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"What we wanted to focus on was removing the mechanics of the transaction and building the relationship between the merchant and customer," said Megan Quinn, director of products at Square, which occupies space at the Chronicle building at Fifth and Mission streets.

But, of course, Square isn't the only company working hard to crack the nut of mobile payments - and they all face considerable challenges.

Google, Visa, MasterCard, VeriFone, eBay's PayPal division and a joint venture among AT&T, Verizon and T-Mobile are attacking the problem in various ways. In most cases, those businesses are going a different direction than Square, employing near field communications (NFC) technology that allows people to tap their phone near a terminal to make a payment.

Done right, mobile payments can accelerate the monetary exchange, while streamlining the issuance, acceptance and storage of receipts, coupons and loyalty cards. Down the road - once consumer and retail use reaches critical mass - the hope is that people will be able to leave their wallets at home altogether.

But there's a chicken and egg paradox: Customers won't start using mobile payments in great numbers until they're accepted in great numbers, and retailers don't have a huge incentive to roll these systems out until customers are clamoring to pay this way.

There are only about 150,000 retailers nationwide that accept payments over MasterCard's NFC-based Paypass readers. Google's Wallet payment app works with this system, and industry rumors suggest the next iPhone might as well.

Square, which has so far focused on small merchants has about 20,000 that accept Card Case.

Another big challenge is human inertia. To get people to download apps, key in credit card numbers and transform a habit they're very comfortable with, mobile payments will have to represent more than a little improvement over what they do today.

"You have to offer them a compelling reason to do it," said David Mangini, an IBM executive focused on mobile payments. "At a very, very minimum ... it has to be just as convenient, just as broadly accepted and just as safe."

One of the big knocks on basic NFC payments is that tapping a phone near a reader doesn't represent a whopping improvement over swiping a card. In addition, merchants have little to gain by replacing one expensive payment infrastructure with another, some observers say.

"It doesn't upset the status quo," said Nick Holland, senior analyst at Yankee Group. "It doesn't really change the original business model and it all goes through the same rails."

Receipts, deals Google argues that its NFC-based Wallet app is a big step forward for a few reasons. A single tap replaces not just the payment, but also the exchange of receipts, coupons and loyalty points.

On top of that, Google believes it's tying together the on- and off-line retail worlds, by allowing consumers to move the deals they spot on the Web into the Wallet app, where they can redeem them in the real world. Google Wallet also advertises nearby deals when users open up the app.

"For the consumer, it's really about tap, pay and save," said Osama Bedier, vice president of payments at Google. "On the merchant side, it's about closing the loop on that advertising."

This is a critical goal for Google, too, as it experiences slowing growth in online advertising - 93 percent of commerce still occurs offline, according to Forrester Research

For its part, Square steers around the limitations of NFC - as well as the various roadblocks of wireless carriers and credit processing networks - by leveraging the powers of the Internet to process payments. The credit card information is stored online, in Square's secure cloud, not on the device itself.

Square, which started by providing small attachments that allow merchants to swipe credit cards using mobile devices, acts as the merchant of record for its customers. This allows the businesses to quickly start accepting credit cards without going through the usual drawn out and expensive process of applying for a merchant account. But it also clearly puts more risk onto Square's shoulders.

Square turned on the hands-free feature on its Card Case app, which takes advantage of the so-called geofencing capabilities in the latest version of Apple's mobile software, in an upgrade to the app in November. The feature is only available on Apple devices to date

Quinn said "automatic tabs" represents an obvious improvement over traditional payments and it's quickly driving user growth (though the company doesn't disclose user numbers).

In addition, retailers have seen revenue leap as much as 20 percent since integrating the app. It drives traffic by highlighting nearby establishments, and the ease of payment encourages customer loyalty, the company says. Tips also tend to go up.

Is it safe? But the question that has dogged Square - and indeed hangs over much of the mobile payment space - is security.

Early last year, VeriFone CEO Douglas Bergeron blasted Square - its attention-grabbing young competitor - for what he called serious security flaws. In an online video, he argued that any bad actor could use the Square dongle and an easy-to-create app to skim credit card numbers.

Square CEO Jack Dorsey, also the co-founder of Twitter, defended the company's security practices in a letter. He also highlighted the inherent insecurity of credit cards, noting that any sketchy waiter is equally free to steal your information.

