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Windows Phone usage grows, but slower than expected.

The patent wars worsen.

Research In Motion will no longer exist as we know it today.

Nokia uses Symbian as a backup plan (but doesn’t call it Symbian).

Windows tablets in 2012 will sell like Android tablets did in 2011.

Dual-core devices will outsell quad-core devices.

Apple’s next iPhone will be the iPhone 4GS.

There will be an iPad Pro available in 2012.

Google will split off Motorola not long after its purchase goes though.

Android’s momentum will continue thanks to Android 4.0.

Hybrid apps with HTML5 will be the norm.

Intel will announce that 2013 is the year it really gets into the mobile market.

We’ll see a smaller Kinect in 2012, with expectations that such technology fits in a mobile device the following year.

While the aforementioned offers have expired, merchants can set up new Foursquare check-in deals via Amex's "Go Social" self-service center for SMBs.

Here's how the Amex-Foursquare marriage works for consumers: Sync Amex card with Foursquare account online. Check in at a location. Tap a "redeem offer" button. Pay with Amex card. Get a Foursquare push notification about the money-back reward (see image) within moments after the card is swiped by the merchant.

Swipely has begun working with 150 merchants in Boston, its launch market. The start-up offers consumers the chance to sync a credit card to its loyalty program. From there, whenever they spend money at a participating merchant, they can receive a reward or discount. Swipely supplies local businesses with point-of-sale signage and materials to promote the program.

Angus Davis, Swipely CEO, said his product should attract consumers and businesses alike because of its usability. There's no need for a smartphone app, much less a printed voucher, he said, in order for shoppers to get rewarded for retail store visits.

"Consumers don't have to change the way they behave in order to check in," Davis said. "Nor do they have to change the way they pay by scanning a QR code [or] using newfangled technology. Our program employs technology that everyone already has and uses."

He added, "For the local merchant, the program doesn't require any changes in the store. They don't have to upgrade hardware, install software, implement any special cards, or re-train their staff."

The 33-year-old CEO said his company would expand to New York, San Francisco, and other major cities in the first half of the upcoming year. "I do think that 2012 is a very ripe time for disruption," Davis said, "especially as the payment space interacts with Main Street merchants."

Other noteworthy developments as digital wallets came into focus during 2011: March/April:Groupon and LivingSocial launch "GrouponNow" and "Instant Deals", respectively, which allow consumers to buy time-sensitive offers with one click on their smart phones. To use the mobile commerce feature, users need to input their credit cards into their daily deals accounts. May 9: Scvngr struck a partnership with American Express to make redeeming LevelUp deals easier for consumers. Amex members who buy the deals need only use their cards while making a purchase to get the discount. As is the case with Swipely, it's not necessary to show the store clerk a paper voucher, barcode, or message on a mobile screen. May 26: Google introduced Google Wallet, which lets consumers pay for Google Offers and other items through their Google account. The Wallet mobile app works with credit card users for Citi, MasterCard, and First Data. Aug. 1: Verizon partnered with Amex to serve as the mobile carrier's digital wallet platform. The telecom was one of the first in its competitive space to create its own digital wallet.

“I thought someone would be able to change the way people shop, but I didn’t think it would be a startup because this will happen quickly and you also need brands that people trust. And PayPal is one of them. It takes the combination of a trusted payment company and the cooperation with great brands that people trust to change how people shop. I thought I would be able to convince all the major retailers all around the world because I have had  relationships with them for 30 years,” Kingsborough said.

Even with the departure of PayPal’s president Scott Thompson, who is now Yahoo’s new CEO, PayPal hasn’t missed a beat and is executing on its vision, Kingsborough said.

Solving consumer and merchants needs Kingsborough came in and honed the in-store payment initiative, which was underway well before Kingborough arrived. He focused on appealing first to consumers and making it simple for them to grasp, before ensuring the merchants could be able to understand the value of the system. Then he went about getting the cooperation of merchants, criss-crossing the country to call upon retailers and payment infrastructure companies to get them on board. Along the way, he helped PayPal pick up necessary components like location-based service WHERE, whose CEO Walt Doyle was personally persuaded to sell by Kingsborough. The plan is now to start rolling out the payment system in the second quarter though the first U.S. trials have already begun with Home Depot.

Kingsborough said he was drawn to PayPal’s approach to payments because it was aimed at solving deep consumer and merchant needs. He said competitors who focus on near field communication and other alternative payment systems are too often preoccupied with the capabilities of their technology, but they’re not addressing the pressing needs of users.

