Of course, you knew at least a little bit would slip through.

In response to an analyst who asked about the company’s ability to tailor deals to a person’s interests, Mason hinted at new products coming in the first or second quarter.

In addition to being able to get deals based on multiple locations, gender and past buying behaviors, he said, users will be able to vote down deals if they don’t want to receive similar ones again.

So, if you are male, you won’t have to see offers for bikini waxes, or if you are bald, you won’t have to see offers for barber shops.

Mason said, “It allows us to say, ‘Please stop sending me pole-dancing lessons.’ … That’s been a much requested feature.”

Otherwise, Mason quickly and confidently answered inquiries throughout the call.

But he didn’t talk much about future financial expectations, instead emphasizing the company’s merchant services, new investments (such as its mobile products) and new categories (like products and travel).

So far, few details have been shared on the impact of those offerings, including Groupon Now, which is available in 31 U.S. markets and allows customers to purchase deals that can be redeemed in a short time window. Groupon’s travel site has also gotten quite big through the help of its partner Expedia.

Groupon CFO Jason Child explained that all of the investments are really at an early stage, and it’s uncertain how they will be impacted by seasonality or other economic factors.

The strategy remains to invest in the future, Mason said. “The Groupon of five years from now will require investments in technology and innovations. Despite rapid growth, we estimate that we participate in less than 1 percent of all local transactions.”

Still, the forward-looking statements weren’t enough to satisfy investors who were looking for the company to show a small profit.

For the fourth quarter, Groupon reported a net loss of $42.7 million, or 8 cents a share, compared to a net loss of $378.6 million, or $1.08 a share for the same period in 2010.

Mason concluded his first earnings call by saying: “Thanks, guys, this was a lot of fun, and I look forward to many more of these.”

And then the stock was clobbered in after-hours trading, falling nearly 15 percent, or $3.68 a share, to $20.90.

In a three-story building in Palo Alto, Calif. — formerly occupied by Danger, the developer behind the T-Mobile Sidekick — Groupon has been trying to build out a Silicon Valley technology center, one acquisition at a time.

The pursuit was kicked off two years ago with the purchase of mobile app development shop Mob.ly. Mihir Shah, the company’s CEO, started recruiting for the social buying company, and then became the Groupon’s VP of mobile.

Since then, there has been a hodgepodge of acquisitions, including Campfire, which builds chat, calendar and media-sharing tools, as well as Zappedy, which makes a platform for merchants to redeem Internet-based offers more easily.

Last week, it continued with Adku, a low-profile San Francisco start-up that helps e-commerce retailers fine-tune their recommendation engines using external factors, such as whether it is hot or cold outside.

None of the teams have been extremely big or expensive, but Groupon insists that they already are having a major impact on the company.

That may be hard to believe in a company of more than 10,000 employees, most of which are salespeople who are not working on technology.

But Adku’s co-founder Carlos Whitt, who is joining the company along with five others from his team, said the entrepreneurial vibe in the building is “ridiculously exciting.”

“The opportunity, the innovation and entrepreneurs are all there,” he said. “It’s a good intersection.”

Still, Groupon has not been able to attract every entrepreneur it pursues. It had been actively trying to buy other social start-ups, such as Gowalla. That particular deal went to Facebook. Another would-be Groupon acquisition target, Clever Sense, was won by Google.

No matter, according to Mob.ly’s Shah, who said Groupon is actively evolving beyond a daily deals service into a company that builds a set of key marketing tools for local merchants that increases sales, cuts costs and boosts productivity.

Some of the early tools include online calendars to make it easy for spas or gyms to book appointments online, and rewards programs that allow merchants to identify loyal customers who return and spend a lot of money.

Groupon also recently revamped its merchant center, where its customers can manage their daily deals and other programs in an online dashboard.

Shah said the idea is to create a marketing suite that makes small businesses more efficient and productive.

“We never want to stand still and be a big company,” he said.

But the big question is whether those tools will be sticky enough to keep merchants coming back to offer new deals, which is where Groupon gets all of its revenue from. That’s because most of the new tools are expected to be given away for free and not generate any additional income — at least for now.

It will also have to be enough to keep away other close competitors, such as LivingSocial, Google and Amazon.

The ability to spur innovation and keep ahead of rivals will be on the minds of analysts when Groupon reports its first financial results as a publicly held company this afternoon.

Wall Street is expecting the company to report three cents per share profit on revenue of $475 million in its fourth quarter earnings, according to Thomson Reuters.

That’s up from $430 million in revenues in the third quarter and will be Groupon’s first profitable quarter in nearly two years

In particular, analysts will be listening for updates on some of the company’s core programs, such as Groupon Now, which is its mobile product that allows consumers to purchase deals minutes or hours before redeeming them based on their location. Other metrics may be shared regarding loyalty and retention programs.

This is also Groupon CEO Andrew Mason’s first big chance to speak to the investment community since the end of the company’s quiet period (which he wasn’t really good at keeping, anyway).

Groupon’s stock increased nearly three percent yesterday to close at $24.19, which is just above its IPO price of $20 a share.

The Mountain View, Calif.-based company tries to boost online companies’ revenue by placing targeted promotions and offering incentives at the point of checkout.

It’s a bit similar to how grocery stores try to boost sales by strategically placing tabloid magazines, gum and candy bars at the register to spur last-minute impulse buys.

Instead, TrialPay makes last-minute offers to give people incentive to make a purchase when they are on the fence.