Meanwhile, Quinn argued that Card Case is actually more secure than credit cards because it only works if you're in the location and your face matches the picture that pops up on the merchant's screen.

The radio technology behind NFC has taken some security lumps, too.

Late last month, a security researcher at a Washington, D.C., conference used a wireless reader she bought on eBay to highlight some weaknesses of radio frequency identification, Forbes reported. She pulled the critical data from an RFID-enabled credit card through a volunteer's clothing, encoded that data onto a blank card and put it to use onstage.

Holland said that any new form of payment inevitably creates new forms of fraud. The challenge will be to educate consumers and merchants about how to minimize the risks.

"Clearly, having a device always with you and connected is a very inviting target for criminals," he said. "Any safe is only as strong as the key."

Hicks' inability to readily identify the EFT debit illustrates a mounting bookkeeping problem some checking customers are encountering as banks and retailers seek to minimize the handling of paper checks to cut costs and boost profit.

"While the EFTs are helpful to everybody and clearly more efficient, I'm not sure the banking system has adequate safeguards," said Kent Phelps, a vice president of software engineering for WitsEnd Software, which develops programs enabling check scanning.

Customers lack the ability to set parameters on the practice, he said. "I ought to be able to tell the bank 'I'm going to authorize EFT, but I want to be called if its over $5,000 or will empty the bank account."

A fast-growing number of U.S. retailers are scanning images of checks into banks' computer systems and destroying the originals. An estimated 461 million check payments have been converted into e-payments since January 2002, according to NACHA, the Electronic Payments Association.

Meanwhile, a law called Check 21 will go into effect next October allowing banks to send checks to each other electronically, eliminating the need to transport them manually from bank to bank, and authorizing check "substitutes" to be used in a court of law.

Banks and merchants say electronic check scanning helps detect fraud more quickly, while also saving 5 to 25 cents a transaction, according to NACHA.

Some problems arise In bank-to-bank electronic transactions, the check payment moves faster through the system -- meaning consumers should no longer count on a three- to five-day lag time. Otherwise, check-writers are unlikely to notice a change, aside from receiving copies of their returned checks in lieu of the originals.

Some consumer advocates warn that many merchants aren't fully educated in the legal ins-and-outs of check scanning. Gail Hillebrand, senior attorney with Consumers Union, nonprofit publisher of Consumer Reports, said she's received complaints that companies have run checks through twice, once as an electronic transfer and again as a regular check.

"There are a lot of merchants who don't really know what the rules are," Hillebrand said. "The merchant thinks 'you owe me money, I have this check here because I didn't send it in last month, I'll send it through now.'

"The fact that that is inconsistent with NACHA rules and probably illegal, the merchant doesn't know and hasn't been educated."

Hicks couldn't find any notice on phone bills that her checks would be converted to electronic transfers, though the NACHA rules governing the process require companies to notify consumers every time they plan to convert a check into an electronic payment.

Gemalto is becoming a major player in the emerging market for TSMs. It has signed a deal to become the TSM for Deutsche Telekom and also Singapore’s nation-wide NFC system. It has also secured TSM deals with Barclaycard and Orange. Sebastian Cano, SVP Telecommucation for Gemalto, said the company has 45 NFC projects underway but the Isis deal would be the largest.

“The secure element will not be an open asset to allow people to write content to it or it will lose the first portion of it birth name,” said Hughes. “Any suggestion that a secure element is an SDK that sits on top of an open OS is a fanciful argument.”

I asked Ryan Hughes, the CMO of Isis, about the situation and he declined to comment on the Verizon situation. But he said that the secure element must be managed by a TSM and the owner of the device, which will be the carriers in the case of Isis. Creating a completely open situation where any company or developer can access the secure element would not be safe or practical, he said.

The deal is interesting because it follows word last week that Google Wallet has not been enabled to run on the Galaxy Nexus, Google’s flagship Android device which is expected to go on sale soon with Verizon. Verizon said it has not blocked the NFC application but is working on commercial talks with Google, which many have interpreted as Verizon holding back the wallet until its own Isis payment tool is available.

That suggests to me that we shouldn’t expect to see Google Wallet instantly enabled on Isis phones. It can still happen eventually and Verizon makes it sound like it’s just a matter of working things out with Google. But each Isis carrier will be able to decide what service provider gets access to their secure element, and it looks like it will not be a free-for-all. That makes sense on some level for security reasons but my hope is that ultimately, Isis members won’t find reasons to keep Google Wallet or other competing applications off their phones for too long. The NFC wallet market is just emerging and it will be good to have competition and options for consumers.

