Former Telstra employee and now enthusiastic entrepreneur Greg Walter leans forward as he demonstrates the fruits of years of labour on his Motorola phone.
He sms’s the word ‘surf’ to a 04 number. A moment later the phone rings and he is asked to enter his PIN.
He does so and a small donation has been sent to surf Life Saving Queensland.
It sounds simple but Mr. Walter claims to have stolen a march on e-commerce’s global golden child Pay Pal, by introducing an Australian wide mobile-phone-based system, called Qpay.
Mobile commerce has made several false starts, with tests in Europe and Japan using RFID chip ‘e-purses’ implanted in new phones.
But Mr Walter says his system is simpler and can be used by anyone with a mobile phone.
Mobile payment systems are not just for those with an interest in surf lifesaving. Mr Walter imagines a teenager who doesn’t have a credit card but who can order a pizza or top up his pre-paid mobile phone in moments with the money in his Qpay account.
The system is a perfect match for people worried about giving credit card details away over the phone or on the internet, he says.
“Our system is designed to overcome the fears about security” he says. “The act hat the authentication is visible to the user gives it a psychological advantage”.
He quotes research from analyst Paul Budde that claims that 45 percent of consumers don’t have a credit card and 75 per cent of those that do, don’t want to use it online.
But the real call for secure mobile micropayment is coming from merchants. It is cheaper than EFTPOS. It is a quick way to enable an ordering system- a clothing manufacturer can put “text ‘Tee’ to xxxx” at the bottom of an ad and attract instant impulse buyers.
Mr Walter says merchants will use the system to encourage people to impulse buy off a billboard or TV ad.
In the future, using passive scanning technology, a shop could even identify you by your mobile phone and send texts with special offers.
“Merchants want to sell, the end user wants to buy stuff,” Says Mr Walter. “You can give e-cash to a friend. You can buy something when you see it. There are unmet needs in the market place waiting for an answer. We hope we have it.” Competition is hotting up in this sector overseas.
Pay Pal mobile, which uses a similar system to Qpay, launched this year in the US, Canada and Britain.
A Pay Pal Australia spokesman told Next that Australia is an “interesting market” for the service. “We are considering it but we have nothing to announce at this time,” he says.
Norwegian company LUUP also launched in Europe this year with a similar system that so far focuses on buying mobile content such as games and ring tones. But in a recent interview, LUUP’s British director Robert Perkins says he sees opportunities in mobile gambling and in the ‘holy grail’ of product selling.
Mr Walter hopes to exploit this window of opportunity in Australia.
As a database expert with a history in banking, working in Telstra’s mobile data section, in 2001 he decided mobile payments was “the next big thing”.
His system has been years in development and 12 months in construction. The link from phone to server is encrypted and the interactive voice recognition system is flexible enough to add services in the near future.
Qpay is hosted in the US at present but Mr Walter is negotiating with Telstra for a locally hosted, fully managed service on a private secure network. He has even had to chase ASIC tick of approval.
Qpay was officially launched 2 weeks ago. For the first 3 months Mr Walter will concentrate on signing up merchants and strategic partners, rather than consumers.
He has already signed up a magazine subscription service and an events promoter, and he is in talks with many others including a national shopping centre food chain.
“At the moment it’s the ultimate inconvenience store- there’s nothing to buy,” he says. “But that will change”.