The UK’s biggest mobile phone companies have launched the first payment scheme allowing customers to pay through their mobile phone accounts.
The new PayForIt technology allows mobile phone customers to credit small purchases up to £10 to their mobile phone accounts, a scheme likened to turning mobile phones into 'digital wallets'.
The system works on the basis that the mobile phone networks have already stored all the details needed for a payment.
When users find content they wish to purchase on a PayForIt-enabled website, they can select to have the amount credited to their bill.
Industry experts expect the technology to be used at first for digital items, including music and video downloads.
Companies already signed on to the scheme include MTV, Samsung, Sony Ericsson and ITV Mobile.
However Anuj Khanna from Tanla Mobile - an accredited PayForIt intermediary - said it was hoped the technology would soon be used to pay for items such as train tickets, congestion charging, parking fees or cinema tickets.
He said the scheme would fill a gap in the market, allowing customers to charge smaller amounts they were reluctant to put on their credit cards.
“You could be on your way to the cinema on the bus on in the car, and you could click and buy your ticket through your phone. It's like PayPal on your phone,” he said.
“This is creating a new market for small transactions using your phone. It’s a market that has been eyed by all the major banks for a long time but they have not been able to come up with a product.”
First announced in March 2006, the PayForIt scheme has been developed by Vodafone, Orange, Three, O2 and T-Mobile.
Mr Khanna said the technology had been gradually rolled out this year, and was being officially launched this month.
The technology had been developed as an alternative to systems such as premium rate SMS, which he said was not highly regarded as a mobile payment system.
Megan Levey (2007). The Telegraph. Mobile phones to be used as 'digital wallets'. Retrieved from http://www.telegraph.co.uk/news/worldnews/1562029/Mobile-phones-to-be-used-as-digital-wallets.html
Phone-in scandal dents trust towards mobile downloads
Ben Bland 2007
Ben Bland 2007
Mr Graham was keen to stress that 2 ergo was introducing a scheme that would help protect mobile phone users from some of the more unscrupulous premium service operators in future.
Many consumers subscribe to paid mobile services, such as news updates or music downloads, on the pretence that it is a one-off commitment. But they soon find out that they have unwittingly signed up for a regular and expensive service.
He said that 2 ergo's Payforit scheme would help to restore trust by ensuring that users actively consent to pay for a service every time before they can be billed.
Ben Bland (2007). The telegraph. Phone-in scandal dents trust towards mobile downloads. Retrieved from http://www.telegraph.co.uk/finance/markets/2809356/Phone-in-scandal-dents-trust-in-mobile-downloads.html
2ergo
Strange name, interesting company. The mobile phone technology group this week launched the UK's first payment scheme through mobiles, to be called Payforit.
The new technology allows users to buy goods and services from the internet via their mobile and charge them to their phones without the need for a credit card.
The system works on the basis that the mobile phone networks have already stored all the details needed for a payment, so the user merely needs to enter a Pin to complete the transaction, giving extra security.
2ergo is the first British intermediary in the UK to establish so-called "billing connects" with multiple mobile networks, namely Vodafone, Orange and T-Mobile.
The company, which floated on Aim in March 2004, is focused on providing technology to mobile phones, and its core business sprang from providing the technology that allows additional paid-for content to be downloaded on to mobiles.
These days it offers a multiserve platform, and has also expanded well in the US, where acceptance levels of content have continued to grow.
Analyst Mike Allen at broker Numis Securities was forecasting a profit of £2.1m to August 2006, giving earnings per share of 5.7p, and that was before this latest announcement. It is expected the benefits of Payforit will not flow through until the next financial year.
Based on its recent 216½p share price, 2ergo sits on a current price-earnings multiple of 38 times, dropping to 36.6 times by August 2007.
That may not be cheap, but the company is an interesting play on a growing sector, and is well worth further investigation.
Rightmove
Home condition Reports were due to be 50pc of the cost of the Home Information Pack, so those who were gearing up to make money from providing them could lose out now that they have been abandoned. The market certainly seems to think so, knocking 20pc off the value of Rightmove's share price in one day.
Panmure Gordon's Alex deGroote immediately slashed the value of HIPs to Rightmove from £180m to zero, reducing his sum of the parts valuation from 425p to 310p. With shares trading at 280¾p on Wednesday evening, that suggests there is still limited value, and it may be a good time to reduce the average cost of your holding if you took Questor's earlier optimistic advice to buy at 390p. Rightmove's trading statement was encouraging, and it is important to remember the value of its website.
James Quinn (2006). The telegraph. The Questor column. Retrieved from http://www.telegraph.co.uk/finance/markets/questor/2943939/The-Questor-column.html
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