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Cashing in on convenience

by sue marek
March/April 2001

If you buy into the scenarios painted by industry visionaries, mobile commerce is all about ease. Consumers will be able to purchase movie tickets, buy beverages from a vending machine and feed parking meters all from their handheld wireless device. The crux of the m-commerce argument: Forking over money never has been easier.

But current m-commerce solutions are far from being practical, reliable or even convenient. Typing a credit card number on a tiny keyboard is tedious and awkward, discouraging consumers from even bothering. That’s why many wireless carriers are considering e-wallets, a technology that makes consumer payment information available to merchants without requiring the user to enter their credit card number prior to each transaction.

In the United States, AT&T Wireless Services was the first wireless carrier to commit to an e-wallet technology. The company last fall announced a deal with Seattle-based Qpass Inc. to offer m-commerce to AWS Digital PocketNet subscribers–an offer that has yet to be introduced. By integrating its e-wallet technology in the application layer, Qpass’ platform provides an interface between the merchant and the consumer and creates a common payment method. To ensure security, transactions between Qpass and AWS are encrypted, as well as the communication between Qpass and supporting merchants.

In the early stages of m-commerce, supporting merchants will most likely reside within the wireless carrier’s “walled garden” of content. “We think that the walled gardens will be the primary mechanism for people buying things,” says Michael Cockrill, Qpass’ vice president of business development. “And for those chosen merchants, [the e-wallet] is a great value proposition.”

Those merchants are critical to Qpass because without their support, Qpass’ technology won’t work. That’s why the company’s alliance with AWS is so important. “AT&T has the market power to convince merchants to integrate with Qpass,” Cockrill says. The company’s deal with AWS definitely gives it a distinct advantage since integrating e-wallet technology costs merchants time and money, prompting retailers to use just one e-wallet technology.

So far, AWS is the only U.S. carrier to commit to an e-wallet technology, although others are expected to sign deals soon. But even so, the carrier has yet to trial Qpass’ technology. Originally planned for late 2000, the trial has been delayed and AT&T Wireless officials wouldn’t comment on when the e-wallet will debut.

Outside the United States, wireless payment technologies are making more headway. Last fall, France Telecom formed a joint venture with Belmont, Calif.-based iPIN to market the company’s e-wallet technology to carriers and banks. In addition, France Telecom is outfitting its Itineris wireless service with the iPIN platform. Likewise, British Telecom in January announced plans to use iPIN’s e-wallet technology via its broadband portals and mobile phones.

In a spicy twist to traditional e-wallet technology, iPIN lets customers choose from several payment options. Purchases can be charged to a credit card, bank account or added to the customer’s wireless phone bill. Like Qpass, iPIN hopes to sell its e-wallet platform to U.S. carriers. And according to Bruno Perrault, iPIN’s vice president of marketing, the U.S. market is poised for growth. “Over the past four or five months there has been increased interest from the U.S. telcos,” he says. “All of them have been quite interested in what we do.”

Despite the e-wallet’s ease of use, not everyone thinks that U.S. consumers are ready for it. “This will be a slow, painful process with a lot of players struggling to find their way,” says Charles Gerlach, a director at Mainspring, a Cambridge, Mass.-based consultancy. “I think U.S. consumers are going to be very skeptical about anything that isn’t widely usable.”

INSET: Current m-commerce solutions are far from being practical, reliable or even convenient.