Cellphones may be the one item that people never leave the house without, but a wallet must come in at a close second. That’s because paying for physical goods—a subway ticket, a sandwich, or a new pair of shoes—with a cellphone hasn’t taken off, especially in North America.
There’s one good reason for that: If a user wants to charge the purchase to his or her cellphone bill, the carrier will likely take a 40 to 50 percent cut of the transaction from the retailer. Purchases are also typically capped at $25. Under these conditions, a trip to the grocery store, or the mall is completely uneconomical for the retailer. But Mobile payment service provider mopay says that’s changing and is now supporting purchasing physical goods billing in countries outside of the U.S. It said both in other countries, both the percentages that carriers are charging and the limits are slowly becoming less onerous. Retailers are also raising prices in order to make-up for how much the carriers are charging.
Mopay said it is currently supporting physical goods in 28 of the 75 countries in which mopay offers some sort of payment options. Mostly they are countries in Western and Eastern Europe, as well as the Middle East. It is also live in Australia and New Zealand. Users are able to purchase virtually anything from tickets to movie downloads to physical goods.
The service is not yet available in the U.S., where mobile payments have been more limited to virtual goods, such as a song or buying virtual currency in an online game. Several companies are going after this market, which has recently become frothy with several companies raising big rounds of capital. Companies include: Zong, PayPal, Boku and Paris-based Hi-media.
Kolja Reiss, Mopay’s managing director of mopay, said in a release that other countries, including the Asian market, is leading the way. “mopay actively pushes mobile payments to essentially become a replacement for cash and other intricate methods of payment, foreseeably eliminating the need for the traditional ‘wallet’ as we know it.”
Perhaps it will never make sense for people to purchase physical goods on their phone, and instead, there will be other solutions created to leave the wallet at home. MobileCrunch reported yesterday a feasible alternative. Visa is working on a new way to charge things to your credit card, and not your cellphone bill. It’s a bit complicated, but basically it has partnered with a company to create a case for your iPhone that allows you to just tap the phone to a credit card payment system to make a transaction. The complicated part is that the case has a microSD card slot, and the card is not only a memory chip but also a near-field communication chip. Trials are scheduled to start during the second quarter of 2010.