On payments

Ohad Sammet, writing for TechCrunch:

“We hear a lot of chatter about new payment services, and who’s competing in the space, and obviously who’ll win the space or own a big piece of it. Lately we’ve seen some movement when both Apple and Google announced new payment options for digital publishers and exchanged a few blows. So are the giants going to displace PayPal soon?”

The current chatter about new payment services is usually triggered by extrapolations of the promises of NFC technology that is getting built into newish mobile hardware. There's a lot of valid discussion that can be had about this topic, but Apple's (or Google's) recent announcements of their terms for subscriptions have very little to do with it.

The subscription services launched by Apple and Google have to do with the cost structure of publishing content on their platforms, and what is the cut that is retained before paying the publishers. This is completely unrelated to the underlying payment infrastructure that is used to make these transactions.¹

“The bottom line is that it is much harder to compete in payments using the same path PayPal took 10 years ago. Creating yet another network based on existing methods is a “me too” strategy that doesn’t provide real incentive for merchants to switch [...]. This is not real disruption. What is, then? I’m betting on two trends—payroll (becoming the wallet, getting people to keep their money with you) and short term credit (built from the ground up to be a robust system). This warrants a whole different discussion. Right now, however, it seems that Google and Apple are not going down those paths or presenting an alternative; and until they do so I believe they won’t be serious players in core payments.”

I don't see anything that would indicate that Google and Apple are not going down those paths, because as mentioned above, the subscription announcement have got nothing to do with this. (Neither do I see, by the way, anything that would indicate they are going down those paths, beyond rumors.)

What is clear however is that real disruption is exactly what is needed ; most of the complexities of payment systems today have to do with the existing cost structures and current infrastructure capabilities, and neither of these are immune to changes.

As Ohad mentions, using bank payments today has massive implications in terms of taking on risk for short-term credit. But in a connected world, I struggle to see any technological reason why a transaction between a payer and payee cannot be instantiated, validated and confirmed in a matter of seconds. This would eliminate the need for any payment processor to take on that short term credit risk.

And credit card payments are saddled with overly complex cost structures and terms, which — besides the fact that they are a golden goose for the likes of VISA and Mastercard — are obstacles to massive-scale acceptance as a peer-to-peer payment system — even with the beautiful work of companies like Square. The fees for merchants are variable depending on the terms of their contracts, on the physical presence of the card (swipe) and they are a confusing combination of both fixed costs (percentage of transaction) and variable costs (flat fee) ; although here again, Square must be applauded for taking this on and doing away with the confusing flat fee.

These constraints are based on antiquated systems and therefore heightened risk, and there is much potential for disruption here. There is also no reason whatsoever that a rectangular piece of plastic be required for effecting a payment. That is I think the last ball and chain of companies like Square, and while the ubiquity of the plastic card is what enables them to get the initial penetration and acceptance required for success, I also hope that they are already preparing for a future where these anachronistic artifacts are happily forgotten.

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1. In Apple's case, the user pays 100% of the cost of the transaction using their iTunes account, which is backed by a credit card. Apple then distributes 70% of that to the publisher, usually via once-a-month bank transfers. None of that is changing. ↩

Open letter to Google on net neutrality

Dear Google,
Dear Mr. Brin and Mr. Page,
Dear Mr. Schmidt,

Until this week, Google had been maybe *the* foremost advocate and supporter of Net Neutrality since its inception. I remember first reading about the term and learning what the stakes were on the official Google blog several years ago. One post after another, Google was clearly taking the very strong position of defending the consumers' interests against that of a few corporations, and I was in admiration of that. Vint Cerf was even brought to Google as a spokesperson for Google's net neutrality lobbying efforts, because of the founding figure that he was with regard to the internet. In your eyes, he therefore represented the best person to make the case that the internet deserved to be preserved exactly like it was meant to be.

Your recent "joint legislative framework proposal" with Verizon is deeply hypocritical in this regard, and it has shattered the trust that I had in your organization. Crafting special language for "additional online services" that would not fall under net neutrality provisions is a shamefully sneaky way to insert a massive loophole in the text and completely undermine the principles at the core of net neutrality.
And the idea that wireless access to the internet should be considered separately from wired access to the internet, and therefore should be excluded from any of the critical net neutrality provisions is certainly the most egregious thing I have read in a long time. This amounts to taking people for fools. Wireless access to the internet is to the next decade and beyond what wired access to the internet was to the last two. And even if it were to always remain a marginal mean of accessing the internet, it should still be covered. Access to the internet regardless of the mean and transport of data through all of the internet is what should be protected, and not one bit of all this should be exempted.

