At 01:12 PM 9/28/02 +0900, you wrote:
>On Thu, 26 Sep 2002, James Santagata wrote:
>
> > I don't see why it would be so difficult to circumvent the mobile
> > operators. It still seems that customers could use a 3rd party billing
> > systems, ibill, hereuare, etc. These could be activated through a
> > number of ways, such as prepay, web-based access, external 900/888
> > dialing, etc.
>
>Well, looking back at the Internet experience, I think that people (at
>least in the U.S. and similar markets) don't take so well to third-party
>payment systems. I've seen a lot of these come and go, and in the end
>pretty much everybody is still using the MOTO (Mail Order/Telephone
>Order) credit card model, where you give the merchant your credit card
>information directly. There's a fairly per-transaction cost overhead
>to this (on the order of several tens of cents for even the very
>smallest transaction), and thus the lack of low-cost (under a few
>dollars) services on the net. Forget micropayments; we can't even do
>minipayments.
It depends on what market segment you are targeting and what
you are selling, but Paypal, eBay Payments (now merged with
PayPal), iBill, and ccBill are all very pervasive and extremely
popular for both buyer and seller and are easily integrated into
your automated payment system without taking a lot of time
or money. In Japan there used to be/may still be a payment firm
like that, I believe it was called WebMoney who were in talks with
eBay several years ago.
And unlike the hassle and hurdles you have to jump through to get a
traditional MOTO account, even if you are a big company, you can set
these accounts up immediately. And, these 3rd party processors
forced the traditional MOTO account providers to get real -- that is,
come out of their old banking-centric cocoons which featured the old 3-6-3
concept. Take money in at 3%, lend it out at 6% and tee off at 3pm.
Before these 3rd party firms existed, getting a MOTO account was
really, really tough. Now the mainstream banks are waking up. Wells
Fargo had invested $20 million or so into eBay Payments earlier and
now has their own line of electronic payment options.
There is a lot to be said for that. And the innovations by the 3rd party
processors are continuing.
>The one exception to this is PayPal, but that came about not for
>small payments, but because of the difficulty of acquiring a credit
>card merchant account; PayPal is filling the need for individual to
>individual payments, and that's mostly what it's used for.
Paypal claims over 17 million users now. Not sure how many are unique,
active accounts (for instance I have 3 accounts, using 1 actively). eBay
Payments claims to have some 5 million users. These are more focused
on person-to-person accounts but also used by small businesses or even
larger businesses that are new to e-commerce.
>Part of this may be due to the consumer tendency to prefer flat-rate
>payments to per-use payments; people like to know in advance how much
>something is going to cost them, even when (or perhaps because) they
>don't know in advance how much they'll use a service. That's probably
>one of the reasons for the success of the Docomo billing system; people
>are comfortable knowing that they'll pay a fixed, small amount per month
>for something.
>
>So I don't hold out a lot of hope for third-party billing systems.
>Basically, consumers already have enough different ways of paying
>for things (various credit cards, two or more phone bills [fixed and
>mobile], etc.) that they really don't want to add more. Any merchant
>that can piggyback on a payment system that the consumer already is
>using has a much better chance of making sales.
The existence of viable 3rd party payment systems are
critical to any e-commerce ecosystem, including the mobile space
for several reasons including the competition created which keeps
the incumbent processors "honest" in terms of pricing, policies and
customer support/service and it drives innovation.
If you look at the US market, the people you would have expected to be
first into this market -- Wells Fargo, Bank of America, et al. -- were
dead last. And in terms of online fraud detection and risk management,
Cybersource
came out of nowhere and basically invented the industry -- which is amazing,
since this should have been a no-brainer for the real-world leaders in this
field but they didn't get it, or at least the top management didn't get it.
In general the incumbents no incentive to get into the market as they have
deep pockets and can play the waiting game, in addition, innovative people/
risk takers in those types of organizations are not rewarded but typically
punished for thinking out of the box.
James Santagata
A U D I E N C E T R A X
Monetize your Media (tm)
http://www.audiencetrax.com
Received on Sat Sep 28 21:33:09 2002