As an example, TrialPay’s CEO Alex Rampell said that when people visit Fandango’s site, they may get an offer for a free movie ticket if they sign up for Netflix. Or, in a Zynga game, you might be offered a virtual bouquet for free, in return for purchasing real flowers on Valentine’s Day.

Visa’s participation in the investment, which is being announced later this morning, is rare. Over the years, the payments company has made a few acquisitions, including PlaySpan, CyberSource and Fundamo, but Visa’s only investment in recent memory was in payments darling Square, which allows anyone to accept payments using a cellphone.

Rampell said that with Visa’s help, TrialPay will be able to expand to offline merchants from working exclusively with online retailers, by giving it a way to track if a person visited a store and made a purchase.

“The question is, how do we send traffic to Starbucks or McDonald’s or any other offline merchant?” Rampell said. “We already have access to people online who are buying or thinking about buying something. It would be great if we could could give you 20 virtual coins if you shopped at McDonald’s. But how do we close that redemption loop?”

Today, TrialPay, which has 130 employees, reaches more than 70 million monthly active users worldwide. In 2011, Rampell said, revenues more than doubled; he declined to offer specifics.

Rampell also declined to provide details about potential partnerships with Visa. Visa also declined to comment.

Investors in the company’s fourth round included new investors Greylock Partners, Visa Inc., T. Rowe Price, DAG Ventures, DFJ Growth and QuestMark Partners. Existing investors also participated. To date, it has raised roughly $70 million.

For more of Rampell’s opinions on how the payments space will evolve, check out his Web 2.0 speech from October:

Rakuten is set on challenging Amazon’s global dominance by appealing to the third-party merchants Amazon works with today and by growing it’s digital content business to compete with the Kindle.

We recently learned about the company’s strategy through the eyes of Neel Grover, the CEO of Buy.com, Rakuten’s online shopping subsidiary in the U.S.

For now, Rakuten is admittedly Amazon’s much smaller competitor, though it is dominant in Japan.

The publicly held company is worth $14.5 billion compared to Amazon’s $85 billion market capitalization, and it pales in comparison to Amazon’s mass in the U.S. Buy.com is ranked 410th here versus Amazon’s sixth-place standing, according to Compete.

But Grover said Rakuten has a two-part plan for going up against Amazon.

First, it will target and partner with third-party resellers and merchants.

Amazon does this, too, but often ends up competing with the merchants because it has its own warehouses and products that it is selling, he said.

“Oftentimes Amazon will compete with the retailer. [Third-party merchants] teach Amazon what to buy and sell, which is ultimately not good for the merchant,” he said.

Rakuten, on the other hand, does not own any warehouses or any inventory itself and instead gives retailers — brick and mortar or e-commerce — the tools and traffic to support their own businesses.

In May 2010, Rakuten acquired Buy.com.

“I sought out Rakuten. … I thought their model was one that would give us a unique differentiator in the U.S. and we could learn and bring their model to our site and customers,” Grover said. “We are still in the final stages of transforming, and it’s taken a bit of time to get it transformed.”

But, he confidently added, “It will win out in the long-term.”

A similar approach is being taken by eBay, another e-commerce giant in the U.S.

The second part of Rakuten’s plan is to go after Amazon’s growing digital business, spanning music, e-books and other content.

In November, the Japanese company purchased Kobo, a runner-up in the e-reader race behind the Kindle and Barnes & Noble’s Nook. It paid $315 million in cash for the Canadian company.

Rakuten is banking on the Kobo in assisting with its move into providing downloadable media to consumers, starting with e-books.

At the time of the acquisition, Kobo CEO Michael Serbinis told All Things D that Rakuten will give Kobo the financial backing to grow internationally, as well as compete in the U.S.

“The U.S. is absolutely important. It’s fundamental. We have millions of U.S. users today, and we plan to grow that substantially, and internationally it represents a big opportunity as well,” he said.

Earlier this month, Buy.com started linking to Kobo from its site, so that consumers have the option of buying a physical copy of a book or a digital version. Other integration efforts are also under way.

It also wants to get into other digital content, like music. Back in 1999, Buy.com was one of the original sites to have a digital music store, but Grover said it was a pretty poor experience because of all the restrictions that record labels were mandating. A lot of that has now changed.

“We are definitely looking as a group at all digital content. … We are looking at different solutions, but today we have not continued on with our initial music store,” he said.

As with Kobo and Buy.com, acquisitions are always an option, he said.

“We’ll continue to look at everything that would make our business better. It hasn’t been shy over the past two years. We have a global vision to create an e-commerce marketplace offering all goods, and we continue to see that grow.”

And going up against Amazon, some serious growth is what Rakuten and Buy.com will need.

Gupta joined the company 18 months ago after Google acquired Jambool, a virtual goods payment platform where he was a founder and CEO. More recently, he’d been one of the leaders on the payments team, overseeing Google Wallet and reporting to Osama Bedier, Google’s VP of Payments.

“I can confirm that Vikas has left Google and we wish him all the best in his future endeavors,” a spokesman said.

Jambool’s product, Social Gold, was rolled into Google’s payment products and is being used for in-app purchases on both Android Market and Google+ Games.

According to Gupta’s LinkedIn page, he joined Google in August 2010 and held the title of head of consumer payments. Jambool reportedly was purchased for $55 million before any additional earn-outs. Prior to founding Jambool, Gupta worked at Amazon.

Gupta’s departure is the second management move made in the Google Wallet ranks over the past week.

A spokesperson declined to say if the division was undergoing a wider restructuring, but last week, I reported that Google’s VP of Commerce Stephanie Tilenius was moving into a more global position. And, as part of that, Bedier will be taking on a larger role within Google Wallet, though his title will not be changing.