“Competitors think they’ll solve how easy it is to pay at retail, but that’s not a consumer problem. Their problem is how do they become masters of shopping and use their money smartly and organize their efforts to shop online, in-store and on mobile,” said Kingsborough. “We have a holistic approach. We ask the consumers [what they] want to do. They want to save money, save time and feel important in stores.”

NFC: a feature, not a solution That’s partly why he thinks NFC in particular isn’t ready for prime time. He said it’s going to take a while for it to proliferate in stores and on handsets. But more fundamentally, it doesn’t make consumer’s lives better.

“Do I think NFC will work someday? Maybe. But to me, NFC is a feature, not a solution that solves problems. If your strategy is NFC today, you need a new strategy,” Kingsborough.

Google and Isis, the carrier consortium including Verizon, AT&T and T-Mobile, are pushing hard on NFC and are angling to become the go-to mobile wallet for users, who will be able to pay at point-of-sale terminals with a tap of their phone. Many of the pieces for NFC fell into place for the technology in 2011, though there are still many hurdles ahead toward a broad rollout (subscription required) and mass consumer adoption.

PayPal’s approach bypasses many of the hardware constraints of NFC and pushes a two-pronged approach to in-store payments. Users can either use a PayPal Access card connected to their account, or more intriguingly, enter their phone number and PIN at a POS terminal and access their PayPal account. PayPal takes a user’s identification and turns it into a token, which is authenticated in the cloud, so no actual credit card numbers or financial data travels back and forth.

What it takes to win Kingsborough said the companies that win will be comprehensive and ubiquitous, allowing consumers to conduct transactions wherever they want to. By going with a software-based approach, PayPal can address about 8.2 million of the 10 million point of sale terminals with its payment system, without forcing retailers to buy new hardware. Then it’s up to PayPal to convince retailers to jump on board. It’s doing some critical work by signing deals with payment infrastructure companies like AJB Software Designs, which helps connect the point of sale terminals at many tier-one retailers to payment processors and financial institutions. Merchants that use AJB will have an easy path in enabling PayPal payments in store. PayPal is talking to other point of sale companies such as Verifone.

Merchants won’t just be getting a potentially cheaper alternative to credit cards. In PayPal’s vision, they’ll also be getting a way to push out offers to consumers, both in-store and nearby. Kingsborough said PayPal is working through its mobile app to address a variety of needs of merchants, from helping them manage online, mobile and in-store sales to improving loyalty and offering targeted discounts to users. Those additional tools will be rolled out over time in the next year or two. Google has outlined early plans to also provide coupons and offers to consumers using Google Offers in conjunction with Google Wallet.

Providing value But the other important winning determinant will be providing valuable, relevant and easy-to-use services to consumers, becoming the one mobile wallet they turn to, said Kingsborough. He said using tools like WHERE’s targeting and location technology will allow merchants to not just push out deals but deliver very context-aware content. For example, he said a clothes retailers might be able to message a nearby customer, letting them know they’ll earn $5 in their PayPal account that day if they buy jeans that they’ve purchased in the past. And, with the right permissions, the merchant may also be able to know the customer is with two friends and offer a group discount.

“It’s not just the capabilities of location-based services or understanding what a person just did; but it’s about being highly relevant to the person using the services,” Kingsborough said

He said in the battle to become the preferred digital wallet, PayPal will be the simplest for people to use, allowing people to link their credit, debit and loyalty cards, even potentially their drivers license. Just as people stick primarily to one browser, he said consumers will want to rely on primarily one wallet and he believes that PayPal will be that provider.

“Ours to lose” Kingsborough said it’s the whole offering that makes PayPal’s approach a winner. It’s a trusted name with more than 100 million users worldwide and it’s focused on providing value to both consumers and merchants with an easy path to ubiquity. “This is ours to lose,” he said. “I’m very confident about that. Otherwise, I’d be golfing right now in Hawaii.”

Twenty-two EU member states signed the treaty at a ceremony in Tokyo on January 26. Other nations interested in signing the agreement have until May 2013 to do so. According to Wikipedia, the Anti-Counterfeiting Trade Agreement “creates a governing body outside national institutions such as the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO) or the United Nations.” The scope of the agreement includes counterfeit goods, generic medicines, and pirated copyright-protected works.

