Zoosh wants to be more than just payments, Zoosh wants to be a verb

We thought we had Zoosh pegged in our last post about Naratte. Turns out, although accurate, our last post didn’t even hit the tip of the iceberg of the capabilities Zoosh has. We interviewed both Bret Paulson and Byron Alsberg and came away with our heads spinning with potential ideas and a few more facts that weren’t in the public domain before. Ready to learn more about Naratte and Zoosh? Good let’s get on with it…

Everything you need to know about Zoosh transactions

If you read the press release from Naratte this last week you may have been impressed or you may have been confused, but one thing we know for sure is there were questions unanswered. That’s mainly because press releases are not really the realm of a lot of technical data, and they certainly don’t try to break down data enough for us everyday folk to consume and comprehend. Let’s start with the big issue that any technology that deals with financial transactions has to get past – security. Strange as it seems, technically being safe is not enough for a new technology to be accepted; it has to be viewed as safe in the hearts and minds of the consumer to work and gain acceptance. This is a challenge Zoosh, like NFC, faces.

We had a niggling concern when we wrote our last post about how secure Naratte’s Zoosh is, but not anymore

The first point we need to convey is that your data is not stored on the phone. We repeat your data is not stored on the phone when you use any Zoosh app, on any platform. Byron Alsberg, the company‘s CTO, educated us on Naratte’s approach and it makes a lot of sense. The security is token based, which means you are given a cryptographic token (a code) by your credit card company that represents your account on your phone linked with your pin number. If anything changes within that configuration, a flag as big as a stars and stripes on a used car lot goes up immediately. This token is useless to anyone who isn’t you, as to change the configuration requires personal knowledge you set up with your card provider. If you want to learn more about token based security, check out Wikipedia’s page on the subject.

We bet the next question that enters your mind is: What if someone gets hold of my phone? Can they spend my money? The answer is yes. Well, yes if they can get past your app pin, yes if they try to purchase something large and know your card pin and yes if they are not unlucky and the POS terminal they are trying to purchase at doesn’t randomly require your pin, as they do. Technically that is safer than cash and a normal credit card and security doesn’t stop there. We asked about how the company secures transactions web-side, because if you have been watching the news for the last few weeks you would have seen high profile websites being compromised left, right and center.

Again Naratte takes a practical approach. They do secure the transmission with an encoded algorithm. They do also have security through their cloud based portion of the trip your transaction takes and they won’t discuss it at all, as keeping it secret keeps it more secure. However, this is not the main point Naratte wants to make about web-side security. The main point is that Zoosh technology just acts as a bridge for your credit card company‘s software to speak with your phone’s software. The security that counts is your credit card provider’s, and if you buy online and have come to trust SSL transactions that work through a merchant and your financial company, you should feel comfortable using Zoosh. Your account details are not kept in their databases and in fact only your transaction data is stored – what you bought, where you bought it and how much you paid only ever gets transmitted. Everything else is handled by the token which acts like a complex username that verifies details about the conditions of the transactions before it grants funds anyway – right phone, right phone serial number, right software, right transaction ID, right pin number if required, right token and any number of permeations of all or different checks your credit card company undertakes before issuing funds.

Ok, so we have covered what happens if someone gets hold of your phone and the security that is in place web-side and it all checks out. But what about the skimmers you hear of that could potentially stand behind you in line and have a piece of equipment that captures your details? Zoosh uses unique perishable transaction ID’s for every purchase you make. What that means is every transaction you make with your Zoosh-enabled phone sends out an encoded signal that has a one time use. Once spent, which happens after a transaction is completed, it is about as much use as second hand toilet paper. So, skimmers listen all you want – if you have the technology to decode the ultrasonic transaction and spend the hours that it would take, you will then be the proud owner of some garbage static noise that your dog can hear.

Could Zoosh still be hacked? Yes, anything than can be made by people can be deconstructed and hacked by other people. But that isn’t the point of security. Security is put in place to ensure it is sufficiently difficult to overcome security obstacles to ensure it is not worth the effort. There are people out there that could break into your home, there are people out there that could break into your car, but that doesn’t stop you living in a house or using and buying a car. You simply buy the best security you can and feel secure in the fact that the rewards involved in defeating those security features are so difficult and risky that practically no one would ever bother. By that standard Zoosh is safe as houses.

How does Zoosh work for retailers and merchants?

In the Naratte press release it was suggested that a POS terminal could be upgraded to accept Zoosh payments for as little as $30. How this actually happened was a bit of a mystery, so we investigated a little further for our retailing readers who want to know a little more about this. Bret Paulson said, “In fact it could cost as little as $4,” and explained that most POS systems have an audio input that would accept a mic. That mic, which is likely to be a 3.5mm jack and a mic that would work with the Zoosh system, could cost as little as $4. Of course, the better mic you get, the better the results and that is why the company initially reported a $30 equipment cost. After that, all a merchant would need is a Zoosh update to their POS system from their provider and customers can get Zooshing to pay for goods and services. Narrate is currently working with the larger POS terminal providers to get the Zoosh software available to merchants, so ask your POS terminal provider how you could get setup. This certainly gives Zoosh a low barrier of entry and allows merchants to be able to setup and accept Zoosh payments cost effectively. But don’t expect your POS terminal provider to be quite as enthusiastic, as they want to sell you an expensive new NFC system, and at the end of the day you will probably need one of those also. But for now there is Zoosh.