The Wallet is Google’s mobile payments strategy that allows users to tap their phone at the register to pay using near field communication technology. The company has already successfully formed alliances with both banks and retailers, and is leveraging its vast install base of Android users.

Today, it is live with some merchants, although it does face some challenges.

Currently, it only works on one phone from Sprint, and both consumers and merchants will most likely have to upgrade their hardware for it to work. Additionally, some carriers, such as Verizon Wireless, have decided to disable Google Wallet on phones they are shipping. Other carriers, which are part of a mobile wallet joint venture called ISIS, are expected to follow suit, effectively limiting access for many U.S. consumers.

More than six months after hosting a flashy launch event, the business may be getting a lot harder than it originally looked.

In November and December, the number of online transactions increased by 37 percent, and overall sales jumped by 25 percent. But the average ticket size declined by 9 percent, according to Chase Paymentech, which analyzes information across the top 50 e-commerce retailers.

As it turns out, more consumers are turning to e-commerce for more of their everyday spending, rather than reserving online purchases for big-ticket items.

Here are Chase’s three reasons for the decline:

• More consumers are purchasing digital media, which has a lower price point than most physical goods — MP3s cost less than CDs, e-books cost less than paperbacks, and apps cost less than game cartridges.
• Prices for popular electronics, such as tablets, e-readers and TVs, are falling.
• More retailers are offering free shipping, which eliminates the incentive to fill carts to reach a free-shipping threshold.

EBay, which is the first major e-commerce provider to report Q4 results, confirmed it was also seeing the trend. The company’s payments division, PayPal, reported smaller transactions during the fourth quarter across the merchants it serves.

John Donahoe, eBay’s CEO, explained in an interview that the biggest driver of that trend was eBay’s acquisition of Zong, a mobile payments provider that powers the sale of digital goods. In addition, Donahoe said retailers, including eBay, heavily discounted products in order to drive more purchases this holiday.

Amazon, which is the leading e-commerce provider, also said that it is selling a lot of low-priced digital goods, ranging from e-books to MP3s.

Historically, the company has said that Christmas is the largest day of digital sales on Amazon.com, followed by Dec. 26. In 2010, from Christmas Eve through Dec. 30, Amazon customers purchased three times more digital content — including Kindle books, magazines, movies, TV shows, music and digital games — compared to the weekly average for the year.

Despite transactions declining overall, Chase identified two exceptions: Apparel and footwear rose 6 percent; toys rose 10 percent year over year.

(Amazon photo courtesy of thisisbossi)

The company, which plans to launch soon in the U.S., has created a way for people to easily give gift cards to their friends through social channels such as Facebook.

Greylock will contribute $5 million to the company’s first round, increasing the total to $10.5 million. Creandum — along with Atomico, which was founded by Skype co-founder Niklas Zennström — invested in the round last year.

“The gift card industry has grown to a $100 billion industry, and yet very little innovation has been done around social networks and smartphones,” Hoffman said in an interview. “You put those two things together and suddenly you get a much easier way to give.”

The funding will be used to launch the service in the U.S. and the U.K. this quarter, with other markets following.

The social gifting service has three components:

First, people can learn about their friends’ birthdays or other occasions on Facebook, or through notifications on their mobile phones.

Second, users will be able to give friends gift cards that mutual friends or family members will be able to contribute to on Facebook.

Third, Wrapp is partnering with retailers and merchants which will also contribute $5 or $10 to the card.

The logic is that if many people are willing to contribute to a gift card, the gift becomes more meaningful. Retailers are willing to participate because it might drive traffic to the stores and get consumers to buy something that they normally may not have bought.

Wrapp was started 2011 by Hjalmar Winbladh and others, including Andreas Ehn, Spotify’s founding CTO, and Carl Fritjofsson, an advisor to Groupon.se.

Wrapp is currently growing more than 30 percent every week in Sweden, where it is working with more than 25 merchants. Already, 2 percent of the nine million residents there are considered active users of the service.

“It’s certainly showing a great early curve in Sweden, and we have every expectation the curve will be replicated in other places, like the U.S.,” Hoffman said.

Although the season kicked off with a bang, there were fears that consumer confidence would fall as the end of the year approached. That did not happen, with people continuing to fill their virtual shopping carts until the very last minute; 10 individual days surpassed $1 billion in spending.

According to comScore, the final tally for online spending for the months of November and December was $37.2 billion, representing a 15 percent increase over last year.

ComScore tracks purchases made on Web sites from a fixed Internet connection, excluding spending done via mobile phones and tablets, so presumably the numbers could be higher.

While the numbers being reported sound positive, some analysts worry if they were enough to give giants like Amazon the growth rates needed to hit expectations. Wall Street analysts are expecting Amazon to post a fourth-quarter growth rate of 38 percent, which would mean it would have to be growing twice as fast as the average market.

But Chase Paymentech’s annual Cyber Holiday Pulse Index painted a rosier picture of the holiday season. Based on tracking 50 of the leading online merchants in the U.S., the report found that during the final two months of the year, transactions were up 37 percent and sales rose 25 percent.

One of the reasons for the huge gains, it said, was because Christmas fell on a Sunday this year, allowing merchants to guarantee shipping much later into the week and giving consumers more time to make online transactions.

To be sure, the increase in online shopping is coming from somewhere — most likely at the expense of traditional retail, which is expected to report a less impressive 4 percent growth rate this year.

