Putting money where your mouth is

24 Dec 2003

There have been some successful applications of m-payments in the area of mobile parking, ringtones and logos but market research company Datamonitor points to “a lack of common standards and a driving ambition for all relevant parties to get the greatest share of the m-payments pie” as the reasons why m-payments have failed to live up to expectations in Europe.

As mobile phone penetration nears saturation point, mobile operators desperately need to find a way to make m-payments succeed in 2004 if they are to capture the global mobile payments market which is forecast to grow from over €5bn in 2002 to €55bn in 2006.

One of the success stories of m-payments in Ireland has been mPark. Launched in January 2003, mPark was the first system in Ireland that enabled payment for parking in central Dublin to be made over a mobile. The idea is simple – users register with O2, Vodafone or mPark, call the mPark number with their mobile, are prompted for the unique ID number of the parking machine, MPark alerts the machine that a payment has been processed and the user simply selects how much time is to be paid on the parking machine, which prints a parking ticket. Payments can be charged to a mobile phone bill or to a credit card.

While mPark has been a success it seems mobile phone networks are hesitant to commit to further investment in this area and would rather wait and see what opportunities arise. Niall Gorman, business solution team O2 Ireland, says that it will take “a major commitment to broaden our services beyond airtime, we want to ensure that we create the right reputation in this new area”. Although Gorman also said that O2 did have a number of smaller initiatives planned for the area of m-payments in the near future.

If the likes of O2 and Vodafone are to move forward with m-payments it will probably be on the back of work already done in this area. Richard Walsh, senior product manager m-payments at Vodafone, says they want to build on this success of mPark with similar projects. “We would see Vodafone’s role as providing the platform so people can come along and say they want a billing relationship and billing mechanism and, in effect, we will act as the third party to a provider.”

The phone technology companies, themselves, have not been left out in the cold in the area of mpayments. Nokia has collaborated with Visa on a wallet application that enables users to store a range of personal information such as usernames and passwords for different mobile services, Visa payment card details, delivery addresses and personal notes, on their mobile phone and easily retrieve that data during a browsing session to fill in required data fields. All the data in the wallet is encrypted and the application can be accessed only with a wallet PIN code.

But most of the m-payments activity that is taking place in this country is centred around micro payments for ringtones and mobile screen savers.

One company that has tapped into this market is iTouch which provides a range of services such as soccer alerts, weather updates, competition, logos and ringtones either directly or through third party. Payments for these services vary from 30 cent to €5 and are made by micropayments so if you have registered to receive alerts when Manchester United score a goal you are charged for every message sent out. The mobile networks set the tariff for these services and charge customers through their mobile phone bills.

Gillian Taylor, managing director of iTouch Ireland, says that this market is still dominated by the youth segment who are keen text users and who like to personalise their phone. Liz Caughey from O2 shares this views “young people see their mobile phones as an extension of their social life”.

Taylor believes these types of services will become more sophisticated as the phone technology becomes more advanced and she believes that Christmas will bring the price of technology down.

An Irish company that has experienced success with its m-payments product abroad is Network365. The company, which makes a suite of products under the mzone brand that lets users make payments with mobile devices, received €10m in funding earlier this year. Network365 was also chosen this year by Japanese mobile giant NTT DoCoMo to provide mobile payment and banking services to all of its subscribers in Japan.

Evanna Kearins, marketing communications manager for Network365, puts their success down to the technology and partnerships, “we are able to provide the payment platform and integrate with the banks and credit card companies”. Let’s hope more companies follow suite and develop successful m-payment services for the Irish market.

By Gillian Cope