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Making sense of 'Clinkle' noise

It was hard for anyone who followed mobile payments to miss the headlines about Clinkle, a Silicon Valley startup headed by the CEO who raised more millions that his age. Getting $25m in SEED money from such top names as Accel, Andreessen Horowitz, Intel, Intuit and Peter Thiel warrants attention, so let's peak under the hood of that (not so) mysterious startup.

On the technology side, a number of sources (e.g. this one and that one) indicate that Clinkle will use high-frequency sound as "mobile - POS" interface. That's exactly what Zoosh were attempting to do back in 2011.

Unlike Zoosh, Clinkle uses "zero hardware" approach (VCs like that a lot these days, for all the right and wrong reasons), relying on Point of Sale infrastructure with mike and speaker already in place, e.g. iPad. 

A side note: they refer to two-way "clinking", presumably for getting transaction amount etc from POS and sending one-time payment token data back to POS. There is a problem with that: mike and speaker on iPad are in different locations, hence two-way communication is hard to implement, from user experience and transaction flow points of view.

Although Clinkle says "no infrastructure change is needed", they do seem to require merchants to sign up. That immediately puts them up against all other proprietary wallets such as Square, Google, PayPal, Dwolla etc. Also, POS integration is - by far - not just about downloading an app. Even with card terminals it not always "plug and play". 

The main problem with merchants, however, is different: they don't care about tech, they only care about their bottom line. Does Clinkle offer them a simpler, faster, easier, cheaper or more ubiquitous way to accept payments compared to cash and cards?.. (The answer is obvious).

Adoption hurdle applies not just to merchants. To "clink", I need to register and jump through the hoops verify my funding source (most likely - my bank account as credit cards will cost Clinkle money). PayPal and Google know how hard it is to make consumers do that...

As for the consumer, if you had a choice between pulling out a card from your wallet and asking the store assistant "Can I clink it?" and then launching the app, tapping in the security code, directing you phone at a specific part of POS (perhaps the store assistant will be using their index finger for that - making both of you look like dorks), what would you prefer? Especially, if the end result in both cases is the same - you walk away with a purchase. Clinkle says you would be able to leave your wallet at home. Not until the whole world "clinked" - I don't want to walk home... And if I do have to carry my wallet/cards/cash with me, why bother with anything else?.. What's in it for ME?!

As the issuer, why would I need Clinkle, if all my customers already have a card or two?..

Payments are not about some tech (h/w or app): they are about delivering tangible benefits to all the parties - consumers, merchants, and... banks (who are considering tokenization to stop companies like Clinkle in their tracks). Payments are hard - "a world of shit", in fact. Google (and ISIS and VivoTech spent hundreds of millions on driving mobile payments adoption. With zero result. Can Clinkle gain meaningful traction with just $25m (beyond campus retailers)?.. I wish them luck (without any sarcasm).

Comments: (2)

A Finextra member
A Finextra member 01 July, 2013, 17:02Be the first to give this comment the thumbs up 0 likes

Hmmmm - high frequency sound ...

Step 1: 'accidentally' leave cheap Android phone at the checkout

Step 2: return later to claim 'lost' phone

Step 3: harvest & decrypt Clinkles recorded on phone

Step 4: profit

 

A Finextra member
A Finextra member 01 July, 2013, 17:12Be the first to give this comment the thumbs up 0 likes I think Clinkle's advisors are smart enough to tell them to use one-time tokens.

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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