Monday, June 22, 2009

Services Make It Easier to Buy via Cellphone -

Services Make It Easier to Buy via Cellphone -

Published: June 21, 2009

SAN FRANCISCO — On a PC, having to fill out a form and type in a credit card number to buy something is only mildly annoying. On a cellphone, it could make you want to skip the purchase entirely.

Mark Britto of Boku hopes people will pay using their phone numbers instead of credit cards.

This is why investors, start-ups and major corporations are pouring money into services that make it easier to use cellphones to buy goods and transfer money.

The aim is to turn phones into virtual credit cards or checkbooks, enabling the kind of click-and-buy commerce and online banking that people have come to expect on their PCs. But shrinking down those services to fit onto cellphones presents serious challenges.

The services must work on many different phones and through many cellphone service providers, which usually control the billing relationships with customers. That adds complexity to the already tricky business of safely and securely transferring funds among financial institutions and merchants.

Mobile payment systems have been tried before, with only modest success. Driving a new flurry of deal making, industry analysts and executives say, is the success of the iPhone, BlackBerry and other sophisticated devices. These phones make complex interactions easier, and they have shown that people on the go are willing to spend on music, games and virtual goods, like a $2 costume for a character in a video game.

Now the race is on to develop new payment systems — and to get several percentage points in fees from each transaction.

“A lot of big players with big bucks are investing a lot of money in this,” said J. Gerry Purdy, an industry analyst for Frost & Sullivan, a market research firm. “They’re seeing that returns could be so huge.”

“We know it’s going to be there,” he said of the technology. “The question is how to make it easy for people.”

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