Saturday, January 30, 2010

Mobile Payment - Tipping Point?

The type of mobile payment I am talking about is the REAL kind, where the purchase shows up on your mobile phone bill. Now, as it relates to the purchase of content such as a ring tone whose sole purpose is use on the mobile phone itself, my opinion is - who cares? What I am writing about is the purchase of content or services that our outside of that realm. And, to further clarify, I would like to focus on what I refer to as Mini-payments ($2-$5) and especially on Normal-payments (>$5). Micro-payments are $1 or less.

I did find out that the Haiti donations are being handled completely differently than regular mobile payments for all the ring tones and digital goods being purchased. In other words, the vast majority of the $10 is going to get to Haiti (eventually).

The downside is that with all this positive attention paid to this method of payment and potential spill over to more people (who otherwise could easily pay with a credit card/Paypal) buying their digital goods with a Mobile payment, the merchant is going to lose roughly 47% of their revenue.

Now, in places like S. Korea where mobile payments have become mainstream, even for physical goods, the merchant pays roughly double what they pay for credit card transactions.

So, the question is, will Mobile payments (in the US) continue to cost the merchant approx 50%? If they do, then this moment will just be another blip and the mobile carriers will miss out on the biggest opportunity in their lifetime. Real mobile payments priced reasonably are the only real alternative payment threat to the card brands and PayPal.

(Note - I pay my mobile phone bill with my credit card!!! Interesting twist to this discussion?)

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