Zoosh SDK and API

The first thing we noticed on visiting the Naratte website was that there was nary a word about the SDK’s and API’s that had been marketed in the company’s press release. Byron Alsberg explained, “We under estimated the power of response for the SDK.”  The company reported that it had received so many inquiries that it had been caught off guard. However, the team said it is committed to contacting each person or company that inquired about developing on the Zoosh platform. If you have a development you want to discuss with Naratte regarding its Zoosh platform, simply swing past the website and send them an email from the contact form at the top of the page (we recommend you type it out in Notepad as the form is kinda small). For Naratte, they said by speaking with developers and companies who wanted to use Zoosh, it gave them a peek into how their technology will be used. In some cases, they admitted it went beyond how they had imagined Zoosh could be used. Currently, the SDK and API is by private invite only, but as mentioned above you can get on the list by sending the Naratte team an email and then discussing your plans with them. For now, iOS and Android are supported and in the future they will be rolling out additional Zoosh SDK support. There is no Blackberry or WP7 support at this time.

No Zoosh self booting apps

We found during the interview we couldn’t help speaking about NFC with the company due in part to the similarities between the two technologies. One such comparison we asked about was NFC’s ability to self boot an app when passed over an NFC tag or payment POS terminal. We asked whether Zoosh would also support that feature, and the answer for the time being is no. The company has put thought into this aspect of the user experience and came to the conclusion that consumers would not just have one single mobile wallet, so the app would need to be booted anyway. We agree that most people will not just have, let’s say Google Wallet for sake of argument, they will probably have their white label target app and a host of others which will be tied with rewards and coupons. Multiple apps that basically have the same function can’t all be the default application for one type of NFC call, so apps will still need to be booted outside of your default mobile wallet. Still, it would have been nice if Zoosh did boot up on its own when needed.

NFC tags are an exciting part of the whole NFC experience, so we asked if Zoosh would have a similar capability

Smartposters and NFC tags are the future of marketing. It allows marketers to build virtual experiences, deals and coupons into objects consumers interact with in everyday life. Whether that be a print magazine, a flyer or an actual poster, NFC passive tags are adding a new dimension to experiential marketing. We wondered how Zoosh could blend its technology and fit in with this concept and the short answer is it won’t. However, that doesn’t mean that it won’t ever be something the company investigates, Byron Alsberg told NFC Rumors. He explained that the ultrasonic technology that Zoosh uses requires a power source, not a big power source, but a power source nonetheless. He said that in his past he had powered circuitry from a grape which he would do for demonstrations. He added that the company would be looking into ways to create tags that would work well with Zoosh but at this time it isn’t a top priority. Those developments would likely come in the form of low cost beacons to power ultrasonic tags, but that is a way off. We discovered it doesn’t really matter anyway, but more on that in a bit.

The Zoosh misconception

Ah people – they think you are just one thing and then you have to spend a lot of time and money to convince them you are more. That is true of you in your job with your boss and you with your mother-in-law, you know how it is. Well, the Zoosh technology appears to be suffering from a similar fate. Based on the video posted and the press release, people think Zoosh is just a contactless payment method when it is so much more. Except for perhaps passive tags and self booting apps, Zoosh has the same capabilities as NFC. In fact, it has more and can change its own transmission distance based on the activity it is performing or as the company puts it – “supports short range broadcasting with a controllable range.”

It can be used as a pass off to Bluetooth technology, can connect your routers and speakers and can even unlock your home with the right developments and software to match. It can secure your computer and add authentication via your cell phone and potentially unlock your car. Zoosh’s ability to mutate its transmission distance and a speedier data transmission gives Zoosh an edge over NFC in few, but important ways. The next big thing beyond NFC is home automation, which involves controlling air conditioning and environmental controls in your home, and green chip technology which gives consumers the information and power to live more efficiently and to drop their power bills. Although the Naratte team never spoke about this particular use, we see the Zoosh platform and standards being perfect for such applications. In fact, we are going out on a limb here and are going to say Zoosh is the bridge between NFC and ZigBee. It has similar capabilities to both technologies and that has value in the wonderful world of contactless convergence.

Zoosh support NFC in the future?

In learning about Zoosh, it was inevitable that we would compare it to NFC as we are sure that you will and have. NFC represents the 100 pound gorilla of standards that has the support of so many companies and has so many possibilities to impact culture and the way in which we practice commerce. We went into the interview with Naratte feeling that this was a technology with a limited life span, however, they changed our minds on its impact and possibilities. The NFC Rumors team are not new to technology and have sat down with many entrepreneurs that have stated they have the latest and greatest thing that everybody is going to love so consider ourselves somewhat jaded. Yet on speaking with  Bret Paulson and Byron Alsberg, we found a business model that could work. We think it may be an uphill battle but their standards and model work ,and we will tell you why.

