated in China. The country also has been using a color-coded QR code health pass in the pandemic, to control people’s movements and to slow the spread of COVID-19.
Nicolás Rivero is a tech reporter at Quartz who’s been following the technology. “Marketplace” host Kai Ryssdal spoke with Rivero about some of his recent reporting. Below is an edited transcript of their conversation.
Kai Ryssdal: Super quick as we get going here, a lot of people are familiar with barcodes, right? from Long, long ago. QR codes are sort of the next evolution, what makes them different? What makes them
Nicolás Rivero: So the whole magic of a QR code is that it stores information in two dimensions, right? So if you think of a barcode, it’s a series of one dimensional lines. And it can only store so much information that way. Because QR codes are these little patterns of squares, they can store a lot more information, something like a webpages URL, which is why you can scan them and go to a link.
Ryssdal: Okay, so hold that thought for when we get to the what they’re being used for now. But I do want a little bit of history out of you first. Ten years ago, plus or minus, QR codes kind of come on the scene in a biggish way. But as you say, in this piece, they were just terrible.
Rivero: Yeah, there were three big problems with QR codes when they first kind of came out to consumers back in 2010. So the first is, if you wanted to actually scan one of these things, you [needed] to download a separate bespoke app to be able to do it. The second was cellular data at the time wasn’t as good as it is now. So it wasn’t a sure thing that you’d be able to actually load the webpage you were looking for when you’re out and about, which is where you’d come across these QR codes. The third thing is just that no one could actually figure out a good use for them. So a lot of brands came out with QR codes in their advertising because they wanted to position themselves as tech savvy. But they would just do it in ways that didn’t make any sense. Like you’d have, for example, a subway ad with a QR code on it that the only way you could get up close enough to actually scan the thing would be to stand directly on the subway tracks.
Ryssdal: Right, right. Okay, so now here we are 2020. More data is out there floating around. Technology is better. Smartphones mostly can read them pretty easily. How are they being used now?
Rivero: So the use that people probably have seen most often is that as restaurants have reopened, they’ve used QR codes to replace handing you physical menus. One of the more interesting uses, I think, is that PayPal and Venmo have rolled out QR codes for mobile payments in the U.S., which is something that’s been very popular in China. And there’s one more thing as well, which is that there are contact tracing apps, which are using QR codes to be able to kind of give people a way to show that they have tested negative for coronavirus before entering a building.
Ryssdal: And you could see that being sort of the passport thing, right? You get that code you show it on an airline or whatever. And in theory, you’re good to go. Right?
Rivero: Right. That’s like another big big use in China. And we’re slowly seeing maybe some rollout of that in the U.S. Abbott, that company that’s selling 150 million rapid COVID tests to the federal government has an app for that. You take the test. It gives you a QR code. A company can scan it and say OK, you’re good to come in.
Ryssdal: Let me just throw in a really quick cautionary tale here. Most — I’m sure it’s like 80% of the American population has a smartphone. But that leaves 20% of people, which is millions of people who don’t. So that’s one issue. And then another one is if you’re like — and she’s listening to this, I’m going to hear about this later. But if you’re my mom and somebody says no, I’m sorry, you need to do a QR code. [My mom], you know, she tries but she’s not the most technologically savvy person in the world. What do you do for them?
Rivero: Well, that’s exactly right. So this is definitely, as you said, a big point of caution. And something that I think is giving people pause about rolling out QR codes too widely, especially for pandemic uses, like determining whether you can port public transportation or enter a building or something like that.
Ryssdal: Right, and and one would hope there would be some workarounds for the non-technologically savvy amongst us.
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|From: Glenn Petersen||11/17/2020 6:48:42 AM|
|CVS becomes first national retailer to offer support for PayPal and Venmo QR codes at checkout|
Sarah Perez @sarahintampa
10:42 AM CST•November 16, 2020
PayPal announced this morning that its customers can now use either PayPal or Venmo QR codes when checking out at more than 8,200 CVS retail stores across the U.S. This is the first national retailer to integrate PayPal’s QR code checkout technology at point-of-sale, the company noted. The additional checkout option will also expand the number of ways customers can pay “touch-free” at CVS — a way to transact that’s become increasingly popular as the coronavirus outbreak continues to spread across the country.
CVS and PayPal announced their plans to cooperate on a point-of-sale solution back in July. At the time, they pegged the time frame for the rollout as sometime in Q4 2020.
The QR code checkout process itself will pull the funds needed for the purchase from the customer’s existing PayPal or Venmo account balance, bank account or from a debit or credit card, just as it would if the transaction was taking place online. Venmo users will additionally have the option to utilize their Venmo Rewards.
Image Credits: PayPal
The transaction does not include any fees, PayPal says. Plus, CVS’ ExtraCare Rewards Program members will still be able to redeem and apply savings using their ExtraCare account when using PayPal’s QR code checkout.
The entire transaction can be touch-free, as it involves QR code scanning as opposed to using a card that has to be swiped or inserted into a terminal or numbers punched into a keypad.
The new option arrives at a time when CVS says it’s seeing increased demand for contactless payments.
Since January, CVS has seen a 43% increase in touch-free transactions, according to data from Forrester. In addition, 11% of the U.S. population says they’re now using a digital payment method for the first time as a result of the pandemic, PayPal noted. The company’s own research also indicated that 57% of consumers said merchants’ digital payment impacted offerings their decisions to shop in their stores.
To use the new QR code checkout option, customers will first launch either their PayPal or Venmo app, click the “Scan” button, ten select the “show to pay” option.
The new checkout experience was made possible through PayPal’s partnership with payments technology provider InComm, which distributed the PayPal QR code technology through its cloud-based software updates to make the feature available at point-of-sale.
While CVS is the first national retailer to rollout PayPal’s QR code checkout, PayPal said it has 10 other major retailers signed up for a similar rollout, including Nike, Tumi, Bed Bath & Beyond and Samsonite, among others. It’s in discussions with well over 100 large retailers about the technology, as well.
“The launch of PayPal and Venmo QR codes in CVS Pharmacy stores will not only provide health-conscious customers with a touch-free way to pay at checkout, but also brings the safety and security of PayPal and Venmo transactions into the store with shoppers,” said Jeremy Jonker, PayPal senior vice president / head of Consumer In-Store and Digital Commerce, in a statement. “We are thrilled that PayPal and Venmo QR codes will help to maintain the safety of CVS customers and employees, especially in the essential pharmacy retail environment as we go into the winter months.”
In addition to the CVS news, PayPal today also noted that its recently announced “Pay in 4” option for splitting purchases across four installments is now fully live across millions of retailers.
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