It's also lost on no one that you now have with Android a vested corporate interest in shaping how internet regulations can work in your favor in the realm of wireless broadband. And to see such a quick and bold reversal from Google on something that was hailed as a core principle and value for your company is appalling and offensive. This is nothing short of a shameful sell-out to greed and power. I sincerely hope you reconsider your stance.

Sincerely,
Hugues de Saint Salvy

 Magic Trackpad + Keyboard

I'd like to see this. For a living-room setup (which is my case with my Mac Mini), it's a lot easier to handle one single item than two separate devices.

Ctrl-Alt-Delete on a mac keyboard

If you're trying to control a Windows system from a Mac computer, you might be wondering how to send the command Ctrl-Alt-Delete (control-alt-delete). It's often necessary to use this command, for example to unlock a session that was previously locked, as shown in the picture below:

If you're running Windows on your Mac using Boot Camp, it's pretty simple: the Option key replaces the Alt key.

In some cases however, pressing the keys Control, Option (alt), and Delete on the keyboard of a Mac laptop does not have the desired effect. I ran into this issue today, and since it seems that many people are asking how to do this, I thought I'd post some answers:

VNC
If you are using VNC to access another Windows machine, you should use the following keys: Fn + Ctrl + Cmd + Delete
(function-control-command-delete), as shown in the example picture below:



Remote Desktop

If you are using Microsoft's Remote Desktop Connection to access a windows (virtual) machine, you should use the following keys: Fn + Ctrl + Opt + Delete
(function-control-option-delete), also as shown in the picture below:



I hope this helps.

look at the bright side of life

Some uplifting optimism from Paul Krugman in an email interview with Andrew Leonard (Salon.com) about the economic meltdown:

How bad do you think this is going to get?
Awful. Without a major stimulus package -- sorry, I guess the politically correct term is now "economic recovery plan" -- I'd say that we were definitely headed for double-digit unemployment. Right now the economy is clearly falling as fast as, or faster than, it was in 1981-82, which was a terrifying slump. If Obama doesn't come up with a massive plan, and possibly even if he does, this is going to be a slump that pushes 10 million-plus Americans below the poverty line, and more.

Hey, why sugarcoat reality? Thanks Paul.
Here's to an "economic recovery plan" that invests in American infrastructure instead of more hi-def televisions. Better be a big plan too.

the unnecessary bailout

I was watching This Week in Northern California on KQED this morning, and Carolyn Said of the San Francisco Chronicle was echoing a theme that I seem to hear everywhere: an implied link between the increasing number of foreclosures and the fact that many people are owing more on their mortgage than their house is actually worth.

"Meanwhile, California led the nation in the number of foreclosures in October. Recent surveys show that hundreds of thousands of Bay Area homeowners owe more on their mortgages than their homes are worth. In response to the growing crisis, a number of key financial institutions including Citibank have pledged to put a temporary moratorium on foreclosures and rapidly rewrite loans."

The idea that somehow the state or federal government should be helping all the people whose homes are now worth less than what they owe is preposterous. The problem occurs when people can no longer afford to make their monthly mortgage payments ; this is completely unrelated to the current value of the home. The amount of the monthly payment was determined using the value of the home at the time of purchase, the length of the loan and the initial interest rate offered.

We (the government) have limited means of spending in the current economical climate, and this money should be spent wisely and parsimoniously. That means help should first go to those owners facing foreclosures, unable to meet the terms of their mortgage payments, either because they have lost a job and/or are unable to face a hike in their interest rate and are also unable to sell the house. If any plan is to be introduced to allow people to renegotiate their interest rate or payment schedule in order to reduce their monthly payment, it needs to be targeted towards those people first.

The millions of homeowners still able to pay their mortgage payments, even if their house has gone down in value below their purchase price, just have to ride it out like you do during any crisis. They might not like the idea of their investment being completely in the tank, but that is a risk that everybody takes and is not threatening the economy.

I've never heard anybody calling for a plan to help people whose stock portfolio is worth less than what they paid for it, and this should be no different.

Eiffel in blue

France has the rolling presidency of the European Union for six months (ending in January). For the occasion, the Eiffel tower is wearing the European colors. I took this quick picture while in Paris last week, from a "bateau-mouche".





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