mobileAxept is a Norwegian startup providing a mobile phone payment system, which directly charges an existing credit card or a bank account.
mobileAxept’s solution is based on a patented gateway for securing transactions between the customer, merchant, and credit card companies or banks. The merchants can offer customers a way to pay with their mobile phone, either by calling or sending a SMS to specified numer. However, the payment will be processed on the customer’s credit or debit card rather than added to phone bill. This way the phone can be used for quick impulse purchases or micropayments without big overhead costs typically associated with mobile payments.
Users haveto register their info into the service the first time (can be done on mobile or on web), but after that only verifying the payment amount by SMS, or entering the amount using the phone keys in mobileAxept’s automatic call system is enough. mobileAxept then transfers the funds through the existing banking infrastructure, and sends a receipt by SMS. The credit card and account details won’t be saved to mobileAxept’s backend service.
As credit card frauds become more and more common, with mobileAxept you would never have to give the physical card to a random clerk, who might copy all the card information. Due to the service being based in call/SMS, pretty much any mobile phone can be used, regardless of the carrier. Also the fees being much lower than other, more traditional means of mobile payment is a big advantage.
mobileAxept has been developing their service with pilot customers from different countries, and the firm currently has operations in Norway, Denmark, Sweden, and USA. According to mobileAxept several Norwegian churches are using their quickcollect™ product due to successful pilot project. A potentially clever way of collecting donations from people who might not otherwise give anything if missing small notes or coins.
The business model of mobileAxept varies across cases – mobileAxept mention they can have a startup fee and fixed monthly fees, or then a percentage fee on each transaction. The firm states that the transaction fee can be around 10 % at max, covering the costs by all other parties involved, including mobileAxept.
A big drawback in the service is that the first time one of course needs to register the account, and thus have the card/account number at hand. This effectively cuts off those potential users who just do not have the information close by or do not bother. Also there is a need for more clever added value services than just trying to get merchants replace existing direct card payments with a new service eating into their margins. Along with normal card payments, the solution competes also with NFC technology, and other 3rd party trusted transaction providers like PayPal.
Despite the problems, mobileAxept could have potential for true mobile and micropayments platform. It would be nice to be able to easily purchase something or donate money e.g. while surfing the mobile web without entering your credit card details. Once set up, mobileAxept’s solution could provide a similar easiness of purchase as SMS operator billing or iTunes, with less costs and potentially broader reach. The solution might also work in developing countries, as it works on practically all phones. In developing countries SMS and call credits have anyway already become a de facto currency, albeit mobileAxept customers need at least a bank account.