Magazine article American Banker

AT&T Deals Bring New Options for Mobile Payments

Magazine article American Banker

AT&T Deals Bring New Options for Mobile Payments

Article excerpt

Byline: Will Hernandez

AT&T Inc. has signed partnerships with three mobile-payment companies that let its wireless customers charge digital content such as games and music directly to their mobile phone bills.

Boku Inc., Danal Inc.'s BilltoMobile and Zong Inc. each has developed a system that lets them connect to a wireless carrier's billing system. Consumers can use their mobile phone numbers to initiate a transaction at a merchant's checkout screen.

Steve Klebe, BilltoMobile's vice president of business development and strategy, said this type of system can be a viable alternative payment option because "we're leveraging a relationship the consumer and carrier already have."

Companies that have failed in the alternative payments space required the consumer to download software to a personal computer, attach a peripheral device to a PC or create a username and password to use a particular service, Klebe said. "That has been the bane of almost every other attempt to build a meaningful alternative payment," he said.

In the past, most digital content bought through a mobile phone relied on a method called premium short message service, or SMS. This type of message is used to deliver digital content such as ring tones to a mobile phone. The carriers required the merchant to pay as much as 50% of each purchase as a transaction fee.

BilltoMobile, Boku and Zong have moved away from that model to direct-to-mobile billing, which offers a transaction rate of 10% to 20%, Klebe said. …

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