Vulnerabilities / Threats // Insider Threats
10/28/2010
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AT&T Partners With Mobile Payment Providers

Deals with BilltoMobile, Boku, and Zong give the carrier's wireless subscribers the ability to buy online goods and services from their cell phones.

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AT&T announced partnerships with three mobile payments companies Thursday, giving its wireless subscribers the ability to charge online purchases to their accounts from a cell phone.

The carrier will use BilltoMobile's Direct Mobile Billing payment service on a trial basis so subscribers can make mobile payments on several digital goods and services websites, AT&T said.

"This form of billing is the logical next step in the e-commerce mobile payments landscape that BilltoMobile and our strategic investor, Danal Co., Ltd, have pioneered for the past several years," said Jim Greenwell, CEO of BilltoMobile, based in San Jose, Calif., in a statement.

The carrier has also partnered with San Francisco-based startup Boku to give AT&T subscribers the ability to buy music, movies, digital news, and other services from their cell phones. By typing their phone number into their cell phone, customers can avoid using a bank card or PayPal account, and the charges will show up on their phone bill.

One of Boku's competitors, mobile payments platform provider Zong, has also inked a deal with the carrier to let subscribers make purchases through a "frictionless process," on a trial basis, the Menlo Park, Calif.-based mobile provider said. After verifying a customer's wireless phone number and account "in a matter of seconds," payment is cleared on the customer's wireless service account. Among its 200 carrier partners worldwide are T-Mobile, Vodafone, Orange, and O2.

"This agreement is a great step in bringing more convenience with a new online purchase experience to AT&T's wireless customers," said Zong CEO David Marcus, in a statement. "Our strengths, combined with AT&T's, can help make mobile payments more efficient, affordable, robust, and more economical for customers and merchants alike."

Virtual goods, such as sales on Facebook applications, have made up the bulk of Boku's and Zong's earnings. Within a month, AT&T customers will have access to other types of digital items, Boku senior VP Ron Hirson said, adding that customers are beginning to take mobile payments seriously. Mobile payments have not yet seen widespread momentum because carriers have required as much as a 40% fee for each purchase, so the seller hasn't been able to make a profit. AT&T reduced its fee to Boku, but the terms of the deal were not disclosed.

BilltoMobile's interface does not require any setup, application, download, registration, or interaction with credit or bank cards. Only two steps are involved to complete a secure purchase, which takes a few seconds, the company said. Consumers also don't have to reveal any account numbers with BilltoMobile's payment service.

Mobile payments are expected to be over a $200 billion market by 2012, according to Juniper Research.

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