Verizon abandons $2 'convenience fee' after consumer backlash

Verizon Wireless announced on Friday, after one day of consumer backlash and interest from a federal regulator, that it has decided to scrap a $2 "convenience fee" for credit and debit payments made either online or by phone.

"At Verizon, we take great care to listen to our customers," said Dan Mead, Verizon Wireless' president and CEO, in a statement. "Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time."

The decision to not implement the controversial fee came down "in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions," Verizon said in the statement.

The $2 fee was supposed to go into effect on Jan. 15 and be charged to customers each time they paid their bills with a credit or debit card -- unless that customer was enrolled in automatic bill-paying options that can charge credit and debit cards or withdraw money directly from bank accounts.

The decision also came after the Federal Communications Commission said on Friday that it would look into the charge as well as an online petition at the website Change.org that contended the fee was unnecessary.

When Verizon introduced the fee on Thursday, it said it was doing so to help cover the costs of processing fees taken from credit and debit payments by credit card companies.

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Photo:  A Verizon Wireless store in Portland, Ore.  Credit: Don Ryan/Associated Press

Verizon's $2 'convenience fee' sparks online petition, FCC interest

Verizon Wireless' new $2 "payment convenience fee" for online credit and debit payments is sparking a consumer backlash and a some scrutiny from the Federal Communications Commission.

Since the fee was announced Thursday, customers of the nation's largest wireless carrier have complained about the charge on Twitter, in Facebook groups and pages and Google+ too. The $2 charge is set to go into effect starting Jan. 15 for Verizon users not enrolled in automatic bill pay options who pay their bills online with a credit or debit card.

On Friday morning, the FCC said in a statement that, "On behalf of American consumers, we're concerned about Verizon's actions and are looking into the matter."

Molly Katchpole, a Washington activist and Verizon subscriber, started a petition at the online activism site Change.org calling for Verizon to scrap the $2 fee.

The Change.org petition, launched late Thursday, is a tactic Katchpole used earlier this year when Bank of America attempted to institute a similar $5 fee for those who use its debit cards for purchases.

The Bank of America fee promoted a national outcry and eventually the bank abandoned the fee before it could go into effect.

Time magazine identified Katchpole's petition as one of the many instrumental actions that defeated the Bank of America fee and the activist is hoping to have similar success this time around with Verizon. As of the middle of the day on Friday, the petition had more than 37,000 signatures.

"Verizon just announced a new $2 fee for paying your bills online. Really. Even though paying via internet is fully automated," Katchpole's petition reads. "It's not just about the money (though if you're like me, you don't have extra cash to be sending to a giant phone company in order to pay your own bills.) It's that Verizon thinks it can do anything to its customers, and that we're powerless to stop it. (Spoiler alert: We're not.)"

Verizon, which has more than 90 million customers, said it was introducing the fee to help make up for the frees credit card companies take when they process payments.

In 2010, Verizon Communications, Verizon Wireless' parent company, reported a profit of $10.2 billion, down from $11.6 billion in 2009. Last quarter, Verizon doubled its profit from a year earlier to $1.38 billion.

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Photo: A sign at a Verizon store in New York. Credit: Seth Wenig / Associated Press

Verizon to begin charging $2 fee for many online bill payments

Verizon Wireless is about to make paying your monthly cellphone bill a little more expensive.

Starting Jan. 15, the nation's leading mobile carrier will charge customers $2 each time they pay their bills with a credit or debit card.  The fee applies to so-called "single payments," when a customer is paying for an individual month, but will not apply for users who set up automated monthly billing.

The carrier, which has more than 90 million retail cellular subscribers, said it was adding the fee to help cover the costs of the many credit card transactions its processes.  Card companies such as Visa and MasterCard charge businesses a fee each time they perform a credit card transaction.

But Verizon offered several ways to avoid the charge, including setting up an automatic payment system that bills your credit card each month, paying by electronic check, and paying electronically from your bank's website.

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Image:  A Verizon Wireless store in Portland, Ore.  Credit: Don Ryan / Associated Press.

Amazon looking to release a smartphone next year, analyst says

Amazon.com Inc. may be putting a smartphone on the books.