The provisions of ACTA grant copyright holders direct powers to demand that ISPs remove material from the Internet, without the requirement of a court order, and permit foreign influence over ISPs in the United States. Advocates of the treaty seek to give copyright holders the ability to demand that users who do violate intellectual property rights have their Internet connections terminated as a punishment. To enforce such a system would require the creation of an individual Internet ID.

The Electronic Frontier Foundation (EFF) reports: The same industry rightsholder groups that support the creation of ACTA have also called for mandatory network-level filtering by Internet Service Providers and for Internet Service Providers to terminate citizens’ Internet connection on repeat allegation of copyright infringement (the “Three Strikes”/Graduated Response) so there is reason to believe that ACTA will seek to increase intermediary liability and require these things of Internet Service Providers.

The EFF has been vehement in its opposition to ACTA, particularly regarding the secrecy surrounding the treaty negotiations. Likewise, Michael Geist, in writing for Copyright News, asserted that ACTA was “shrouded in secrecy.” He pointed out that ACTA negotiations did not include civil society groups or developing countries, noting also that “reports suggest that trade negotiators have been required to sign non-disclosure agreements for fear of word of the treaty’s provisions leaking to the public.” The European Commission denied this allegations in 2008, arguing, “It is only natural that intergovernmental negotiations dealing with issues that have an economic impact, do not take place in public and that negotiators are bound by a certain level of discretion.”

As noted on Wikipedia, opponents of ACTA also assert that it will impinge upon freedom of expression and communication privacy. A large number of the World Trade Organization’s 157 members have voiced concerns that the treaty would have a negative impact on trade. Others have pointed out that ACTA does not include provisions for legal safeguards protecting ISPs from liability for the actions of their subscribers. Without such provisions, ISPs will be forced to invade the privacy of their subscribers in order to protect themselves. Aaron Shaw, research fellow at the Berkman Center for Internet & Society at Harvard University, stressed that “ACTA would create unduly harsh legal standards that do not reflect contemporary principles of democratic government, free market exchange, or civil liberties.”

The technology news and information website ArsTechnica.com argues that ACTA encourages ISPs to collect and provide information about suspects by providing for those ISPs “safe harbor from certain legal threats.” In protest against the treaty, the hacktivist group Anonymous hacked into the Federal Trade Commission’s cybersecurity advice website on January 24, replacing the homepage with the Anonymous logo, a rap song, and a message threatening more attacks if anti-piracy legislation in Congress were to pass. According to The Next Web: The message left temporarily on OnGuardOnline referred to the Stop Online Piracy Act, The Protect Intellectual Property Act and the Anti-Counterfeiting Trade Agreement. If they pass, the message said, "we will wage a relentless war against the corporate Internet, destroying dozens upon dozens of government and company websites."

The first mobile phone to work with the new Nokia NFC is the Nokia 3220 (pictured), a tri-band camera phone that is available in two versions: a GSM 900/1800/1900 primarily for the European and Asian markets, and a GSM 850/1800/1900 primarily for the Americas. The Nokia NFC shell is a functional cover developed for the Nokia 3220 phone. The Nokia NFC shell with four tags will be available during the first quarter of 2005 in Europe, and during the second quarter 2005 in the Americas and Asia.

The company also operates GameCoins.com, a centralized place to discover new gaming titles and earn virtual currency to be spent on games. Game Coins can be converted into a publisher’s virtual currency, as well as into Facebook Credits.

To date, Sometrics has helped process 3.3 trillion units virtual currency since the company’s launch in 2007. Sometrics also says that gaming partners see an average 15 percent revenue lift through the use of its virtual currency payment solutions.

To date, Sometrics has raised $6 million in funding from the Mail Room Fund, an investment consortium that includes the William Morris Talent Agency, Accel and Venrock, as well as AT&T, Greycroft Partners, and Steamboat Ventures.

Sometrics will be added to American Express’ Serve digital payment and commerce platform. The credit card giant debuted Serve in March as a way to integrate a variety of payment options into a single account that can be funded from a bank account, debit, credit or charge card. American Express will continue the operation of Sometrics’ current business and will work with Sometrics will allow Serve customers to purchase virtual currencies via the platform. Over time, AmEx plans to integrate Serve into the payment path of the games that Sometrics supports.

Of course, American Express isn’t the only credit card company looking to capitalize on the changes taking place in the payments industry. Visa has big plans to dominate mobile payments and the digital wallet, buying virtual goods payments platform PlaySpan for $190 million, as well as acquiring mobile payments company Fundamo for $110 million.