“It’s clear that e-commerce continues to gain market share from traditional retail due to the attractiveness of the Internet’s convenience and lower prices,” said comScore Chairman Gian Fulgoni. “Consumers were especially attracted to the deals and discounts available through digital channels -– particularly free shipping, which occurred on well over half of transactions this season.”

The most impressive finding of the season was that 10 individual days surpassed $1 billion in spending, compared to only one day in 2010.

Here is a list of the 10 biggest online shopping days in 2011, led by Cyber Monday:

(Image credit: iStockphoto.com/mbortolino)

The payments company will be using the name V.me to differentiate it from its more well-known services found at thousands of retail locations around the world.

Consumers will be able to fund the digital wallet using a variety of sources — a Visa, MasterCard or bank account.

It will be used to check out online using a user name and password, rather than having to key in the 16-digit number each time. The idea is similar to eBay’s PayPal, and to services by Amazon as well as e-wallet services being developed by American Express.

It will also be useful for checking out while shopping from a browser or application on a mobile phone or tablet. Later next year, Visa plans to roll out mobile payments to the register, where consumers will be able to tap and pay using near field technology.

The digital wallet is in a closed beta today but will be coming out in early 2012, after the holidays.

Jennifer Schulz, Visa’s head of product, strategy and innovation, said the wallet is intended to be open and funded through sources outside of Visa, and therefore “we wanted [the brand] to evoke Visa, and link to it, but without saying Visa.”

To accelerate the adoption of Visa’s payments services, including V.me, Schulz said Visa is unveiling a new developer program that will give anyone, including retailers, merchants and start-ups, access to its payments services.

The tools give mobile developers easier ways to accept payments on the phone, and help game developers that want to sell low-priced digital goods. There are also tools for big-box retailers.

American Express is also trying to woo developers, but rather than focusing on opening up its platform to developers, it has created a $100 million fund to invest in digital commerce opportunities.

Visa’s developer center brings its subsidiaries — including Authorize.Net, CyberSource, Fundamo and PlaySpan — together under one roof.

“We are announcing the Visa Developer Center, which is our platform for engaging developers globally with our Visa payment solutions,” Schulz said. “It provides us with a platform for engaging an important set of constituents.”

The Washington, D.C.-based company will also be trying out a poorer-man’s option, called Instant Ordering, that offers takeout and delivery from a wider selection of restaurants.

Both services will be offered at full price, breaking the company’s tradition of offering deep discounts to restaurants, spas and other experiences.

Initially, the services will be available in LivingSocial’s hometown as the kinks get worked out of the system, but the company has ambitions to take it wider.

“We think it’s going to really resonate with people,” said Tim O’Shaughnessy, co-founder and CEO. “If merchants can figure out how to expand their tables outside their restaurant, that’s a whole new revenue stream and introduction to people for them.”

The Instant Ordering service will leverage restaurants that already have existing delivery or takeout options, but Room Service will be for restaurants that have never tried it before. LivingSocial will provide the vans and the delivery personnel, and will drop off the food at a designated time. It will also pick up the plates the next day.

It sounds a little bit like Kosmo, the venture-capital-backed free delivery service that exploded during the dotcom boom, but Room Service is working with high-end restaurants, which probably have larger margins to play with than a movie rental or a pack of cigarettes.

In a description of the service, LivingSocial writes: “Along with an elegantly plated meal on ceramic dishware, we’ll provide you with everything you need, from a cloth napkin to candles. As for those dirty dishes? We’ll take care of those, too. Just place them in a LivingSocial Room Service container, leave them outside your door the next day, and we’ll pick them up.”

We hear there’s chocolate for dessert, too. Just not on your pillow.

Starting on Tuesday, 70 merchants will be participating in the company’s Instant Ordering service; Room Service will kick off on Thursday and Friday with just one. The service’s guinea pig is D.C.-based Kushi, a sushi restaurant co-owned by Ari Kushimoto Norris.

Kushi will offer two set menus for $66 each. The first offers several small plates, including shrimp and pork skewers, with a plate of sushi. The second offers vegetarian small-plate options, such as mushrooms and soba noodles with a plate of sushi.

Kushimoto said the price compares to a meal at the restaurant, with tip included. An undisclosed portion of the revenue will go to LivingSocial. O’Shaughnessy explained that the value of Room Service is not in the discount that the company is typically known for giving, but in the convenience and experience of the service.

Kushimoto said she believes it will be an attractive service for working families that don’t have a babysitter, but have the capacity to spend money on a regular basis in restaurants.

One of the challenges she dealt with in early trials involved retaining the quality of the food — in other words, keeping the warm plates hot and the cold plates chilled. But delivery is something Kushimoto has always wanted to try. Since LivingSocial is hiring the delivery drivers and promoting the service, she doesn’t have to worry about taking on the risk of hiring extra personnel before it takes off.

Both new services will be part of the company’s “Instant” offering, which include being able to buy a discount via a mobile phone and redeem it in a matter of minutes. Instant is currently live in 22 metropolitan areas.

So far, the variety of merchants offering deals in any particular neighborhood can be low, but by offering a list of options, where you can get take-out or delivery, the catalog will grow, albeit at full price. Of course, merchants will have the option of offering a discount, and users will be able to redeem prior offers.

But in this game of one-upmanship, Square has thrown down the gauntlet by announcing this morning that it has made the payment process hands-free.

The San Francisco company, which was recently valued at $1 billion, said it has made it as easy to pay as saying your name.