The longtime bookseller and online retailer is broadening its business to include not just electronic reading devices and tablet computers like the just-released Kindle Fire, but also handheld smartphones, according to business intelligence gleaned by Mark Mahaney, an analyst at Citi.

Mahaney says he thinks Amazon will release a mid-priced smartphone by the fourth quarter of 2012 -- one that could cost less than $200 and that will be customized to work with Amazon's digital movies, music and e-books.

"We continue to believe Amazon has now set its eyes on the mobile (and tablet) media and product
consumption frontier," Mahaney wrote in a note to investors.

Mahaney said industry whispers indicated that Amazon would be working with Foxconn International Holdings, a subsidiary of the Taiwanese company Hon Hai Precision, a global leader in electronics manufacturing that makes other Amazon products as well as Apple's iPhone and iPad.

Further scuttlebutt from Mahaney on the specifications of the tablet:

We believe the smartphone will adopt Texas Instrument's OMAP 4 processor and is very likely to adopt [Qualcomm's] dual mode 6-series standalone baseband given [Qualcomm] has been a longtime baseband supplier for Amazon's e-reader.

If the rumors are true, the phone may also have an 8-megapixel camera, a 4-inch touch screen and an HSPA+ radio -- part of the newer generations of cellular technology that allows for faster data uploading and downloading.

"With the clear success of the Kindle e-reader over the past three years, and Kindle Fire possibly succeeding in the low-priced tablet market, we view this as the next logical step for Amazon," Mahaney wrote.

His note did not mention the type of software the phone might run, but in passing he cited a possible "OS royalty to Microsoft." Because of patents it owns, Microsoft collects royalties from many manufacturers of mobile devices running Google's Android operating system. The Kindle Fire is one such Android-based device.

Amazon did not immediately respond to a request for comment.

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Image: Photo illustration using images from Plenty.r / Flickr and andyi / Flickr

China's e-commerce market could top U.S.' by 2015, study finds

China's online shopping market could reach 2 trillion RMB, or $315 billion, by 2015, which would surpass the United States', according to research by Boston Consulting Group. 

The study found that within five years, most of today's online shoppers in China will spend about $940 a year, twice what they spend today and close to the average of $1,000 in the U.S., which is currently the world's largest e-commerce market.

BCG also said that Chinese shoppers are the most likely of the world's online consumers to check for product recommendations on social networking and review sites, and that online retail giant Taobao.com is the dominant e-commerce player in China. Last year, the site, which has more than 800 million online products, accounted for 79% of China's online transaction value, selling more than the country's top five physical retailers combined.

The surge in e-commerce spending in China is due in part to an increase in personal incomes and more familiarity with online retail sites. The trend is also benefiting from the limits of brick-and-mortar retailing in China: By 2015, 365 cities will have 100,000 or more middle- and affluent-class consumers, but China's largest retailers have stores in only about 260 cities today, BCG said.

The consulting firm's research included a survey of 4,000 online shoppers in China and looked at the differences between Chinese online shopping behavior versus that of developed markets. It also examined how e-commerce expansion will unfold in China and the biggest challenges companies from outside China face as they try to cash in on the rapid growth. 

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Japan's Rakuten to buy e-reader maker Kobo for $315 million

Canadian e-reader maker Kobo is being taken over by Rakuten, a Japanese online retailer, for $315 million.

The two companies announced the deal late Tuesday, with Rakuten (Japan's equivalent to Amazon.com) buying Kobo, which is now owned by Indigo Books & Music (Canada's equivalent to Barnes & Noble) and to a much lesser extent by Borders, the bankrupt chain of U.S. bookstores. 

Kobo said that Rakuten is "one of the world's top 3 e-commerce companies by revenue" and that the purchase deal will help the two companies grow both their e-reader and digital retail businesses by creating an ecosystem of downloadable media and devices for consumers.

"Kobo provides one of the world’s most communal eBook reading experiences with its innovative integration of social media, such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies, including Buy.com in the U.S., Tradoria in Germany, Rakuten Brazil, Rakuten Taiwan, Lekutian in China, TARAD in Thailand, and Rakuten Belanja Online in Indonesia, and of course, Rakuten Ichiba in Japan," Hiroshi Mikitani, Rakuten's CEO and chairman, said in a statement.

