Mobile Entertainment

In the first ever issue of ME we ran an interview with Simpay, the company that was going to transform UK mobile payments with a single, cross-operator WAP billing platform. It died soon after – and so apparently did its one platform dream. But here we are, three years later, about to celebrate the first anniversary of just such a scheme. But should the industry really celebrate Payforit? How successful has it been?

Payforit was introduced to supplant premium SMS as the dominant payment mechanism for mobile. It powers purchases of products costing less than £10 on mobile portals, across any network. The user simply clicks on the Payforit button and is taken to a landing page powered by one of the scheme’s ‘Accredited Payment Intermediaries’. It can also support web transactions.

An early indication of its performance came in March when the trade body AIME revealed that 63 per cent of content providers supported the scheme and wanted to embrace it. It also showed that consumer complaints were down. Less encouragingly, it reported dissatisfaction with the user experience, and a lack of consumer awareness.

Four months on, it’s clear that some progress has been made. But it’s an on-going process. Roy Ellyatt, CEO at AIME, says: “The early stages were not user friendly and were more of a barrier than an encouragement. This has been now been acknowledged and the number of screens and clicks required to conduct a transaction is reducing.”

Indeed, last month Dialogue Communications introduced the market’s first ‘single click’ Payforit option. Guiom Peersman, Dialogue's MD, is delighted: “Single click purchases are widely available on the web, on sites such as Amazon and iTunes, so there is no reason why mobile internet services should be any different,” he said.

This is encouraging. But Payforit is far from perfect. There are still inconsistencies between each network on price points, how users are billed, refunding capabilities and so on. And the ‘brand’ remains unfamiliar to consumers.

Michael Tomlins, commercial director at Infomedia – which manages mobile internet services for Tesco and others – says: “Payforit should have been promoted as a trusted payment method. But it hasn’t been promoted to the customer at all. Thus trusted brands like Liverpool Football Club send their customers to the unknown brand of Payforit, and it actually causes distrust. The theory of Payforit is perfect; the implementation still requires work.”

Despite this the momentum behind WAP billing is growing – not just in the UK, but all over the world. Ericsson IPX, one of the pioneers of mobile billing, has rolled it out in 16 countries since its first contract in Sweden in 2002.  Meanwhile, Netsize has launched WAP billing in the UK, Norway, Sweden, Belgium, Germany, France, Spain, Portugal, Italy and Finland allowing merchants to bill a potential 250 million consumers. It describes Payforit is as an ‘in between’ model, lagging Gallery (France), Dimo (Portugal) and PlazZza (Belgium) because all of these go beyond mere billing to establish WAP ‘malls’ that permit a more consistent experience.

The proliferation of WAP billing is also helping aggregators to offer their customers a single platform through which to reach the world. In February mBlox did just this, launching a global payments platform (powered by Valista) with a uniform global interface, MSISDN aliasing for tracking repeat visitors and cross-carrier adult verification.

So where does all this momentum leave premium SMS? Well, not as dead as you’d think, the consensus being that it remains good for interactivity if not billing. Rob Weisz, director of media and B2B services at MIG, says: “PSMS and WAP Billing are two very separate entities. SMS is currently the accepted means of interactivity for services such as competitions, polls, votes, comment lines, alerts, micro billing services, chat and dating – and will continue to be so.”

Meanwhile, Peter Garside, director of Ericsson IPX UK & Ireland, says: “Premium SMS is still growing at a good rate. There are applications like football alerts and single purchase mobile content advertised that do not need WAP.”

Even for WAP billing pioneers like Netsize the market remains buoyant. George Yazura, strategic marketing manager at the company, reports that PSMS is growing by up to 20 per cent a year, depending on the region.

Even though PSMS still has its place, it’s too inflexible to support some of the new ideas, such as event billing, that are enlivening the content space. Evanna Kearins, marketing director of Valista, gives an example. “Take in-game charging where you give the game away for free but charge for tools used to play, like ammunition. PSMS can’t work here because you have to send and receive messages for the charge to happen. A more collaborative payment mechanism is needed.”

Interesting how this discussion of m-payments rarely extends to ‘real world’ behemoths such as credit cards and PayPal. Although each has designs on mobile, it’s fair to say that neither has made any significant progress. Needless to say, it all comes down to the user experience rather than trade resistance.

Lee McElhinney, marketing manager at Tanla Mobile, says: “You can’t take something that works on the fixed internet and transfer it onto mobile internet just like that. The actual process needs to be thought through, with the end-user experience put at the forefront.” Rob Weisz agrees: “To be able to simply ‘click and buy’ a product via WAP rather than needing to register credit cards or put in pin codes is a no brainer. Consumers invariably chose the simplest billing method.”

But this is not to write them off. There are, after all, consumers who want to buy big ticket items on mobile that cannot be bought with SMS or Payforit. This is why Bango services, for example, ‘fail over’ to credit card if either the user cannot pay on bill or the product is not authorised for on-bill payment. The UI requires the card details to be entered the first time the subscriber buys something, but after that it can be one-click.

Anil Malhotra, Bango’s VP of marketing and alliances, believes credit cards et al have potential if UI problems can be overcome. “If they are to take off, the design needs to be re-thought. Then, some form of commercial deal with the network operators to support such an alternative billing arrangement would make a lot of sense,” he says.

Perhaps NFC (Near Field Communications) is one answer. This ‘touch in’ system turns the phone into an e-wallet, and it’s been very successful in Japan under the Felica brand. Earlier this year, UK operator O2 launched a pilot with Nokia and Barclaycard to enable users to pay for purchases by touching the phone to a reader. Obviously the technology applies to ‘real world’ items, but it’s possible that content firms could sell digital products using NFC readers.

But if the content biz remains open to credit cards, it doesn’t seem as if the online merchants that rely on Visa, etc are too interested in Payforit. Simply, the rev share makes it prohibitive.

James Patmore, VP of ads in EMEA for Amdocs says: “The differential from mechanisms such as credit card is still so high that Payforit can’t attempt to enter new payment verticals other than the existing space dominated by PSMS.”