A new version of its application, called Card Case, will leverage geo-fencing capabilities in Apple’s latest operating system update for the iPhone. The technology will identify when a person is within 100 meters of a favorite merchant.

Square’s Director of Products Megan Quinn explains that when a shopper is within range, a tab at that establishment will automatically open — without that person ever touching his or her iPhone. Once the user places an order and goes to pay, all they have to do is give their name.

The merchant will see on its iPad that a tab has been opened in that person’s name from inside the Square app.

Once a customer gets outside of the 100-meter range again, the tab will automatically close, whether a transaction was conducted or not. In theory, this means it would only be open for a few minutes if the shopper simply walked by a coffee shop and didn’t stop.

In addition to having to have an iPhone with the latest operating system, the consumer will also have to designate shopping establishments at which tabs could be automatically opened.

Since Square opened it up eight weeks ago, 20,000 merchants nationwide have joined the Card Case app’s directory.

In May, Square unveiled its mobile payments strategy for small retailers, including the iPhone and Android applications for consumers and the iPad software for merchants. Before that, it had focused primarily on allowing small businesses to accept credit cards using a swipe accessory plugged into a smartphone’s headphone jack.

Quinn said the most obvious benefits to the new features are speed and ease of use; however, there’s a more touchy-feely reason, too. “We’ve removed the artifacts from the experience, so it’s about the interaction between the merchant and the customers.”

In other words, it’s like walking into Cheers, where everybody knows your name.

[Photo credit: Wikipedia.]

The daily deals giant cut back on marketing expenses and still showed it could make a profit in North America, plus it delivered on a number of other key metrics.

Marketing costs are the primary way Groupon gets subscribers to sign up for its email list that offers a deal every day and therefore is the lifeblood of its growth engine.

But it is also costly and unsustainable.

In today’s filing with the SEC, it showed it could continue to grow despite reducing its marketing expenses by 20.4 percent during the quarter in the U.S. alone.

Here are some key takeaways from the quarter as compared to the prior quarter on a worldwide basis:

• Revenues before the merchant’s cut: $1.16 billion vs. $929 million
• Subscribers: 142.9 million vs. 115.7 million
• Paying Customers: 29.5 million vs. 23 million
• Participating merchants: 78,649 vs. 78,466
• Groupons sold: 33 million vs. 32.5 million
• Average revenue per subscriber: $3.30 vs. $3.90
• Average revenue per Groupon sold: $13 vs. $12.1
• Groupons sold per paying customer since 2009: 4.2 vs. 4
• Total unique paying customers: 16 million vs. 12.1 million

Saverin, who also helped inform the plot of Aaron Sorkin’s “The Social Network,” invested in the company’s $6.5 million round back in March. He will also oversee the company’s entrance into the Asian market, although today the company is launching in the U.S. and Europe.

The goal of the Mountain View, Calif.-based company is to make entering a user’s credit card information into an online form a snap, while also making it much more secure, according to Jumio Founder and CEO Daniel Mattes (pictured right).

It works like this: To purchase something online, consumers hold their credit card in front of their webcam. The card is quickly recognized and verified without taking a picture or storing the data on the computer. The information is then entered in the correct format.

The technology will soon also be adapted for mobile phones so merchants can accept payments in person by using the phone’s camera.

Mattes said it solves two pain points — usability and security.

During trials, he said Netswipe was able to decrease the number of consumers who abandoned their purchases at checkout to 21 percent from slightly more than half. It can also cut down on fraud, because consumers must have the actual card in hand.

“It’s almost impossible to make and use fake cards. We can detect if the type is embossed or if there is a hologram,” Mattes said. “We spent a lot of time and money and effort on accuracy.”

With so many advances taking place in the payments space right now, the technology is already similar to a couple of solutions on the market.

First, there’s Square, the well-backed San Francisco start-up, which has created a card reader that plugs into either a cellphone or a tablet, so that payments can be accepted cheaply and easily in person. Second is Card.io, which captures payment data by holding a credit card up to a phone’s camera to automatically read the card information and enter the appropriate data.

Mattes said Jumio is “like Square for online,” although Jumio will also soon be coming out with a mobile version for making in-person payments.

Jumio will have three products initially, which will let merchants decide how comprehensive a payment network they want. If merchants only want to use the scanning technology via the webcam, it costs 15 cents a scan; for more comprehensive services, smaller merchants will pay a flat rate of 2.75 percent per transaction with no set-up or monthly fees.

So far, Mattes said Jumio has five merchants signed up, but he wasn’t willing to name them at this time.

New investors Singapore’s EDBI, SingTel Innov8, and Motorola Solutions Venture Capital join a handful of existing investors, including Alloy Ventures, Citi Ventures, Draper Fisher Jurveston, DFJ Gotham, First Data, Miven Ventures, Motorola Mobility, Nokia Growth Partners and NCR.

To date, the company has raised $90 million.

ViVOtech’s near field communication technology is being used by Google to enable Android users to tap their phones at registers to make a payment.

Google unveiled its mobile payments and offers initiative last month, and since then a lot of interest has poured into the space, with other companies, such as Square, American Express, Visa and others coming up with several alternatives.

The 10-year-old Santa Clara, Calif.-based company is providing the NFC-enabled point of sale readers to merchants also participating in Google Wallet. So far, the company has shipped more than 600,000 readers in the U.S., which are all capable of accepting Google Wallet payments.

The new funding will be used to expand internationally beyond the 35 countries it serves today.

That’s when a merchant gets bombarded with unprofitable customers who spend no more than the coupon is worth and have no intention of ever returning.

