Mobile banking is becoming increasingly popular but there are still only a handful of companies out there that are offering good mobile payment systems. There are basically two types of these companies: those that let you use your phone to charge payments to your bank account and those that let you charge payments to your cell phone bill. Most of the companies that are working in this industry are independent startups but there are also a few huge industry players that are involved in this game.
Pay from your Bank Account Using Your Phone
One type of mobile payment account that’s becoming popular is the one that offers the possibility to use your mobile phone to make payments from your bank account. To do this, you link your mobile phone to your checking or credit card account. Then you can swipe the phone at contactless pay stations. The money for the transaction is drawn directly out of your bank account in the same way that would happen with a debit card.
Some of the companies that offer this type of mobile payment option are:
1. Bling Nation. This is a really impressive startup company that creates RFID-enabled stickers which can be attached to mobile phone handsets so that the phones can then be used to make contactless payments. The stickers essentially work like debit cards in that they must be activated before use and are linked with the user’s bank account. The startup markets these stickers to banks who can then offer them to their customers as an easy way to make mobile payments. The sticker is put on the phone and can then be swiped at stores that offer contactless payment solutions. The money is immediately withdrawn from the account and a receipt for the purchase is sent via text message. The company is a new one but it must have a good business plan since it’s already raised $8 million in funding.
2. Mobile Payment Skins. A company that is offering something similar to Bling Nation is Mobile Payment Skins. This company makes mobile phone skins. The skins have an RFID inlay which allows the phones to be used for making contactless payments. Right now the company is working with prepaid accounts; people put money into an account and use the phone to withdraw that money. However, Mobile Payment Skins would also like to work with banks and credit card companies to offer more account options in the future.
3. Obopay. One of the most well-funded companies that offers mobile payments linked to a bank account is Obopay. The company is versatile in that it offers both bank accounts (which can be linked to an Obopay Mastercard) and prepaid accounts. You sign up for a free account with Obopay and then you can make payments and receive payments using the account. It works for making purchases from stores as well as for exchanging money with individuals (such as family members). What you pay is a small transaction fee when you make payments.
4. Vesta. This company offers mobile payment solutions that are designed to meet not only the needs of the average consumer but also those of professionals working in various types of business. Their mobile payments can be made using SMS, MMS and SIM-based technologies and can be linked to a credit card, checking account or prepaid mobile account.
5. Verrus. One variation on this type of mobile payment is the one in which you use your mobile phone to place a phone call to complete a transaction. When you make the call, the money is withdrawn from your account (or charged to a credit card that you have on file). Verrus offers this service for specific transactions. You can use their pay-by-phone service to pay for taxi fares and parking in certain U.S. states. Just call the number, complete the voice transaction and receive your receipt online.
Charge Payments to your Cell Phone Bill
Another type of mobile payment option is the option to pay for transactions using your mobile phone but to have the payment billed to your phone bill instead of taken from your account. This is nice for people who don’t have bank accounts or who don’t want to withdraw money from their banks on a regular basis. These types of mobile payments are most commonly used for purchasing virtual products and services. For example, you may want to buy a computer game online and you could pay for that with your cell phone. The transaction would show up on your next cell phone bill.
6. Boku. This company made headlines in early June when it made three huge announcements at once. First, it announced the official public launch of the company. Second, it announced that it would be making two huge acquisitions of other mobile payment companies. And finally, it announced that it had received $13 million in venture capital funding to make all of this happen. The company aims to have a global reach and therefore to work as a method of making mobile payments across a diverse range of different websites.
7. Zong. The main competitor that Boku is facing in terms of a similar type of mobile payment service is Zong. This company got a toehold in the industry when it started working with Outspark, a popular computer gaming company. Customers could use Zong to make mobile payments for the games that they wanted to play. Zong also began working with Facebook application developers and other leading websites. Right now Boku and Zong are going head-to-head in this type of mobile payment business.
Some of the Big Guys
These startup companies are all offering some really great options for making mobile payments. However, there are a lot of big companies that are getting involved in this industry as well. Credit card companies, banks and handset makers are all interested in making some money off of mobile payments.
8. PayPal Mobile. One of the most popular mobile banking systems today is PayPal mobile. This is simply a mobile version of your online PayPal account which lets you make PayPal payment transactions from your mobile phone.
9. Visa / Nokia. One of the biggest partnerships in the mobile payments business has been the partnership between Nokia and Visa. Nokia is starting to offer NFC-enabled handsets which are being rolled out globally with assistance from Visa to offer contactless payments through the mobile phone. Learn more about that here.
10. Smartphone makers. Today’s advanced smartphones all offer easy access to the mobile web which is significantly improving the ability to make mobile payments from anywhere. The iPhone, Blackberry phones and Android handsets are all big players in using the mobile web to make payments. As mobile banking applications develop for these phones, their role in the mobile payment industry will only grow.