Content area
Full Text
A growing number of mobile payments companies are promoting systems that charge purchases to users' phone bills rather than credit or debit cards.
Since Apple Inc.'s tight control of the iPhone precludes this approach, the payments firms are gravitating to Google Inc.'s Android - which itself is emerging as the handset of choice for the consumers most likely to use their phones for banking and financial activities.
On Wednesday, Zong Inc. and Boku Inc. each introduced tools that let software developers weave their payments systems into applications for Android phones. These systems could be used, for example, by a video game developer to sell additional levels to someone who has downloaded a game that was given away for free.
Executives say charging these small purchases to a phone bill would appeal to consumers more than keying in a card account number. However, analysts said the niche appeal and low price of these digital products mean there is little threat to card issuers' interchange revenue.
"People don't want to have to whip out their credit card to buy things," said David Yoo, Boku's senior vice president of strategy. When that is required, "there's a lot of drop-off" - consumers decide not to make the purchase after all.
Hill Ferguson, Zong's vice president of product and marketing, agreed, saying, "any time you ask a consumer to type anything - be it their name or a credit card or a password or what have you - it's hard." Offering a one-click alternative tied to the user's existing phone-billing system "opens up a whole new world of monetization options for Android developers, because they now no longer have to send users through complicated forms" or charge for their apps up front, he said.
Neither Boku's service, called Paymo, nor Zong requires users to type in a card number. They click a...