Mobile payments systems

http://www.theaustralian.com.au/business/small-business/mobile-payments-taking-off/story-e6frg9hf-1225954637652

Mobile payments taking off
BY: SHOW ME THE MONEY: ED CHARLES From: The Australian November 26, 2010 12:00AM
Increase Text Size
Decrease Text Size
Print
Email
Share

WITH the arrival of the iPhone and smartphones in Australia in mid-2008, 2009 was the year mobile internet browsing took off.

Now PayPal reports that this year mobile payments took off in Australia, opening the battlelines between payment systems, some that use SMS and others smartphone apps.

PayPal's figures indicate a twelvefold increase in mobile payments from $2.7 million last year to $35m this year. And the mobile commerce market is estimated to reach $26.9bn in value by 2013 according to research by PayPal, Forrester Research and the Leading Edge.

PayPal is one of the payment solution success stories, having reached critical mass as a viable business through online commerce. It is making inroads into the mobile and micro-payments sector, having opened up its technology for software developers to create payment systems and apps to order research, and order and pay for goods by phone.


Related Coverage
Opening your virtual wallet
Perth Now, 24 Sep 2011
EBay profit falls on charges
Perth Now, 21 Jul 2011
Smartphone pay systems on hold
The Australian, 5 Jul 2011
Calls to secure cyber wallets
Courier Mail, 7 Jun 2011
Google to fight mobile 'wallet' lawsuit
Adelaide Now, 28 May 2011

For example, Melbourne-based event booking and ticketing system Eventarc.com uses PayPal and the Event Cinemas app allows users to browse film session times on a smartphone and buy tickets using PayPal.

Companies can send invoices for PayPal payment via SMS.

Later this year PayPal is launching internationally its answer to the Apple store in allowing simple two-click micro-payments using PayPal's Express Checkout while browsing the web.

"We want to make it as easy as putting 20c in the slot," PayPal spokesman Adrian Christie says. He says the secret to a successful mobile payment solution is the ability to make a payment with a simple password, rather than having to type in a 16-digit credit card number on a tiny keyboard.

There is also a raft of emerging companies worldwide, and in Australia, looking to develop the mobile platform. Canberra-based mHITs has developed a simple platform for micro-payments that can be made from any mobile phone that can send an SMS.

At its most simple, an mHITs account holder can make payments via SMS for free to any individual in Australia, the system establishing a free account for whoever receives the payment for no cost. An account holder can text a cafe to order and pay for a coffee. The cost is 3.5 per cent of the transaction, or a minimum of 25c.

"It's like PayPal through SMS," mHITs chief executive Harold Dimpel says. "The advantage is that you can use any phone. You don't need a smartphone and you don't need an app."

Dimpel says SMS payment is proving popular with drive-through coffee shops, where business throughput is capped by the queues caused by payment delays.

The latest drive-through to sign-up is Ticos Coffee shop on the Geelong Road in Brooklyn, Victoria, where drivers can text orders -- from stationary vehicles -- straight to the cash register.

"Coffee [shops] are a really good example because they have long queues," Dimpel says.

"Anywhere where there is queuing we can provide a benefit. It helps reduce queues."

At present, mHITs is conducting a trial of its Q-Jumper payments system, which allows consumers to order from a set menu and automatically works out the price, with a trial running at Subway in Rouse Hill, Sydney.

Another company sidestepping, as well as embracing, the smartphone is QPay, which provides the payment engine and is seeking partners for its technology in Australia. The QPay system allows account holders to purchase online, or through the mobile web, without having to enter credit card details or repeat any data.

Instead, users set up an account and then simply enter a mobile phone number. They are then called and asked to verify the purchase whether the purchase is online or on a mobile phone.

"Most importantly, you don't have to enter a credit card number," QPay chairman Greg Walter says. "You can't do what you can do online on a mobile phone. We set out to develop a system that takes out the keystrokes," he says.

There are other payment systems emerging. In the US, Twitter founder Jack Dorsey is launching Square, a smartphone app that accepts card payments; it is not yet available here.

In April ANZ announced plans to launch an EFTPOS and mobile phone-based system to accept credit card payments for businesses, although its release has been delayed.

The eWay and SecurePay online payment gateways also have launched a free app that allows payments to be taken on an iPhone.

Other independent card acceptance apps are finding the going tough to reach critical mass. ICCPay, which costs $43.99 through the Apple app store, was launched in January and has sold 125 apps to date.

PHONE-Y MONEY

Chipped phones

Visa and National Australia Bank have trialled contactless mobile phones, which contain a special payment chip, as an alternative to card payments.

Nokia backs a system called Obopay, which allows payments to be made by mobile phone but doesn't require a special chip.

Smartphone apps

Most payment electronic gateways have apps developed for smartphones such as the iPhone to receive payments. ANZ has announced that it will release one, and inevitably the other banks will follow. Squared from the US is a system that allows smartphones to swipe cards and receive payments; it is backed by Twitter founder Jack Dorsey.

There are apps that allow smartphone users to buy good and services. For instance, Plastic Fork is an app that allows takeaways to be ordered and paid for from about 300 restaurants across Australia without the repeated entry of credit card numbers.

SMS

Canberra-based mHITs offers a peer-to-peer payment service that allows micropayments by SMS from any mobile phone. It also offers a service that allows people to order and pay for meals by phone.

Paypal

PayPal has opened itself to developers to create their own apps and portals for payment solutions using its systems. Blingnation.com in the US and eventarc.com, which was developed in Melbourne, are examples.

Has a smartphone app that allows users to make payments and exchange money by bumping (that is, simultaneously shaking iPhones.

Plans to launch a contextual micropayments system, which will allow users to click on links in content and purchase music, games and other content.

QPay

Qpay works across the mobile and regular web. Account holders simply enter their mobile phone number to purchase and a transaction is verified by a call to the mobile in question.