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Phone Micropayment

Make micriopayments from your phone bill
 
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It is now very common to pay for internet acquired oods and services by credit card. But are grave problems in scaling this method to small payments, or 'micropayments', which may be of the order of a few pence. Such payments will be required for such items as single tracks from record companies, etc. The credit card system is too cumbersome to deal with large volume, small value transactions such as these. An additional problem is that those too young to posess a credit card are excluded, thus a large potential market is lost. There is, I imagine, much head scratching amongst putative vendors on this subject.

But wait! Under our very noses, a large scale, easy to use, accessible to all micropayment system has been deployed, and is now fully operational! It is none other than our friend the mobile phone network. Granted, at the moment, the payments are largely internal to the network, being used for call charges, text message charges and the like. But you can already buy ringtones, which presumably originate from third parties. I imagine that only a small amount of twiddling would be required to make this a more general system.

I envisage it working as follows: You connect to a record company website, and want to micro-buy a track, costing, say 10p. Rather than a creadit card number, you enter your mobile number, together with a password. You have previously acquired this password from the phone company, who text it to your phone. To protect the buyer, the password may be restricted in time (say valid for 1 week), value (no more than £10 worth of transactions), and maximum transaction value (single transaction not exceeding 20p). Vendor server contacts phone company server and validates transaction. Product delivered, money changes hands, everybody's happy.

What could be simpler? No new tricks for the consumer to learn. No new equipment needed. Kids can use it. The phone comany would, of course, want their cut. They could either skim per transaction, or charge per password.

Mickey the Fish, Jul 13 2003

Vodaphone m-pay bill http://mpay-bill.vo...e.co.uk/w_mpay.html
"a new way to buy low cost items online by charging them to your mobile phone." [angel, Oct 04 2004]

BT click&buy http://www.bt.com/micropayments/
"Just enter your unique username and password wherever you see the BT click&buy logo. Any content you purchase is added to your account" [angel, Oct 04 2004]

For parking meters & coke cans http://www.telstra....eless/mcommerce.htm
[PiledHigherandDeeper, Oct 04 2004]

[link]






       This idea definitely has its merits. But I suspect that the vendors would much prefer a business model to try and 'buy-in' the consumers. I reckon that subscriptions over time or longer quantities would be a more likely choice.   

       But this is still quite a nice wee system.
(It does sound familiar - but I'm not crying baked or anything)
Jinbish, Jul 13 2003
  

       Well, the telcos will eventually need a new business model. I guess becoming banks wouldn't be the worst thing that could happen.
phoenix, Jul 13 2003
  

       They may already be doing this in parts of Europe. I saw a news item last year about a cell phone enabled soda vending machine in Finland. To purchase a soda, you call a certain number listed on the machine. The cost of the soda is tagged on to your cell bill, and the machine then dispenses the drink to you.   

       LTNR, Fish.
waugsqueke, Jul 13 2003
  

       Subsidiary, peripheral question: what does the Orange network call itself in Northern Ireland. I can't imagine "The future's Orange" going down too well in south Armagh.
Mickey the Fish, Jul 14 2003
  

       Per waugsqueke, largely Baked, I understand, especially in Scandinavia.
DrCurry, Jul 14 2003
  

       It has merits, and hopefull will be adopted by other continents soon. Personally, I know it is not new. I proposed it 15-20 years ago to WGBH when deregulation opened the market for the $2.00/call billing. The suggestion was an alternative to yearly pledge drives replaced by "per program donation" with a phone call. Real time viewership feedback was the added benefit. At the time though, the cut for the phone company was deemed too much.
kamenmann, Jul 14 2003
  

       Baked. You can laready by coke in Finland from vending machines like this
goff, Jul 16 2003
  

       mobeyforum http://www.mobeyforum.org has been founded by industry leaders already 2000 to build infrastructure based on mobile micro-payments. In Finland you can buy already pretty much stuff with your phone (gifts by signing the receiver address to virtual goods). Latest that I came across was the school of arts entrance examination support material (hints and previous years questions) which you could buy by sending SMS. Another path is the mWallet driven which has been tested and even productized for some time already (see Nokia 6510), thou it doesn't appear to be that interesting path.
superkai, Jul 16 2003
  

       What about setting up a business to use the phone company as its accounts receivable department? Would this also be dirt cheap? Would there be circumstances under which some businesses are deemed unworthy of the honor? It seems sometimes honorable uses of the *%&% "900" and other such numbers are hard to find. Hopefully the present idea's implementation finds itself generally reputable.
LoriZ, Jul 16 2003
  

       Guess no one's actually reading this after all this time. Have you checked out the merchant fees for mobile phone stuff, it's like 50% or 60% of the take for a mobile product, like downloading a ringtone..ouch!   

       Thing is that if you prepay, a lot of the money goes to the middle men. So if you spend 5 pounds on airtime, the cell company only gets about 4 pounds of that.   

       Now you want to use 25p of that to buy something online - even if the cell company pays the vendor 20p they are not making anything. Plus the cost of the text message or whatever. Plus they are in control so can afford to extort a little bit.   

       Result: You pay 25p, vendor gets 12 p is not so stupid anymore?
kindachewy, Jun 25 2009
  
      
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