But in the past year, American Express has actually been making some interesting partnerships in the payments space, recently teaming up with Foursquare, Facebook and even Zynga for deals. This could help the company dominate social payments and close the redemption loop.

And AmEx has been boosting its Serve platform with carrier partnerships, including Sprint and Verizon. Serve has also formed relationships with other partners including TicketMaster, AOL, and a number of gaming companies (however, those names have not been disclosed yet).

Go Social will also allow merchants to put their locations on social networks like Facebook and Foursquare, and track their deal campaigns across those networks. Since AmEx has all the payment information, it can track deal redemption fairly easily. Closing the offer to redemption loop is the singel biggest challenge in the daily deals space. Even Groupon Now, Groupon’s mobile app with instant deals, requires participating merchants to have iPhones and train staff on how to redeem the offers. AmEx doesn’t try to change the behavior of the consumer or the merchant, other than give them an incentive to pay with AmEx versus cash or a credit card.

While it all sounds good on paper, the proof will be in the quality and density of deals that AmEx can procure. This will be a battle between local sales forces. But it looks like Groupon and LivingSocial finally have some serious competition.

The company also recently launched a mobile version of UltimatePay, which gives smartphone developers a way to deliver a one-click payment experience to mobile gamers, and provide a comprehensive payments offering. The mobile focused platform allows players to view their balance and transaction history, while allowing them to purchase items in-app without ever having to leave the game

As virtual goods becomes a booming business, PlaySpan has reaped the benefits of technology and media companies looking to incorporate virtual goods into their platforms.

Visa says that ecommerce sales, which reached an estimated $948 billion, are a big growth area for the company. Approximately 45 percent of U.S. online spending takes place on Visa’s network today and for Visa’s fiscal first quarter 2011, the company reported 25 percent year-over-year growth in ecommerce payment volumes globally. Visa is going to use PlaySpan to capitalize on the growing digital goods market, which generated an estimated $25 billion in consumer spending globally in 2010 and is expected to reach $280 billion by 20143.

The acquisition is even more impressive when you conside that the company was founded by 12-year-old, Arjun Mehta, in 2006. PlaySpan is actually run by the teenager’s father, CEO and co-founder Karl Mehta.

For higher credit card processing volume (recommended for more than a $1,000 per month), Intuit is continuing to charge a $12.95 monthly fee but has dropped the set transaction charge of $0.30. The per transaction percentage remains at 1.7 percent for cards swiped; and 2.7 percent for key entered.

Mobile payments is a competitive space and it’s hard not to notice some of the attention Square has been getting from both Visa and Apple. Because of this, companies like Intuit have to up the ante to remain competitive and attract businesses. For example, Intuit recently extended the offer of a free version of its GoPayment reader indefinitely. Square’s readers have been free for some time now.

Chris Hylen, VP and general manager of Intuit Payment Solutions said this explaining this change in pricing: We started simplifying GoPayment pricing back in January when we eliminated the monthly fee. Now we’re removing transaction fees. As we continue to evaluate the market and talk with customers, we believe that making our pricing even more affordable is the best way to give more people an easy way to process credit cards on their mobile devices.

While Square is growing fast, as more and more businesses are looking for innovative, inexpensive and painless ways to accept credit cards, Intuit’s reader does offer a compelling product. The company reports that it has seen a nearly 700% increase in the number of people signing up for GoPayment each week compared to the beginning of the year (driven in large part its free swiper offering). Intuit declined to reveal exactly how many users are signing up per day vs. a year ago.

And GoPayment users are  processing in excess of $15 million a week using GoPayment and related services. These services also include payments from the Web and through QuickBooks using a GoPayment merchant account, so it’s unclear how much of that $15 million is coming through the readers themselves. Intuit says GoPayment users have processed more than $3 million in a single day over the past month as well.

For basis of comparison, Square just revealed that it is processing $2 million in transactions per day and $66 million for the first quarter, but COO Keith Rabois says forecasts that this number will triple in Q2.

The other competitor in the space, VeriFone, has yet to eliminate the set transaction fees ($0.17) associated with its payment product. But with pressure from both Square and Intuit, that may change soon.

An O2 spokesman says: “We’ve decided to take extra time trialling the service internally before opening it up to customers. This will ensure that when we launch, the service will be as appealing as Priority Moments has been.”

