The Prepaid Press - April 15, 2008 - (Page 21)

PAYMENTS April 15 · 2008 - 21 Mobile Payments: The Saga Continues A Perfect Storm in the Offing? Staff Report from page 1 that their phone supports a web browser. It is relatively secure, since the user has to sign in each time a payment is made. It is easy for the vendor; all they have to do is assure that web based applications work on small cell phone or smartphone screens. This method is more applicable to large, or regular payments. It is not easy to use for small, ad hoc payments, since many keystrokes may be required to affect a transaction. This complexity may create a barrier for consumers. If the transactions are more frequent, an application could be downloaded into the browser or phone to enable an easier transaction, but this may limit the potential market. One notable example of implementing mobile payments is PayPal Mobile. You can make payments for a wide variety of things, not just eBay purchases. You can send or receive money to any other PayPal customer using the web browser on a cell phone. text messaging and an account with funds. Although SMS money transfer is not currently used to any great extent in the U.S., rumors that the Google gPhone will offer SMS payments abound. Part of the speculation centers around a close reading of some of Google’s patents, which describe an SMS payment system. This system would fit into Google Checkout easily. Google was a player in the recent FCC bandwidth auctions, and although it did not land any bandwidth of its own, it did get some concessions on open access. Google is also said to be preparing a proposal for the FCC for access to the “white space” between channels. SMS payment systems function with very little bandwidth. Another company, Anam, recently announced that Canadian carrier, TELUS, is its first customer for its SMS payment system, that allows consumers to send money to people in their contact list using a simple three-step procedure. RFID has not gained a lot of traction because of the need to involve the cellular carrier, who does not stand to gain a lot from the scheme. NFC Payments A select group of BART riders in Oakland, CA are participating in a trial that will allow them to walk up to any BART fare gate with a specially-equipped Sprint wireless phone and pay for value drops below $10 the NFC technology automatically reloads the phone ‘over the air’ with another $48 worth of rides and the customer will automatically receive our high-value discount, so they will only be charged $45.” The growth of mobile payments is dependent on both technology and marketing. their ride by tagging the phone on a reader located on top of the gate. Jack in the Box is also participating in the trial. This system, provided by First Data, uses a developing new technology called “Near Field Communication” (NFC). NFC offers two way communications, enabling interaction between the cell phone user and the vendor. For example, the vendor can offer an electronic coupon, which the user can then cash by accepting it on his cell phone. Pre-selected trial participants will exchange their existing mobile phones for the Sprint trial phones embedded with the NFC enabled smart chip - a chip that will allow them to securely pay for both their fares and their fries. “In BART’s case, a participant will initially have a stored value of $48 worth of BART rides loaded onto their NFC enabled mobile phone,” BART Director James Fang said. “Once the stored SMS Money Transfer Using the Short Message Service, SMS, or “texting” as it is called, may be appropriate to a wider variety of transactions. The promise is a simple method for sending payments. For example, if you are at a convenience store, you can tell the clerk you want to pay using SMS. The clerk sends you a text message requesting payment. To approve the sale, you respond to the text message with a PIN approving the sale. When the transaction is complete, both merchant and customer receive SMS receipts. While this approach requires some programming on the merchant’s part, the user only needs RFID Payments Marrying the ubiquity of cellular phones with Radio Frequency IDentification (RFID) techniques yields a simple system for using cell phones using the same chip that is embedded in fobs, like the recently discontinued American Express fob and some plastic cards. There does not have to be any connection between the RFID chip and the cell phone; the cell phone is just a container for the RFID chip. But, some clever marketing could make the combination more attractive. The RFID chip is usually embedded in the SIM chip that enables GSM cell phones, making the replacement of the phone itself unnecessary. A Perfect Storm? Combining the characteristics of the prepaid cellular markets with the needs of the unbanked may provide a new market for mobile payments. RadioShack recently announced it would market prepaid cell phones provided by Trumpet Mobile, a subsidiary of Dallas based Affinity Mobile, to perform transactions over Western Union’s expansive network. The marketing muscle of RadioShack may overcome the drawback of requiring a special cell phone. Customers can buy a prepaid handset at any of RadioShack’s 4,000 locations, then load up to $200 on the phone for cash transfer over Western Union’s network. The transfers can be either within the U.S. or internationally. A Western Union Cash Card is included in the box with the handset, and the phone and the card are linked to a single account, giving flexibility on how to access the cash. The transactions are handled using a hardware and software platform, called “MADE” to make secure financial transactions. The MADE platform, which is provided by Affinity, can be used in other carrier networks. The unique strength of this approach is the combination of the marketing capabilities of RadioShack and Western Union with the transaction processing of Trumpet, which may create enough momentum to allow wide acceptance. CAESARS PALACE, LAS VEGAS · AUGUST 19 – 21, 2008 The Prepaid Press Expo is the one event that bridges all sectors of the prepaid services industry, and all players within each sector. It is the primary point of convergence for prepaid services in 2008, and an event you won’t want to miss! THE PREPAID FORUM AT TPPEXPO’08 EXHIBIT RESERVE YOUR BOOTH TODAY! Taberna (Booth) Prices, per 10’ X 10’ $3,900 through May 31 $4,100 June 1 - July 1 $4,300 thereafter Exhibit space and sponsorships are limited, so reserve your spot now. 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Table of Contents Feed for the Digital Edition of The Prepaid Press - April 15, 2008

The Prepaid Press - April 15, 2008 Motorola to Split Mobile Payments: The Saga Continues Contents The Retske Report: Election Year and Woody Hayes Regulatory Rundown: 2008 First Quarter Mobile Update 5 Minutes with Mark Herrington tppEXPO’08 Spotlight New Handsets Announced at CTIA Prepaid Wireless in Brief Prepaid Wireless Roundup Virgin Mobile Reports Earnings of 6 Cents Movida Files Chapter 11 LiveWire Mobile Acquires Groove Mobile Boost Selects Vesta for Transactions RadioShack to Offer Trumpet Mobile Service Virgin Offers New Pay as You Go Plans Book Review: Webster’s New World Telecom Dictionary Management Changes at IDT Spot Rates Calling Cards in Brief The State of Prepaid Technology: Productive Coexistence FTC Asks Court to Halt Prepaid Calling Card Scam Louisiana Community Mulls Tax on Prepaid Cards Pactolus Wins VON Magazine Award iBasis Lowers Pakistan Rate for Pingo The Legal Line Biometric Update: Keep Your Shirt On AccountNow Ends Upfront Fees Evolution Benefits Acquires SmartFlex Payments in Brief NetSpend to Offer Bill Payment and Top-up Union Bank Introduces Contactless Card Ingenico Announces Development Kit Prepaid 101: Stupid Card Tricks PLS Offering Walk-In Bill Payment Spend Gift Cards ASAP Credit Card Breach at Hannaford Bros. NACS Withdraws Opposition to Tobacco Bill Study Finds Gift Card Packaging Increases Sales NACS Names International VP Inflatable Display Provides Inexpensive Signage Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - April 15, 2008

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