Mobile telecoms firm Vodafone plans to offer customers the ability
to use their mobile phones as a type of mobile credit card for
making small purchases online.
From March, UK users will be able to use the m-pay bill service to
buy items priced from £0.05 to £5 over the Internet or using a WAP
phone. The service will charge the purchases to users' phone bills
or deduct the charges from their prepaid accounts.
Vodafone contracted third-party software company iPin to develop
the mobile-payment system and will use the company's e-Payment
platform.
Payment is authorised by a user name and password for Internet
purchases and a personal identification number for WAP purchases.
When users make purchases on the Internet, they do not need to have
their mobile phones with them, Vodafone said.
Vodafone competitor, British Telecommunications announced last
month that it is working with iPin to develop its own eWallet for
its BTopenworld Internet customers.
Vodafone also announced in January that it had begun trials of a
global payment platform, or m-wallet service, over mobile devices
in Germany and Italy as well as in the UK. The m-pay service is a
"totally separate service from m-wallet" and Vodafone has no plans
to offer the m-pay service outside the UK in the near future,
Vodafone's Janine Young said.
Items and services that can be bought using the m-pay service
include mobile-phone ring tones and icons, entertainment and
financial information, online games, location services, music,
news, sports information, ticket bookings, travel information and
reservations and weather information, Vodafone said.
Vodafone has already signed up 50 companies to offer services and
products through m-pay, including individual Web sites like iStrat,
Young said. For example, through iStrat, Arsenal Football Club will
let fans watch video clips of goals and match highlights over its
Web site.
"Many customers are used to charging things like ring tones over
SMS but SMS is limited on what you can charge. M-pay offers
complete flexibility - for example you can buy both a ring tone and
a music file coupled together," Young said.
Vodafone is aiming the service at customers who either don't have
credit cards or who do not like using their credit cards for making
small purchases, Young said. "We have no plans in the immediate
future for offering products like CDs or books over m-pay, because
quite frankly, credit cards are more suited for making those larger
types of purchases and customers feel more comfortable using their
credit cards in those cases," Young said.
When Vodafone launches its m-pay service in March it will have
competition from Paybox.net, which began in Germany in May 2000 and
is now operational in the UK, Austria, Spain and Sweden. In the UK,
Paybox charges £14.99 per year for the service.
According to Paybox's Web site, it has 500,000 registered users and
6,500 merchants across Europe and has the advantage of not being
tied to a particular network. One of its merchants is the Circus
Restaurant and Bar in London.
All transactions are conducted over a secure GSM network so only a
mobile-phone number is entered onto the Web when shopping online,
the company said.
When Paybox members use their mobiles to pay for a product or
service online or offline, they are contacted with an SMS message.
Users then reply to the message with a PIN, which authorises the
transaction, and the amount is debited from their bank accounts,
Paybox said.