Content and Mobile Payments

Today content on mobile (ringtones, pictures, etc) are mostly paid for by utilising the billing systems of the mobile operators. This approach is probably the only mechanism that allows content providers and mobile operators to effectively collect the millions that is spent on this industry every month. Unfortunately, utilising the billing system to collect for non-telecommunications (and especially ad hoc) services leads to many problems:

• The billing systems are not effective mechanisms to collect payments. In other words it costs a lot of money to collect what is often small amounts. This is because of many factors, but primarily because of built-in distribution costs in the collection of the value in the mobile phone accounts (independant if it is pre- or pos-paid). It is expensive to collect the money in these accounts because of the established commission structures.
• Billing systems are not geared to cater for effective management of disputes. This also means that it is expensive to deal with complaints for content services that consumers lodge.
• Payment activation by the consumer is also often cumbersome and often different from one service to another. (For instance, send the following code via SMS to the following number, or enter the code that we sent you via SMS on a WAP session or the Internet, etc etc.)

This situation will get more complex and problematic in future as more sophisticated content services are being invented and delivered to subscribers. Mobile TV and other services based on broadband is a case in point.

Mobile payment schema's offer elegant solutions to solve the problems listed above. This is because it is possible to provide much more cost-effective payment solutions as well as proven rigid and intuitive support for disputes and complaints. The ability to give immediate feedback on payment activity also adds to cost-reduction and customer satisfaction.