Priority Moments customers have redeemed more than £5m in savings since its launch in July, according to O2. Its success has led to the company creating its first dedicated team for Priority Moments as O2 looks to further expand the proposition this year

The O2 Wallet aims to bring the contents of the physical wallet, including payment, travel and loyalty cards to the mobile phone, as well as extra services such as the ability to compare the price of items, special offers from “120 retailers” and ticketing

O2 now has more than 250 staff in its Money division, which operates O2 Wallet as well as insurance services. This is an increase from 30 people a year ago when the department primarily looked after its Cash Manager and Load & Go cards, which closed in November in preparation for the launch of O2 Wallet

Rival operator Everything Everywhere launched its “Quick Tap” contactless payment service in partnership with Mastercard in May, while brands such as Google and Vodafone are also expected to launch similar wallet services in the UK in the coming months.

The partners are also looking to add support for loyalty programs and vending machine purchases.

The system is designed to work with an NFC-enabled SIM cards as a secure element, or with Gemalto’s Gemalto’s Upteq N-Flex NFC solution, which can turn standard mobile phones into NFC-enabled devices.

WHERE is able to target consumers based on a variety of factors including location but also search and purchase data. The goal is to be able to find nearby users and walk them into a store so they will buy a product based on an offer or deal. That will allow PayPal to close the redemption loop and show merchants how much business they are getting from PayPal, Doyle said.

We talked about the potential of offering local deals when PayPal bought WHERE. But it is interesting to see that PayPal considers WHERE a key tool in its larger mobile payments efforts. It’s not surprising, considering Google Wallet is being combined with Google Offers, but it shows that this is becoming table stakes in mobile payments. You can’t just have a great payment solution; you also need to have marketing and outreach tools to distinguish yourself from other offerings. And you need to provide merchants with more benefits than just an alternative to a card swipe. Having a way for merchants and retailers to grab people off the street is going to be key for successful payment systems. And putting coupons and deals in the hands of consumers can help convince them that it makes sense to use an alternative to credit cards or cash.

One of the problems I see, however, is that with WHERE there is no guarantee that consumers must pay via PayPal at the point of sale. A user could receive a mobile ad for a deal or coupon and then choose to pay with cash or a card, which would leave the redemption loop open. That, Doyle said, is something PayPal will be working on as it rolls out its payment system.

But he said this is part of the bigger challenge for all mobile payment providers. They have to provide more benefit than a card swipe to both consumers and merchants. It is going to take an ecosystem to accelerate adoption, said Doyle, and there is a lot more learning needed in the years to come.

“2012 in mobile payments is where location-based services were, like, three to four years ago. It’s, like, the year when things begin but it’s not where the critical adoption curve kicks in. You need consumer adoption on handsets and merchant adoption on the point of sale side. You will see it begin this year, and we will all learn a ton,” Doyle said.

he company said it is now on pace to do $3 billion in mobile payments this year though much of that is person-to-person transfers using the PayPal app, which don’t yield much revenue for PayPal. Users do not have to pay a transaction fee when payments pull from bank accounts or an existing PayPal balance.

In many ways, this is similar to personal transfers PayPal has previously enabled through its mobile app using Bump Technologies. Users are able to send money back and forth by bumping their phones together, a solution that doesn’t rely on NFC. It’s unclear how much of that may have happened through bump payments, so I don’t know how significant person-to-person NFC payments will be. It’s nice to be able to make a payment to someone by just touching phones but, again, it’s not like many PayPal users don’t have that ability now.

Shimone Samuel, Product Experience Manager for PayPal Mobile, however, said the NFC solution has fewer steps than bump payments and can be activated even when only one person has launched their widget. Bump payments require both people to have their PayPal mobile app open. He said PayPal turned to NFC because it simplifies P2P payments.

“What I’m looking for is what is simplest and easiest for customers and NFC is the simplest way to request money,” he said.

The bigger opportunity is in enabling real-world payments as retail and local merchants, something PayPal is still set to unveil later this year. That will be a much bigger deal because it will signal how PayPal will counter moves by Google and its NFC payments initiative, as well as other challengers like Square and the carrier consortium, Isis project. Samuel declined to comment on how PayPal will use NFC specifically at point of sale but he said the company takes every opportunity to learn from its products.

PayPal needs to figure out how to tap that market for offline purchases, which is much bigger than than pure online transactions where it’s excelled. So it’s nice that PayPal has enabled some P2P NFC payments, and it’s showing that it’s getting up to speed on NFC. But we’re still waiting to see the real fireworks.