Kobo said it expected the sale to close in early 2012. The Toronto company said its new owner plans to keep the same management team and employees in place.

"From a business and cultural perspective this is a perfect match," Kobo CEO Michael Serbinis said in a statement. "We share a common vision of creating a content experience that is both global and social. Rakuten is already one of the world's largest e-commerce platforms, while Kobo is the most social eBook service on the market and one of the world's largest eBook stores with over 2.5 million titles."

The deal will also enable Kobo to "diversify quickly into other countries and e-commerce categories," Serbinis said.

Kobo's diversifying could help it compete more aggressively with Barnes & Noble's Nook line of e-readers and tablets and Amazon's Kindle devices. Amazon, unlike Barnes & Noble and Kobo, sells moves, music and apps and not just e-books.

This month, Kobo will release its Vox tablet, a gadget with a 7-inch display that runs Google's Android Gingerbread operating system and is being positioned as an alternative to the Nook Tablet and Kindle Fire.

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Image: Kobo Vox tablets. Credit: Kobo

Google Wallet opens for business, Visa gets on board

Google Inc. is taking another step toward making the credit card obsolete, firing up its digital payment service that will enable people to make purchases simply by waving their smartphones at the cash register.

The Google Wallet also got a boost by bringing in Visa, the world's largest credit card company.  MasterCard was already on board.  Both Visa and MasterCard have credit card terminals at hundreds of thousands of locations that will work with wireless purchasing.  Google said it was now working to include support for Visa, American Express and Discover accounts in future versions of the software.

But a caveat to the would-be wallet free: When Google's app comes out this week, hardly anyone is going to be able to use it.  The app, which will be released as a downloadable "over the air" update, is available only to Sprint wireless customers -- and of those, only owners of the Sprint Nexus S 4G smartphone.  Sprint was one of Google's original partners on the project, so the company's customers get first dibs on trying it out.

Smartphone commerce will really get kick-started next year when a whole raft of phones are expected to have the crucial technology that makes it possible.  That's near-field communication, or NFC, which we wrote about earlier this year.

The other problem is that NFC-enabled credit card terminals are still relatively rare -- though they are now deployed at hundreds of thousands of locations, credit card giants like Visa and MasterCard have tens of millions of locations worldwide. 

Still, the vast international payment infrastructure is not going to change overnight, and if nothing else, early adopters will be able to get some cocktail party mileage out of it. 

(At certain limited types of cocktail parties, that is.)

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Credit: MasterCard Worldwide chief emerging payments officer Ed McLaughlin talking about digital payments in May 2011. Credit: Mary Altaffer / AP.

'Back to the Future' Nike MAG to hit EBay, fight Parkinson's disease [Video]

The Nike MAG shoes worn by Marty McFly -- er, actor Michael J. Fox -- in the classic film "Back to the Future Part II" have long been an unattainable holy grail for sneaker-heads.

Now, finally, the MAGs have taken the leap from the silver screen into the real world. The self-lacing feature depicted in the 1989 movie is gone, but the MAG will get the movie version's LED-electroluminescent glowing Nike logos.

Most sneaker-heads, however, will never be able to get their hands on a pair.

Nike has produced a limited run of 1,500 pairs of the MAG. Each will be auctioned on EBay at nikemag.eBay.com, and all of the "net proceeds" will go to the Michael J. Fox Foundation to help fight Parkinson's disease, according to Nike. Fox was diagnosed with Parkinson's in 1991.

The auction kicks off at tonight at 8:30 p.m. and will end Sept. 18, with 150 pairs sold through EBay each day.

But the tech-related fundraising around the shoe doesn't end there.

Google co-founder Sergey Brin and his wife Anne Wojciki, who co-founded the DNA-testing company 23andMe, have agreed to match all donations to the Michael J. Fox Foundation -- up to $50 million -- through the end of 2012, according to the blog Nice Kicks.

Michael J. Fox is also set to appear on "Late Show with David Letterman" tonight to talk about the release of the Nike MAG and the fundraising for his foundation, Nice Kicks said.

In the film "Back to the Future Part II," Fox wears the shoes when his character, Marty McFly, travels to the year 2015. Hopefully we'll see a general release of the Nike MAG in four years, at lower prices than the EBay auction will conjure up.

