Ericsson Internet Payment Exchange (IPX) recently announced that its network is being used by the social networking site Badoo to offer mobile payments for premium services.
Ericsson IPX is a global mobile commerce and connectivity enabler, helping international companies commercialise assets. The business operates like an electronic post man, making sure SMS and MMS are delivered to consumers from over one thousand multi national companies.
The current ‘sweet spot’ per transaction on the mobile phone is from £5 to £25, said Johan Rosendall, president of Ericsson IPX. “We’re just starting to see what’s happening in this space; people are building trust on it now, and are building towards higher and higher value transactions. There’s clearly a lot of growth to be seen here.”
Badoo.com is a location-based service for people looking to chat, flirt and meet new people nearby. The social network uses a ‘freemium’ business model, where users can register, create a profile and upload unlimited images at no cost. Premium features such as ‘Super Powers’, gifts and featured profiles can be paid for via a range of methods, now including the mobile phone.
Rosendall commented: “If you look at the use of mobile payments, premium SMS charging to the phone bill is the first step to building trust in consumers, who will then go on to use other mobile payment methods.
“There is a move in the market at the moment towards mobile ticketing; ticketing currently makes up around 50% of the mobile commerce market, and billing to the phone bill is the first step to getting people used to using the mobile phone as a method of payment.
“After this, we will see people moving to higher value transactions on the mobile phone, depending on what kind of service they are provided by their operator,” he stated.
The challenges in increasing adoption of mobile payments are three-fold, noted Rosendall. The first challenge is in ease of use. “Systems on devices should make it possible for different types of transactions to happen, while being transparent and easy to use for customers.”
The second point is ensuring processes and devices are secure, and the third is the slow slog of educating the consumer, which needs points one and two to begin to have an effect.
“People are getting used to doing smaller transactions at first,” said Rosendall. “In the 1990s we were saying soft drinks machines for mobile payments were there and ready for use, but they are only starting to be used now; mobile money is a big cultural change.”
Badoo is available in over 180 countries, has more than 114 million registered users and is growing rapidly. It is currently the second largest Facebook Application (behind CityVille).
Source : http://bit.ly/mHAD5H