A New York start-up believes it has a solution for high-end restaurants, which like the idea of filling empty tables but are terrified at what a coupon deal might do to everyday business.

The company has relaunched as Savored.com (formerly VillageVines) and is doubling the number of markets it serves to 10.

It may be on to something. In the past six months, the company has grown from six employees to 45 and has increased reservations by 335 percent and subscribers by 228 percent. Additionally, participating restaurants are on track to generate more than $25 million in sales this year.

Savored co-founder Ben McKean tells us how it works:

Members who sign up for the service pay $10 to book a reservation at a restaurant and in return get 30 percent off their entire bill, including alcohol. The restaurant keeps all of the profits.

That differs significantly from daily deals sites, which typically keep half of the revenue from a voucher that is already 50 percent to 70 percent off.

McKean said the model is completely different.

Restaurants alert Savored.com to a specific number of tables on specific nights that they know they won’t be able to fill on their own. Savored.com helps them fill those otherwise empty tables, just as Priceline helps hotels fill empty rooms or airplane seats.

“The restaurant knows it will have an empty table,” McKean said. “They know their traffic patterns really well.”

Some of the 500 participating restaurants are high-end names like Daniel Boulud, Jean-Louis, Peter Kelly’s Xaviars, Capital Grille, China Grill, Aquavit and the Patina Group. The service is live in Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington, D.C.

An important part of the process is discreetness: The need to print out a coupon or even mention that the table was reserved through Savored is completely eliminated. McKean said restaurants like it because other patrons don’t know that some tables are receiving a discount, and patrons like that they don’t have to fuss with print-outs or disclose to their eating partners that they aren’t paying full price.

Since Savored.com is making only $10 from each transaction, its model is less profitable than the traditional daily deal. But McKean is okay with that because he believes he is building a much more sustainable business (plus, the company has raised only $4 million in venture capital.).

“We launched our current model seven months ago, in September of last year, and we are on track to help restaurants drive $25 million in sales this year,” he said. “The fact that 90 percent of restaurants have never done work with the deal sites means we are succeeding.”

Next up for the company is vertical expansion this year to new areas, such as spas and travel.

Google unveiled a mobile wallet and deals program that will allow users to tap their Android phone at the register to pay using near field communication (NFC) technology.

At the press conference today, it also said it has built a deal network, much like Groupon, that offers consumers discounts and loyalty programs for local retailers and merchants.

(It was only a tiny bit deflating later in the day when PayPal sued Google and its top two payment execs).

Rewind to earlier this week when Square, the company founded by Twitter creator Jack Dorsey, also announced its mobile payment plans.

On Monday, Dorsey showed Square’s way of replacing wallets without using NFC.

Instead of NFC, users order and pay with an iPhone application, where their credit card information is stored. At checkout, they give their name to the cashier, who will need to use an iPad as a register in order to complete the transaction.

Square also envisions building a local deals network.

Both systems are headed into trials at various locations around the country. Google will be expanding nationwide by summer.

For an industry that seemed so far out in the future just a few days ago, that’s a lot of promises being made in just one week.

Both Google’s Eric Schmidt and Dorsey will be making appearances next week at our D: All Things Digital conference to make the case.

In the meantime, which player–Google or Square–is the likely winner?

Put bluntly, neither system is good enough right now.

Even though it seems certain that as a society we will increasingly move away from cash as a primary method of payment, it will take plenty of experiments–and future iterations–to get it right.

Both Google and Square are plagued with the same problem: Making bets on technology and partners that limit the addressable market.

In doing so, neither is able to a cast a big enough net to have a truly disruptive service.

For instance, Google’s solution works only on NFC-enabled Android smartphones running on the Sprint network (Sprint has only one NFC-enabled phone).

Square is on the opposite end of the hardware spectrum.

Its system requires a consumer to have an iPhone and a merchant to have an iPad. It said Android applications are coming soon.

They’ve also both made alliances on the processing side of the business. Google has partnered with MasterCard, while Square has received an investment from MasterCard’s arch rival, Visa.

Of course, this is the very first inning, and the game is not being played by just two teams, so anything is possible. Many others are jumping in, or planning to, and that will make things even murkier.

Going forward, Google may have the scale and determination to make some of those changes that can bring it to the masses, but it’s unclear what its plans are for non-Android devices. It says it is building an open platform, but how open?

In the meantime, Square’s approach appears to be winning over the hearts of the small- and medium-size businesses that don’t have the capacity to adopt complex point of sales machinery. It also has the ability to be platform agnostic since it does not have a stake in who wins the mobile operating system battle.

Maybe for now, the big winner is the customer, who has plenty of choices to pick from.

But don’t read too much into that.

The decision has everything to do with obeying Visa’s best practices and nothing to do with the accusations of security flaws raised last month by VeriFone, the 900-pound gorilla in the space.

Does it mean VeriFone’s concerns are just a teeny-weeny bit valid?

“Absolutely not,” said a Square spokesperson. “Of course, Square meets or exceeds all current industry standards. We are confident that Square already reduces the overall risk in the payments ecosystem….As Square is everywhere, we wanted to work with Visa to raise the bar on security for the next decade.”

The feather-ruffling started last month when VeriFone issued a fairly bold attack on Square, the San Francisco venture-based company founded by Twitter co-founder Jack Dorsey. VeriFone wrote an open letter to the industry alleging security flaws in the product and also produced a video detailing how easy it would be to steal a cardholder’s information using a Square card reader.

Square’s response was that the claims were not fair or accurate and that they overlooked all of the protections already built into your credit card.

