Obopay set to Launch: More Mobile Payments
Michael Arrington
23 comments »
Update: The Obopay website is now live, although you cannot register and use the service until April.
Palo Alto based Obopay is set to launch sometime Thursday (the site is currently password protected). This is the newest product in the very active mobile payments space (see PayPal Mobile and TextPayMe as well).
A few more details about Obopay have come out since Matt Marshall posted a teaser two weeks ago. Obopay will rely on a java client on the phone instead of sms or text message payments like PayPal Mobile and TextPayMe. While this provides for a richer and more secure interface, Obopay will be of use only to people who have phones that support java:
The first 25 phones that we are porting to cut across 2 of the major carriers (i.e. Cingular and T-Mobile) and one major MVNO that we are in trials with. Five different handset manufacturers are represented in this group (i.e. Nokia, Motorola, Kyocera, Samsung and Sony Ericsson) including the three largest manufacturers. In our porting effort we are targeting all of the handsets that are currently offered by the big 4 carriers that are targeted at our end-user group.
The service itself will allow for person to person payments between phones. Obopay says that “users can send money to almost any mobile handset”, which may imply a text message (or email?) for unsupported phones - I just don’t know how that will work yet. Users will also be issued a debit card attached to the account for real world payments, including ATM withdrawls.
As to fees, the information I have now is “The transaction costs just pennies”. I’ll update as I receive more information.
This market is becoming very active. It will be interesting to see where this all goes. My money is on Ebay. They can easily leverage the userbase of Paypal and they have the resources to make it happen. However, without really seeing these other services in action and knowing their plans in terms of execution…it is a weak guess at this point. I just think the competition will need to sign exclusives with the carrier or develop some really beautiful software and scale rapidly and get to critical mass to beat Paypal in this market because of their ability to just leverage their current userbase to enter the mobile market.
What about Treo support?
The Treo 600/650s (Palm) are everywhere and I dont’ see it in the list.
At some point in the future it would be nice to see the funds pulled from a digital gold currency account (www.e-gold.com) and not a CC or bank based account. Very exciting what is progressing with mobile payments.
Interesting that the phone in the photo is (or soon will be) RFID-enabled with Nokia’s Near Field Communication technology…
http://www.nokia.com/nfc
Combining mobile payments with RFID chips opens up even more exciting possibilities.
While there may be a lot of entrants into the mobile payment market (more yet to come I’m sure), I would look for existing payment providers to be able to succeed where others may not. Making payments between various banks & accounts over the ACH network can be an expensive process to get in to, but for existing market leaders in the payment business (eg: CheckFree, etc) they will be able to leverage existing processes and infrastructure to make the mobile payment service profitable.
I know there is alot of hatred towards PayPal in the eBay community, so I dunno. I think they all have equal chances at this point…
It seems the mobile payment market is gaining momentum in the US. I will personally put my money on banks, mobile (virtual) operators or existing payment service providers (think paypal).
We launched a mobile payment service in the Netherlands in 2002. That was web 0.8
When we started two other strartups entered the market as well. None of us really became succesful. Our two collegue startups went bankrupt. Our service is still working but we stopped actively marketing the service as we we’re unable to ‘cross the chasm’.
The problem to be solved by all of these startups will be the cliche: chicken - egg: Retail needs consumers to accept the service and consumers need retail to subscribe. So you will at least need:
- a very large user base to leverage on. One cannot build a solid consumer and merchant base out of 10mio alone
- stop thinking payments and start thinking sales. Merchants are primarily interested in higher sales volume, not lowering transaction cost. So use the mobile asset to create new sales channels.
Be nice to see who’ll survive. Good luck.
PS Sorry: Site in Dutch only.
With cellphones used so differently in the States, I wonder if these services can ever really make it here. I honestly think it’ll be a longer while.
It would be great to send money to another phone through bluetooth. Then allow payments to be made to parking meters/vending machines/stores/gas stations supporting the bluetooth payment system all by using your phone.
Pretty sweet.
Based on European and Asian markets, this doesn’t really stand a chance imo. The whole point of mobile payments is impulse/conveniance and remote purchases, having to install a j2me client first is a massive barrier to entry. I hate to say it but reverse bill is still the way to go until you get cross carrier billing systems like the ill fated SimPay in the UK. Hello Obopay, goodbye Obopay.
In our old payment system we used premium reverse texts and online paypal to buy content from the web, with Paypal we lost 5% of gross, with reverse text we lost over 40%, but still made more money as it was hugely more popular.
Paypal’s new mobile offering is one to watch though albeit still a bit fiddly…
what about paypay.com ?
The website is aweful. Looks like a web version of a “B” movie.
The only way in the world I would consider using such a service is if my phone had a dedicated “pay” button. Navigating the RAZR’s menus are nothing but a pain - it would take me half the time to hand over my credit card.
I would argue that Obopay can be very successful, at least in the peer-to-peer market if they can 1) Build a great brand among teens/college kids; 2) Sign exclusive deals with financial institutions; and 3) Offer a great, steady, and secure product (we will see once they launch public).
I love the merchant strategy centered around providing users with a free ATM card instead of having to go out and sign merchants one by one like others have done.
I am sorry but as a long-time PayPal user, I just don’t get the concept of text messaging long and complicated codes to pay someone from my cell phone. Why hasn’t anyone else done a simple Java client that works instantly.
I see Obopay, if successful, as a possible acquisition target in the near future.
Interesting but what they will soon find out is that there is a huge difference between having an idea of what to do and doing it - ask us, we have been doing mobile payments in Africa for three years! One of the earlier comments above was right on the money, excuse the pun: Key will be “no-barrier to entry” and hence the ability to use cards and associated Visa/MasterCard Certification to do these transactions from Mobile will be key to the 2 billion Visa/MasterCard cardholders worldwide. The fact that they want to Issue a MasterCard as part of the solution may indicate that they are Card Issuer masquerading as a M-Payments solution as apposed to making sure that any customer from any bank, any card on any phone across any mobile network can use the service - Now that’s a challenge!
Any News on Obopay uptake?
I signed up recently and have been using the service. It works really well. I use it with my fantasy football league. You have to give your SS# to get an account. But, I guess that is OK since they are backed by a bank and MasterCard. Also, they give you $5 for signing up and for everyone that you refer. It is worth checking out at http://www.obopay.com
Funny how Obopay is trying to make a splash with mobile payments in the USA just now. SMART Communications in the Philippines has had a product called SMART Money that does everything that Obopay pays does since 2001! 5 years ago! Obopay seems to have replicated the whole concept right down to the use of a Mastercard Electronic debit card.
The main difference is that Smart’s Java client is saved on the SIM card - the Java menus are pushed over the air and saved on the SIM. This makes the system available to the even the older phones that don’t run Java applications.
see http://www.smart.com.ph/SMART/.....mart+Money
Makes you wonder if Obopay’s R&D simply consisted of seeing what else was out there around the world
I have heard of Smart, but don’t know anyone here is the States that use them, is smart even avaliable here? Does it work with the US banking system? How does smart makes its money? How much does it cost me to send you money.
-pk
http://www.obopay.com = dead link. where did they go?
Must be your connection or computer Rick. Still works for me