What do you think about the Nike MAG and the fundraising? For sneaker geeks and lovers of the Back to the Future trilogy, does the shoe live up to the hype? Should Mattel follow Nike and produce Marty McFly's "Back to the Future Part II" hover board? Sound off in the comments.

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Images: The Nike MAG sneaker, inspired by the shoe of the same name from the 1989 movie "Back to the Future Part II." Credit: Nike

Google buys Zagat, a pioneer in restaurant ratings

Google Inc. has purchased Zagat, a publisher of widely used ratings of restaurants and other businesses.

"With Zagat, we gain a world-class team that has more experience in consumer based-surveys, recommendations and reviews than anyone else in the industry," said Marissa Mayer, a Google vice president responsible for the tech giant's efforts in local, maps and location services, in a blog post.

"Moving forward, Zagat will be a cornerstone of our local offering -- delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere to find extraordinary (and ordinary) experiences around the corner and around the world."

The move will help Google better rival competitors like Yelp, Yahoo and Bing in local search (finding a restaurant, store or other type of business nearby or when visiting another city).

Zagat has been in the local rankings biz for 32 years, long before Google, Yahoo or Yelp, and "their surveys may be one of the earliest forms of UGC (user-generated content) -- gathering restaurant recommendations from friends, computing and distributing ratings before the Internet as we know it today even existed," Mayer said. "Their iconic pocket-sized guides with paragraphs summarizing and 'snippeting' sentiment were 'mobile' before 'mobile' involved electronics."

Founded by husband and wife Tim and Nina Zagat, the company has grown to become a trusted brand with "Zagat rated" stickers popping up on many restaurant windows and paperback Zagat Guides regularly becoming hot sellers in many major cities.

"After spending time with Google senior management discussing our mutual goals, we know they share our belief in user-generated content and our commitment to accuracy and fairness in providing users with the information needed to make smart decisions about where to eat, shop and travel," Tim and Nina Zagat said in a statement.

"We believe this union is the right next step for our employees, our users and for our business, all of which will benefit from the additional resources and reach that Google provides."

The Zagats said would become Google employees while remaining co-chairs of the Zagat business.

The companies didn't disclose a deal price. In 2008, Zagat's founders unsuccessfully sought to sell company for $200 million. In 2009, Google tried but failed to buy Yelp.

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Image: A screen shot of Zagat.com's home page, showing an ostensible review of Google, after the announcement of Google's purchase of Zagat. Credit: Zagat.com

Amazon.com testing new website design

Amazon.com, the world's largest online retailer, is testing a new website design.

The new look is a pretty big shift away from the blue-and-white, image-heavy look that Amazon has used for years. The royal-blue bar across the top and the light-blue "all departments" menu box running down the left of Amazon.com are gone in the new design, which goes with a much more airy, white navigation bar up top and a larger search box.

The "all departments" menu is now collapsible, activated by a button to the left of the search box, leading to a cleaner and less cluttered look.

The redesign was first reported by the website TechCrunch, though Amazon later confirmed that it's testing the new layout to the Wall Street Journal.

From images posted to Skitch.com, TechCrunch and Cnet, it looks as though Amazon will be displaying fewer suggested items on its homepage in the new design. With fewer products popping up to catch a consumer's eye, it will be interesting to see whether Amazon relies more on its system of suggesting products to consumers based on what they've purchased before, or whether it ends up listing its overall top-selling goods.

One reason behind the new site design, according to the Wall Street Journal, is to make Amazon.com easier to navigate and use for those shopping on a tablet computer, rather than on a laptop or desktop.

An Amazon tablet has long been rumored as in the works to compete with Apple's iPad, and the online retailer recently released an HTML5 website called the Amazon Kindle Cloud Reader that mimics the native Kindle app built for Apple's iPad.

The redesign also marks a shift toward Amazon giving its own digital products more prominence over products from other companies, the Journal's report said.

"The new site emphasizes Amazon's digital goods over its physical ones," the Journal reported. "On the old site, a column of buttons leads users to both electronic content and physical goods, such as toys, clothing and sporting gear. On the new site, a single row of buttons advertises only digital books, music, video and software."

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Image: A screen shot of Amazon.com's new website design, currently being tested out with consumers. Credit: Stuart Lawder via Skitch.com