A lot of comments on this site and others felt the attack was unnecessarily harsh and pointed to VeriFone’s insecurity with their position in the market. While admittedly unconventional, VeriFone’s CEO Doug Bergeron explained his reasons in a lengthy interview. “We collectively need to create new technology to reduce fraud, whether you are a venture-backed business or a big business. We are both responsible for our own decisions and should be able to fend for ourselves,” he said.

Now, Square seems to be caving on the core issues of that debate. And VeriFone is claiming victory. Of course.

In a statement, Paul Rasori, VeriFone’s SVP of marketing, said: ”It appears that Visa’s investment in Square would not have happened without a commitment from Square to address the lack of security of their payment card readers. The industry heard our concern, and Square finally decided to take security into consideration by including encryption on their mobile payment device later this year.”

The security concerns were addressed yesterday in a blog post by Visa and another by Square’s COO Keith Rabois.

In Visa’s post, it announced that it had come up with its own best practices for the mobile industry for merchants, software developers and device manufacturers to follow. One of the many things it called for was encryption of cardholder data at the the card reader. “We are pleased that Square, the Jack Dorsey start-up that enables small businesses to accept card payments through mobile devices, has expressed its support of Visa’s best practices and its intent to adopt them.”

Rabois wrote: “The adoption of best practices will help increase trust in innovative payment solutions. Of course, Square complies with all current industry standards, and we are committed to meeting or exceeding industry guidelines as they evolve–all while keeping our card reader free.”

eBay said the Boston-based company will assist its local and mobile commerce efforts by helping to connect retailers with consumers, and will complement its purchase of Milo last year.

Milo tracks local inventory in physical stores to give consumers an option for shopping in person in addition to online.

Where, which was started in 2004, has built a location-based advertising network, which provides deals to consumers centered on their whereabouts. Last year, the company purchased a Groupon-like offer network as well. It said today, more than 120,000 retailers, brands and small merchants use Where daily to reach local audiences.

Where’s own mobile application provides business listings for restaurants and other local services and is available on at least iPhone and Android.

The purchase of Where by eBay highlights a trend that many retailers are finding disturbing. Increasingly, as smartphones begin to dominant, consumers are visiting stores to examine the various products for sale, but uses their phone to find better selection or prices and ultimately purchase online. While that’s a big opportunity for companies, like Amazon, there’s likely also a business opportunity in directing customers to local outlets, where they get instant gratification, as well.

In a blog post, eBay said PayPal’s online payments technology will be integrated into the WHERE mobile application, allowing consumers to find local deals anytime and purchase items instantly.

Terms of the agreement were not disclosed, although BostonInnovation.com is reporting eBay paid $135 million. The acquisition is expected to close in the second quarter.

Where, previously called uLocate, has raised at least $11 million in funding from Venrock, GrandBanks Capital and Kodiak Venture Partners.

The company essentially stumbled into the mobile advertising space out of necessity. It was often struggling to keep its advertising fill rates in its own apps high enough through partnerships with mobile ad networks, like Quattro Wireless. And when campaigns ran out, it resorted to using less desirable banner ads for ringtones and wallpapers, reports mocoNews.

To remedy the problem, the company created its own local ad network, and ended seeing so much success turned it into a separate business. When it launched early last year, it was being used by sites, such as Geocade, Jambase, MocoSpace and Superpages.com. In September, WHERE said it delivered over one billion ads in 30 days and had 100 publishers.

The purchase of WHERE and Milo are only two of a number of recent acquisitions by the e-commerce giant, which also owns PayPal. It’s most notable acquisition recently was its decision to buy GSI Commerce for $2.4 billion.

Federal prosecutors in Manhattan have alleged the poker companies, which are located outside the U.S., tried to sidestep U.S. laws prohibiting banks and credit-card issuers from processing gambling payments by disguising billions of dollars from U.S. gamblers as payments to nonexistent online merchants for golf balls, jewelry, flowers and other merchandise.

After U.S. banks and financial institutions began detecting and shut down bank accounts used by the scheme in late 2009, prosecutors allege, a new strategy was developed in which two online poker websites allegedly persuaded a few small, local banks facing financial difficulties to process their payments in return for multimillion-dollar investments in those banks.

Read the rest of this post on the original site »

No, it’s not the mall. It’s Facebook.

So, could the social network also be the place you go to shop?

Christian Taylor, the CEO of Payvment, believes it is only a matter of time.

Payvment launched a Facebook Mall two weeks ago, where consumers can shop among 50,000 retailers and add items to a single shopping cart. Payvment is signing up around 300 new storefronts daily and has roughly 1.2 million items in the mall today.

Taylor doesn’t tread lightly when on the subject.

“Facebook is the perfect storm to become the largest shopping portal on the planet,” he said. “I think it’s a no-brainer that e-commerce on Facebook will be huge. Amazon is so big because of its traffic, and Facebook blows it away.”

Taylor’s interest in social shopping developed by accident.

Pre-Payvment, Taylor was the president of Xcreative Interactive, a company that was building Facebook pages for large entertainment and media brands. He said it was very successful and had huge clients such as Disney and Lionsgate.

But there was one big problem.

The pages would always garner millions of fans, “but we could never get them to buy a DVD or a movie ticket. It was very hard to convert off the network,” he said.

That’s when they saw an even bigger opportunity to build e-commerce services for small and medium sized business. The employees voted to shut down the company and move from New York to Palo Alto.

That was almost two years ago.

After the move, it developed a framework that allowed companies to build e-commerce capabilities into their Facebook pages as a separate tab.

