Mark Bridge writes:
Almost everyone in the mobile telecoms industry seems to be looking for a perfect payment system that’ll transform their mobile phone into some kind of electronic wallet. Yet despite many trial schemes – and a few commercial launches – cards and cash are still favoured by consumers and retailers in much of the world.
In fact, the quest for the perfect m-payment solution appears to have turned into a cliché. Search on Google for “holy grail” alongside “mobile payments” and you’ll end up with over 57,000 results.
But the challenge remains unfulfilled. So when a company claims to have developed technology to provide “the first true mobile payment solution”, it’s definitely worth a closer look.
The company is DigiMo, based in the Israeli city of Hod HaSharon. Company founder and CEO Yossi Yarkoni talked to me about the basics of the DigiMo platform.
“We are speaking about getting into the shop and paying with the mobile for the goods that you have bought”, he explained. “It’s not digital goods, virtual goods; it’s actually real mobile payment at the point of sale. Any street, any merchant, any retail chain, paying with the mobile device. This is why we are saying a true, real mobile payment at the point of sale.”
The new platform was born out of frustration. While working on its mobile payment solution, DigiMo discovered that the main barrier to integration at the point of sale was cash register software. Not only was it time-consuming to work with the software provider, it was also expensive. Yossi said DigiMo’s engineers were told to try and build a product that would allow mobile payments and mobile coupon redemption without costly integration... and their solution is the product that DigiMo announced on 5th May.
There’s a one-off registration process for consumers that involves them providing their mobile number and chosen payment details. Bank accounts, credit cards and PayPal accounts could all be used. DigiMo’s system then identifies the phone and provides the appropriate software as a Java app or a dedicated smartphone application.
Retailers also need to register and are sent a barcode – called a POS ID sticker – that’s put next to the point of sale.
Transactions are processed through the till as usual. Behind the scenes, the till sends the transaction details to the DigiMo Mobile Payment Platform. When it’s time for payment, the customer scans the POS ID barcode with their phone’s camera – and the phone confirms this information to DigiMo’s platform. The platform then associates the customer’s payment details with the location and the transaction, processes payment and – when payment is approved by the financial institution – sends that approval to the point of sale. Higher value transactions can be protected by a PIN code for additional security.
Unlike other solutions where the retailer needs to scan a barcode on the phone’s screen, the only ‘scanning’ in this case is done by the customer.
It all sounds very straightforward but, of course, it’ll only benefit customers if it’s adopted by retailers. I asked Yossi whether we’d see the DigiMo brand in shops or if he was looking to work with other companies.
“We think the best thing for us to do is to work together with third parties that already have a client base. What we are offering is to strengthen the relationship between those big organisations having millions of clients and their customers, so it seems that mobile operators, MVNOs and credit card companies are the best partners for us.”
DigiMo has been running a pilot scheme in Israel with a petrol station and is expanding it to include five different retail chains in late June or early July. There’s also been interest in Italy and Germany – and Yossi says retailers could implement the system internationally within a few months if they wanted.
One of the least-comfortable subjects for mobile payment providers is consumer and retailer demand. Although mobile money transfers have proved very popular in markets where there isn’t any major banking network, they’re less popular and arguably unnecessary in Western Europe and North America. With cash and cards both working well, why do we need mobile payments?
Yossi gave me a confident response. “The answer lies in the capabilities of the mobile”, he said. “We’re not looking to change or to replace physical plastic credit cards with credit cards that are ‘hanged’ on a mobile device – but we are actually looking to use all the capabilities of the mobile devices.”
He went on to describe a world where location-based services were integrated with DigiMo’s platform. Customers could search for a nearby retailer, download a digital voucher and then buy discounted products from a participating shop. Families could share a mobile wallet, enabling a parent to authorise their child’s purchases if the child was shopping in a different town.
The future, Yossi reckons, will see payment systems integrating more and more information. Alongside location data there’ll be social networks and all the other information that’s already available on mobile devices. It’s all about shopping “in a smarter way”, he told me.
DigiMo’s already had meetings with a number of Silicon Valley’s biggest names. With interest from one of those online giants , mobile payments could soon get the commercial kick-start many people have been waiting for.
|You can hear Yossi Yarkoni talking about DigiMo’s Mobile Payment Platform in our forthcoming podcast on 18th May 2011. To listen, simply find The Fonecast on iTunes or subscribe to our RSS feed.