Consumer protections are in place Still, electronic funds transfers are governed by stronger consumer protections than those for regular check transactions. If, say, the wrong amount is billed, the bank must temporarily reimburse the consumer within 10 days while the bank investigates the situation, Hillebrand said.

But even absent errors, some find the switch to electronic scanning an unwelcome change. "I write the check so I can track it with the check number," Hicks said, but the check number didn't appear on her bank statement.

"If I wanted to pay everything (electronically), I could call on the phone to pay it, or give them a credit card," she said.

When making a purchase at a store, it's possible to stop the electronic check scan before it starts to pay by cash or credit card, but in the case of a mailed payment, the opportunity to opt-out varies by merchant.

"With paying bills, it's really up to the company to decide whether they offer an opt-out. In practice, our understanding is almost all companies are providing an opt-out as a customer service, but it's really their decision," said Michael Herd, spokesman for NACHA.

NACHA has proposed a rule requiring companies to offer opt-out. If and until that passes, the only option for unhappy consumers is to switch merchants. For her part, Hicks is seeking another phone company.

And recently, she tried to pay by check at a Wal-Mart store. The cashier wanted to scan the check, but Hicks said she wanted it processed as a regular check.

"They said we don't do that anymore. I said I don't shop here anymore."

Listrak sampled Internet Retailer's Top 1000 online retailers, loading up carts and then abandoning them ("Hey you kids! Knock it off!") to see who would follow up. Only 14.6% sent a follow-up email, and fewer still sent a second or third email which, Listrak's CEO Ross Kramer told Internet Retailer, is where about half of the revenue comes from. Among Listrak's suggestions to retailers: get the shopper's email address first.

Intuit cuts payment rate for AT&T subscribers Intuit announced a partnership with AT&T for its GoPayment mobile payment solution, which competes with Square. Like Square, Intuit offers a free card-swiping attachment that plugs into the audio jack of an iPhone, iPad, Android or Blackberry device, allowing anyone to collect credit card payments. Intuit's basic rate of 2.7% slightly undercuts Square's 2.75%, but AT&T customers will pay even less (1.7%). Intuit originally charged customers $175 for the swiper dongle, but last January, in a bid to compete with Square, it began offering the dongle for free. Still, Intuit has struggled to gain the visibility that Square founder Jack Dorsey and COO Keith Rabois and high-profile investors like Richard Branson have brought to Square. This week's deal with AT&T is a reminder that Intuit is serious about GoPayment, which may actually offer more to merchants since it integrates with QuickBooks, its bookkeeping package that also targets small businesses.

PayPal embraces NFC (just a little) PayPal has made something of a point of not jumping on the NFC bandwagon, emphasizing the technology-agnostic nature of its mobile payments platform. Demonstrations at PayPal's recent Innovate conference emphasized payment options like PayPal's Empty Hand system, which lets you buy things with only your mobile number and a PIN. Still, NFC seems an inevitable part of the payments picture in the years ahead, and this week, PayPal delivered the peer-to-peer NFC payment technology that it promised last July. Shimone Samuel, Product Experience Manager for PayPal Mobile Applications, wrote on the PayPal blog that the technology for NFC P2P is included in version 3.0 of PayPal's Android app. No need for it in the iOS app yet, obviously, since the most recent iPhone upgrade disappointingly didn't include support for NFC. As we noted back in July, in practice, the transfer of funds through PayPal's NFC system isn't substantially different from what was already possible using Bump, which sends the transfer through servers in the cloud rather than wirelessly between the mobiles. But the NFC system will let PayPal developers acquire experience with NFC wireless transfers, which should serve them well as NFC-enabled point-of-sale terminals begin to show up next year and beyond.

d not only need consent to collect the information, but should have to delete it after a certain amount of time and keep it anonymous, according the panel.