While it attracted thousands of merchants, he said there was a problem with that, too.

“Even if you have 5,000 fans, at the end of the day, you are only selling to 5,000 fans,” he said. “It took us four months to discover that there’s something wrong here. You needed a way to be discovered.”

Enter the mall and the single check-out experience across multiple brands.

Already, the difference has been noticeable, Taylor said.

Before the mall went live on Feb. 24, about 3,000 of its 60,000 merchants were regularly selling items, or roughly five percent. “When I tell you it was night and day, I can say that [sales] quadrupled the day we flipped the switch on the mall.”

Should Amazon or other e-commerce leaders be scared of Facebook’s ability to garner a very large audience?

Taylor: “If they are not, they should be.”

“The really scary part for the old regime should be that people return to Facebook daily and spend more time on Facebook than any other Web site on the net….We are turning Facebook into the largest shopping mall on the planet.”

The threat is clearly not imminent. Today, Amazon, eBay and other retailers that have gone online, like Best Buy and Target, have large audiences themselves.

They are also experimenting with ways to make shopping more social, as we’ve reported before, but generally e-commerce has failed to become very social yet.

However, Payvment believes with the social graph acting as the center of the shopping experience, it can take it to another level. Visitors to the mall “like” individual items to surface them to the top. It’s also much easier to shop for a birthday or Christmas.

So far, Payvment’s Shopping Mall on Facebook has attracted 9,015 monthly active users and 568 “likes.” While Payvment claims to work closely with Facebook, it has no direct ties or arrangements with the social network.

The company also doesn’t make any money yet.

Its platform is entirely free, and anyone that adopts the platform right now will be grandfathered in for life. In return, they are asked to provide feedback.

To date, the company has raised $8 million in capital from Sierra Ventures and BlueRun Ventures. It has 20 employees.

One indicator is the sales of prepaid gaming cards that are purchased at Walmart, Target, 7-11 and many other retailers.

While the game cards are typically purchased in person, they can be used for a range of things, from buying virtual goods within FarmVille  to buying a game that’s digitally delivered over the internet via Xbox Live.

Today, NPD released industry sales figures for February today, reporting that prepaid game cards now account for 22 percent of all accessories sold and that sales have increased 52 percent compared to a year-ago.

Meanwhile, in the same time period console software sales only increased by 2 percent.

NPD’s Analyst Anita Frazier said the jump in game card sales points to the increased importance of digitally distributed content sales within the games industry, and that last month marked the best February on record for accessory sales.

The top-selling item was the Xbox 360 1,600 points card.

Overall, NPD reported that physical retail channel in the U.S. generated video game hardware sales in February of $467 million, increasing 10 percent. Video game software, including console and portable totaled $601.4 million, dropping 5 percent, and video game accessories totaled $257 million, increasing 22 percent.

To that end, Adobe is unveiling new features today that will enable marketers to monitor, measure and monetize platforms, where consumers are having conversations about their products and brands.

As an example, Aseem Chandra, VP of Marketing for Adobe’s Omniture Business Unit, said the product will be able to alert a company to a spike in traffic on Twitter, and track down the original source.

What they might find out is that Justin Bieber, who has nearly eight million followers, tweeted about his favorite jeans, which was read and spread by thousands of others on Twitter or Facebook.

With that information, the tools could then enable a brand to make decisions on future celebrity partnerships, or more likely, on what keywords to buy on Google.

Chandra said one reason it has gotten so difficult to see where the traffic is originating from is that a ton of activity is also coming from mobile devices, including the proliferation of tablets. “How do you measure that, and where does it originate from? You want to be able to correlate those two and encourage the behavior,” he said.

The new SocialAnalytics features, which are apart of Adobe’s Online Marketing Suite, is expected to be unveiled this morning at Adobe’s Omniture Summit in Salt Lake City. The tools track more than 40 different social networks and gather positive, neutral or negative sentiments. A beta was introduced last year, and since then 75 customers have been using the platform. The product will be available more widely in the third quarter.

Chandra said the past year has shown them how important social media is to media, entertainment and e-commerce companies.

“Everything we do as consumers and professionals is informed by social. That’s going to stay regardless. The conversation we are having with CMOs is that they see that, and are asking us how do I make the important decisions around their business, marketing programs and campaigns? …There’s a lot of activity and it’s well deserved.”

The estimates were released today by BIA/Kelsey, but seem conservative given some of the official figures known about the largest players in the space.

For instance, Groupon turned down a $6 billion offer from Google late last year, and then raised nearly $1 billion in venture capital.

Groupon also recently disclosed in an internal memo that it saw its revenue surge to $760 million last year from $33 million the previous year (although more than a third of its 2010 sales came from outside the U.S.).

But that’s only Groupon.

The No. 2 player in the space, LivingSocial, which raised $175 million from Amazon.com, said it was booking revenues of more than $1 million a day and is projected to record well over $500 million in revenue in 2011.

Both companies are well-positioned with nearly 200 other players trying to get into the space, and as of March 1, deals were being offered in 178 cities, reaching 102 million people, according to the research firm, which is hosting an event on the topic later this month in Boston.

The daily deal providers operate by building large local sales forces that negotiate deals on services and products at roughly 50 percent off. Customers then purchase the vouchers in advance, and the companies keep about half of the revenues from the sale.

BIA/Kelsey said its revenue expectations factor in that the novelty of these group-buying discounts will fade and e-mail open rates will fall as time passes. In its most optimistic scenario, U.S. revenues could hit as much as $6.1 billion in 2015.