I’m seeing more and more mobile payments systems getting used in actual products. Stuff like Zong, Paymo and Mobillcash. Surprisingly enough, the places I’m hearing about systems like this being used are in social games (for example social applications using Offerpal) instead of in mobile applications. One of the criticisms leveled at mobile advertising pretty frequently is that it doesn’t make much sense to have an advertising system built somewhere that commerce isn’t flowing. Why advertise on mobile phones if few people are buying through mobile phones?
I still hear pretty regularly that trying to deliver a paid application globally on mobile phones (note, I’m talking about systems outside of the app store models that have cropped up recently, they’re definitely an exception to just about everything) is at best a pain. Often it involves enough cost, revenue share, and engineering that the economics frequently don’t work out. So you’re stuck going through an existing channel even if you would technically have a route directly to consumers. I was expecting that to eventually get sorted out, that someone would crack the global mobile payments problem, allow unbanked users to pay using premium SMS, and deliver the platform in a package that developers could integrate without having to bend over backwards. And that has happened. But the unexpected part is that the uptake seems to be on the wired web, as an alternative payment form alongside credit cards. I was expecting the evolution to be that the systems would be used to back transactions originated on the mobile first, and then eventually start creeping onto the web as well.
For anyone who hasn’t poked around with the systems yet, the flow goes something like this when I pay with a mobile payments system on the web:
- I decide to purchase a weeks supply of heroin for my virtual junkie for $5 in real world money (my virtual junkie is trying to make it to Rock Star status, adding heroin is the fastest way)
- When asked how I want to pay I select “by mobile phone” and enter in my phone number
- I get an SMS saying “Do you want to pay Virtual Junkie $5? Reply with Y to pay”
- I send an SMS response, replying with Y
- I get a confirmation back saying that I’ve paid the $5
- My junkie gets his fix in the game. No more bugs crawling under his skin, excellent, everyone is happy
Actually a pretty nice system compared to paying by credit card. With most credit card systems I have a bunch of info to enter in, if I even have the card I want to use on me. And for folks who don’t have credit cards, like those using prepaid accounts where they charge up with cash each month (or kids who have their parents paying their phone bill), it opens them up to online purchases. Cool, nice, makes sense, I’m happy it happened, lots of good going on there.
So why didn’t this end up opening up mobile commerce more? Or did it, and I’m just not hearing about it? Why does Zong list all online properties and no mobile-specific properties in their list of partners? Did the new commerce line just follow the existing line of purchases? Are folks still hesitant to kick off a transaction from a phone, whereas they just “trust” the web more? They’re paying with their phone, so it’s not an aversion to using the mobile itself as a payment mechanism. But maybe an aversion to starting the transaction on the mobile. Or is it a technical/user experience glitch? Does punching out to reply to an SMS often kill the interaction going on in the mobile browser? Leading to a large dropoff or user disappointment when they can’t find their way back to their purchase? Or is it simply that social and online services are performing so much better than mobile services that the incremental gain of opening up unbanked transactions for existing online purchases way outweighs the benefits of opening up commerce completely tied to the mobile?
I’m pretty sure this is indicative of an opportunity of some kind. For instance, Apple is supposedly adding in-application payments options so that users can pay for goods or service updates within an app after purchase. So there’s probably a decent amount of demand for a system of the kind. I would assume that existing developers could probably use something like Zong or Paymo with some pretty minimal infrastructure to provide a system of their own to get in-app payments working today. We’ll have to see how granular Apple gets with their payment system, and what the terms end up being. Having a bunch of options popping up at the same time should lead to a nice healthy market. And help to keep the Apple based system in check should they start using their position as channel controller to try to squeeze developers. Ð¿Ð¾Ñ€Ð½Ð¾ Ñ„Ð¾Ñ‚Ð¾ ÑÐºÐ°Ñ‡Ð°Ñ‚ÑŒ