Sun, May 30, 2004 page11

• `Simpay' blurring the line between a telecom and a bank

  AN END TO PLASTIC? An innovative payments system for your mobile phone could give credit card companies a run for their money, analysts say

  • THE GUARDIAN
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  In what looks like the first major blurring between telecommunications companies, credit card networks and banks, a conglomerate of mobile networks is launching a system that may take on credit cards as a way of paying for things, online and off.

  Simpay, founded by Orange, T-Mobile and Vodafone, along with Telefonica Moviles of Spain, is launching a system that will allow customers to charge things directly to their mobile phone bill.

  That's not a new thing but, just as with Visa or Mastercard, with Simpay it will not matter who your bill is from, who the merchant is and who you are connecting through.

  This is new: the Simpay network will, it promises, create an international payment system specifically designed for charging things to your mobile bill, whether they are bought online from your phone, on the internet or in a shop.

  Mobile phone users have been able to buy things via their handset for a while, either by a premium text message, or by proprietary payment systems such as Vodafone's M-Pay.

  In some parts of the world, customers can use their credit card, buy prepaid credits, or charge things from their bank account via their phone in a variety of ways, but none of these systems can talk to each other.

  This isomers can only buy from merchants who are signed up with the same payment system as they are -- meaning the merchants and the mobile phone companies have to go through the expensive business of finding each other and joining up their systems before they can start to look for people to sell things to.

  Roaming customers are in trouble too: each mobile phone network has to negotiate with each other to support each others' payment system, or not, should people roam abroad. In the worst cases, with every country having three or more networks, the number of deals that need to be done for one company to be able to sell to every potential customer is prohibitive.

  It's just too much work for a small ringtone business, for example, to deal with and connect to every mobile payment system in the world.

  Simpay will mean they won't have to. As with credit card networks, the merchant only needs to have an account with one of the connected networks, and every customer of every network connected to Simpay will be able to buy things from them, and charge the cost to their mobile bill.

  The merchant is guaranteed to get paid, and promptly: something so far not taken for granted.

  Jim Wadsworth, Simpay's chief marketing officer, says: "The big difference is that it will be supported by multiple operators in multiple countries. Individual consumers will be able to transact with a much wider range of merchants.
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