In their words: “We have no delusions of grandeur, we are not an NFC killer.” And Zoosh is not. What Zoosh has is a symbiotic relationship with NFC; where Zoosh has strengths in areas NFC does not and vice versa. NFC Rumors asked how Naratte felt about aligning their standard with NFC in the future and we were encouraged by their stand on the matter. Naratte sees Zoosh merging with the NFC ecosystem, giving consumers different payment options and the ability to interact with different technologies. That doesn’t mean the company will dump its ultrasonic technology when NFC reaches critical mass, but it does mean this approach alone justifies Zoosh’s existence beyond the advantage Zoosh has in being available at a lower cost of entry right now. A Zoosh app in the future may not handle both standards but could happily co-exist with NFC without making a push for dominance. That’s good because the NFC bus has already left and those not on the bus will be under it. Zoosh has its own bus and is planning on riding alongside NFC all the way; and some larger companies are looking at Zoosh and questioning whether they have more space and opportunity on their bus.

Zoosh partnerships announcements to come

The old sales adage is ask for the business and we wasted no time asking. We asked Naratte who they were working with and who would they be announcing notable partnerships with. The company representatives were tight lipped and explained they only worked under strict NDA’s (non-disclosure agreements). They did let us know they had some big announcements coming, but couldn’t comment at this time and that is fair enough. If you have seen the press release you will have seen the likes of PayPal, Texas Instruments and Vodafone speaking Zoosh up and we doubt that would happen unless those companies intended to work with Naratte. As soon as there are announcements we will bring them to you.

Zoosh is a B2B company

Zoosh do not set up individual merchants and they do not deal with the general public for help with apps. Their model instead is a business to business one, where they empower other developers and companies to use their technology in their products and services. If you need a different descriptor, Zoosh is a white label provider. In the coming months it is possible you could use their backbone and not even know it. Their payments systems will appear to be very similar to NFC, as will their offers and couponing systems. In fact, if you have used a SparkBase loyalty “PayCloud” app, you may have already used Zoosh. SparkBase won the 2011 ETA Technology Innovation award for a Zoosh-enabled loyalty app.

About Naratte, the makers of Zoosh

The company is a 12 strong team who have backgrounds in RFID and semiconductors with companies like Apple, RIM, Palm, Texas Instruments and Qualcomm. They received $5 million in Series A funding from a strategic investor who keeps the wolves from the door while they are setting up shop and have 8 patents filed. The only clue the company gives to who they are working with is that they have partnerships in process with carriers, gift and loyalty programs, merchants, coupon companies and credit card companies. That’s a broad scope of industries, so we were not surprised when the company told us they have some big announcements to come.

Zoosh has growing pains, great problem to have

Naratte let us know they have been operating in stealth for the past year or so, and it was only last week that they come out of the ultrasonic closet to let the world know they exist. They had already been forging partnerships and getting their technology in the hands of the people who count but had made no official announcement. Since they have announced their existence they have been bombarded by the press and developers that want to work with them and the team is a little snowed under with requests. However, after speaking with Bret Paulson and Byron Alsberg we got the impression that they had everything under control and were viewing the awesome interest in their product and service pragmatically. If you are going to have problems with a startup company, being inundated are the best type to have. It’s not surprising as the company really does have an innovative product that both fills the gap between now and NFC taking off and then has its own groove after that point.

Zoosh summary

Simply put, Naratte is a company with a big future. Zoosh has its uphill battle and has a couple of areas where it is out classed by the NFC standard. To work, the company needs to define clear standards for Zoosh and have a better SDK program for developers and create a better outside brand experience for people visiting their website that really describes the true potential of their products and services and the possibilities it affords. We are going to give them a break on that one as it is their first week and the quality of their video was second to none. We could have imagined Jonny Ive doing a guest appearance telling us how he designed out the product if we didn’t know it wasn’t that Californian company that produced the video.

We foresee the difficulty that Zoosh faces is more to do with education than it is with the capabilities of their algorithms or standards. Security is as tight as it needs to be for now, but as with all security including Google Wallet, Zoosh can never afford to rest on its laurels. To us, the C level executives seemed capable and knowledgeable and more importantly excited about their products. We could hear their belief in what they had made, and that enthusiasm will take them far. Payments is only the start for Zoosh and multi-file transfer, social capabilities and proximity based payments are close to being reality. What Naratte needs is a base of great developers to take up the mantle of a really capable technology and show the world what Zoosh can be. The founders see Zoosh as a contactless interactions technology that not only does payments and transactions, but one that provides immersive experiences.

We remain impressed with both Naratte and Zoosh, and can’t wait to see what they and the iOS and Android developers do with it. Zoosh wants to be more than a name, it wants to be a verb, just Google it if you don’t know what happens when a name becomes a verb. Then just Zoosh us with what you find.