The recommendations are not binding in themselves, but are likely to inform national policy decisions in EU countries.

these emails show Google explicitly seeking to use bundling as a tactic.  Discussing Google Maps, top Google manager Steve Lee writes:

"We are in the process of trying to bundle NLP [Google's location service] with GMM [Google Maps] on Android, just like we do on other platforms...If successful, all GMM android partners will automatically get NLP, at least when GMM is used."(p. 47)

But Google had an even bigger bundling club, tying its location-based services to the Android operating system itself, much as Microsoft tried to tie installation of its Explorer browser to its Windows operating system.   By June and July, you see the evidence of Google using that club on manufacturers to knock Skyhook out of the competition.   You have the June email from Motorola to Skyhook telling the company:

"As you will see from the language in a note received from Google (relevant text is coped below), Skyhook's implementation of the XPS service on Motola's device renders the device no longer Android compatible."(p. 27)

My next thought was ‘how pathetic we’ve become.’ How utterly pathetic and dependent we’ve all become on technology, which is truly what this is all about.

I am merely making the point of how dependent – and that truly is the operative word, we’ve become as a society.

Far from being ordinary and universal, friendship, for the ancients, was rare, precious, and hard-won. In a world ordered by relations of kin and kingdom, its elective affinities were exceptional, even subversive, cutting across established lines of allegiance.

Friendship was a high calling, demanding extraordinary qualities of character—rooted in virtue,

Christian thought discouraged intense personal bonds, for the heart should be turned to God.

The classical notion of friendship was revived, along with other ancient modes of feeling, by the Renaissance. Truth and virtue, again,

We’re busy people; we want our friendships fun and friction-free.

Character, revealed through action: the two eternal elements of narrative. In order to know people, you have to listen to their stories. (…)

The culture of group friendship reached its apogee in the 1960s. Two of the counterculture’s most salient and ideologically charged social forms were the commune—a community of friends in self-imagined retreat from a heartlessly corporatized society—and the rock’n’roll “band” (not “group” or “combo”), its name evoking Shakespeare’s “band of brothers” and Robin Hood’s band of Merry Men, its great exemplar the Beatles.

Friendship is devolving, in other words, from a relationship to a feeling—from something people share to something each of us hugs privately to ourselves in the loneliness of our electronic caves, rearranging the tokens of connection like a lonely child playing with dolls.

And now friendship, which arose to its present importance as a replacement for community, is going the same way. We have “friends,” just as we belong to “communities.” Scanning my Facebook page gives me, precisely, a “sense” of connection. Not an actual connection, just a sense.

The more people we know, the lonelier we get.

But when I think about my friends, what makes them who they are, and why I love them, it is not the names of their siblings that come to mind, or their fear of spiders. It is their qualities of character. This one’s emotional generosity, that one’s moral seriousness, the dark humor of a third.

So information replaces experience, as it has throughout our culture.

in ancient times

No solitude, no friendship, no space for refusal—the exact contemporary paradigm.

- The best practical example we have of enterprise gamification are the incentive systems applied to telesales, which -- bottom line -- turn people into monkey-cogs in a machine, competing for tokens of dubious value in exchange for optimal performance in generating hard revenue for the organization employing them.

- McGonigal is very fair about acknowledging her precursors, from Ted Castronova to Abraham Maslow. But she doesn't (I don't recall, anyway) mention Lawrence Lessig, whose line 'Code is Law' strikes me as relevant. The idea of moving governance into code is very powerful, but also profound and terrifying.

Because badges hinge on motivation. Most of the energy in the badges conversation seems to have roots in the different ways people think about motivation, and more specifically about motivation and learning. What motivates learners to learn? What de-motivates them? 

Where's the line between motivating a learner and manipulating them?

For me, the most interesting intersection of the Badges for Lifelong Learning conversation is where learning theories overlap with research into virtual communities, new collectives, commons-based peer production -- whatever you want to call what we do online. A good deal of Internet research is about participation and motivation. If anything connects the badges community, it's seems to be the belief that more participation is better.

The communities of practice research links new collectives like Wikipedia with learning and identity, and authenticity is thought to affect people's motivation to learn and participate and reach goals.

There's this obscure ID Compensation theory that isn't even on Wikipedia! yet!

What if badges are just one more way to represent feedback? What if they're the best, most versatile way to provide feedback, whether that feedback is many-to-one, one-to-one, or many-to-many?

Context Aware Computing—Activity Recognition: This project is developing techniques so that your computer can adapt to your patterns of activity and, based on your needs and expectations, instruct and guide you on a daily basis.

Context-Aware Computer—Social Proximity Detection: Your friends, family, and co-workers all play a role in determining how your daily activities unfold. This project identifies ways to use the proximity of people important in your life to adjust communications and to help coordinate activities.