ePayments Week: Google goes patent shopping

Google's payment purchase, Visa's iPhone app, and FarmVille snubs ads.

I’ll be tracking payment-related news, products and ideas in the weeks to come. Below you’ll find a number of recent developments that caught my attention.

Google’s mobile payment purchase

We’ve been waiting to see how and when Google will move into the mobile payments space. It looks like we may not have to wait much longer. At the Web 2.0 Summit in November, Google CEO Eric Schmidt demoed a location-smart purchase on an anonymous black phone that appeared to be running an upcoming version of Android 2.3 (code named “Gingerbread”). But it wasn’t Schmidt’s purchase on stage, but a purchase by Google last summer that may shed more light on what was going on behind that demo. Tech M&A blog Inorganic Growth revealed this week that Google bought Toronto-based Zetawire, a low-profile mobile startup with patents involving “mobile banking, advertising, identity management, credit card and mobile coupon transaction processing.”

The Nexus S, the first Android 2.3 phone, went on sale this week (check out Engadget’s review). Since Gingerbread supports near-field communications (NFC), the promising wireless technology that improves on Bluetooth (faster) and RFID (more focused and secure), we should soon have a better idea whether the mobile payments revolution is well underway or just a step closer.

Video of Eric Schmidt at Web 2.0 Summit is below:

For me, Visa? You shouldn’t have.

Visa launched its iPhone app this week. It appears to be a timid start for an organization whose chief executive recently boasted that they intend to compete head-on with PayPal.

At launch, the app is offering an ATM finder and location-smart coupons from a number of vendors. This app’s potential lies in its promise to learn a customer’s buying habits and serve targeted offers. I was a little surprised that Visa wasn’t able to do more of that targeting on its first try. By entering my credit-card number and agreeing to terms, I no doubt gave access to years of transactional data. My enthusiasm for the app will likely never be higher than the day I installed it, so an opportunity was missed. I was also disappointed by a bevy of untargeted offers: chocolates, day spas, and jewelry stores. My Visa app seems to think I’m a trophy wife.

Does FarmVille need ads?

Most social games are only able to sell virtual goods to 1 to 3 percent of their players, raising questions about how Zynga (and other social-gaming companies) will continue to thrive if they don’t pounce on revenue streams like advertising. An AdWeek report on the Social Gaming Summit held in New York earlier this month suggests that as the dominant player, Zynga doesn’t have to worry about ads right now — perhaps because it’s making enough from sales of virtual goods in its games. Still, an exec cited in the AdWeek piece noted that “not monetizing 95 percent of your audience isn’t a great model.” Sounds a little like public radio — with mafia and pirates, of course.

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