Motorola Looks at Mobile Payment System for US

[Mike Temporale]

<div class='os_post_top_link'><a href='http://news.com.com/Motorola+to+launch+new+mobile+wallet+service/2100-1039_3-6036815.html?tag=fd_nbs_ent&tag=nl.e433' target='_blank'>http://news.com.com/Motorola+to+launch+new+mobile+wallet+service/2100-1039_3-6036815.html?tag=fd_nbs_ent&tag=nl.e433</a><br /><br /></div><i>"Under a new service announced by Motorola on Wednesday, people can use cell phones equipped with a specific chip to pay bills, simply by passing their handsets over scanners at the cash register. The roots of the new M-Wallet service, which is coming to North America, are in Japan, where companies like Japanese wireless carrier NTT DoCoMo began issuing mobile wallets two years ago. Offering such services is another way mobile carriers can boost profits"</i><br /><br />I'm interested in being able to do banking from my phone, and if that also means I can use my phone as cash, then I'm all for it. What I don't want, is some nasty little service change for every time I use the system. Unfortunately, I'm certain that there will be a service charge. There's very little chance the carrier will offer it unless they can get a cut. And you know Motorola is going to want something out of it as well. :(

[edgar]

I'm hoping they can process it like a bank does a "Check Card". I use it like a Visa card with no pin and I do not pay anything additional.

But, knowing Cingular I'm sure I'd be paying $.05 an ounce for a coke. Or I could buy up to 100 ounces a month in advance and roll over up to 50 ounces a month of unused ounces for only $5 a month more. :x

[shindullin]

Credit card companies make money by charging the vendor for use rather than the user. If they come up with something like that, there would be no (up front) surcharge for consumers. Don't know what actual model they are using to make money though. Cash cards spread so quickly because they charged the user rather than the merchant and thus increased the merchant's bottom line rather than decreasing it like credit cards do. It made them more willing to install the keypads etc. to let cash cards into the marketplace.

edit
*Unless cash cards are used as credit cards, in which case it's basically a wash for the merchant. The compensation scheme made it more in the interest of the merchants to install the keypads etc so that had a fighting chance of making more money out of it.

[mhamrick]

Just a FYI about service fees and so forth.

I totally agree with you, I don't want to see a small charge every time I use the service to buy something. However... in the long run, you're going to be paying for the convenience. Either the carrier will increase the cost of your service or the merchant will increase the cost of their product. In general people have certain types of profit margins they like to make, and in the absence of strict market pressures they tend to have no problem with raising the cost of somethings a couple of pennies to ensure they're making their margins.

But... I think you've got a valid point. Users' perceptions of cost are very important. If I buy 25 items per year with my phone and get charged a $.05 fee for each item, I'll likely pitch a fit. But for some reason, I don't pitch the same fit when I pay my $24.99 annual fee to the credit card company every year.

Merchants already pay service fees to banks that manage credit card, debit card and electronic transactions already. I would hope that the way this service would be paid for is by including it in a pre-existing service commitment with the bank paying the carrier a per transaction fee. Ideally Motorola would view the system as a product differentiator (and therefore eat the cost in order to drive product adoption) or charge a slightly higher price for the phones that use this feature.

Having worked in the electronic transaction space in the past, I'm just thinking there's virtually no hope of this service taking off without the support of one of brick-and-mortar oriented merchant payment gateways.

[Rocco Augusto]

worst idea EVER! you know how many times a day i have a customer come into my cingular store and say "i lost my phone and i need a new one"

now they would have to worry about, "i lost my cellphone and now im broke" ;)

[Jerry Raia]

I'm sure Motorola will cover all the bases here and make this a good reliable service. :rotfl:

[Kris Kumar]

But, knowing Cingular I'm sure I'd be paying $.05 an ounce for a coke. Or I could buy up to 100 ounces a month in advance and roll over up to 50 ounces a month of unused ounces for only $5 a month more. :x

:rotfl: