PayForIt
This post is mainly about UK mobile payment so if you are not in the UK then this might not interest you.
At Monday’s MDA/KTN ‘Monitising the Mobile Internet in Tough Times’ event Thomas Green of MX Telecom gave a great summary of PayForIt. Later there was a panel session with payment representatives from all the major UK operators (Vodafone, Orange, 3, T-Mobile and 02). This was the first time I have ever seen all the operators on one ’stage’ openly trying to address the needs of services and product providers.
PayForIt has been created to address (public) concerns over phone based billing caused by various swindles and poorly run uses of premium SMS. Premium SMS is being phased out and being replaced with PayForIt. A number of accredited payment intermediaries are involved to ensure that payment occurs according to a standard payment specification that defines end-user experience right down to individual screens. The system doesn’t use SMS. It’s all mobile web (http) based and automatically identifies the user without them having to give their mobile number (more on this later).
As with PSMS, there are fixed price points and payment amounts can’t be variable. The pay out rates vary by operator from 73 to 87% (45% for Virgin). In addition you will have to a pay fee to intermediaries. Notice, I have linked to Bango because I couldn’t find the pay out rates on the PayForIt site. These should be published not only for transparency but also because this will be the most important thing merchants will be looking for on the PayForIt site. There’s a maximum payment of £10 (£30 for Vodafone). One main strength of PayForIt is that the consumer doesn’t need a credit card or bank account. This enables a large number of teenagers and children to pay for items.
As previously mentioned, PayForIt implicitly knows the user’s phone number. However, this is only if the user has used a WAP APN. If the user using an Internet APN (the majority of users on Smartphones will be) there’s a newer WebPayForIt interface where the user can enter their number.
The payouts are low compared to 91% for PayPal, 90% for credit/debit card (via Bango) or actually a single digit percentage fee if you interface with PayPal yourself.
At the MDA/KTN event there was a general consensus that PayForIt hasn’t been successful. There were initial usability problems for some companies when they didn’t fully think through the switch from PSMS to PayForIt. It was thought that PayForIt needs a big brand to use it before it can gain consumer awareness. PayForIt weaknesses include a low payout, long revenue cycle, lack of guarantees over payment, no refund facility, and the suitability only for low value transactions. It’s thought that PayForIt now needs new content to drive it. Currently most of the content sold is old world (ringtones etc) content. However, during a later presentation, Mark Curtis of Flirtomatic mentioned that PayForIt is an important enabler, most payments come via PayForIt with only only 10% via credit card.
PayForIt is still a work in progress. The operators can and will change the revenue model if companies approach them with a good fit market. They are also open to changes and have quarterly meetings to evolve the system. Who to contact though? The PayForIt contact page is unhelpful and just links to the operator generic web pages. Here are the people who represented PayForIt at the MDA/KTN event so I suggest you contact them to suggest alternative revenue schemes or changes to PayForIt…
- Iain McCallum - O2
- Rory Maguire - Hutchison 3G
- Phil Mulligan - Orange
- Gavin Dent - T- Mobile
- Paul Gill - Vodafone
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