Ericsson Pitching SMS Payment System At Online Newspapers
Newspapers may be rushing to charge for online content, but the infrastructure to facilitate the payments is in its infancy. So it’s no surprise that technology providers are stepping forward to offer their backend…
One such is Sweden’s Ericsson: its Internet Payment Exchange (IPX) division is this month expanding its SMS-based Web Pin Opt-in mobile payment system as a platform to drive payments for web content, too, Ericsson (NSDQ: ERIC) explained to us in a briefing…
With IPX, when customers encounter a paywall, they enter their mobile phone number on the web page and are sent an SMS text message with a four-digit PIN code. The PIN fee is taken from users’ mobile carrier bill and, when entered back on the web page, gives them either one-off access to individual articles or longer-term access as part of a subscription deal.
It’s not as if there are no other options out there for news publishers to make their content pay: Google Checkout and PayPal are just two of the contenders for news providers’ business in the micropayments area. So what makes Ericsson’s proposition different? “We believe this has the least barriers to entry,” says Ericsson IPX
Whether we the consumers like it or not, content providers will give a lot of thought to billing mechanisms such as this to offset ad revenue declines or to just make an income. We studied Google and PayPal’s approach and although they have brand recognition, forcing users to create an additional account with a 3rd party or requiring them to keep one up to date will create another barrier to purchase.
Using this Direct to Bill technology provides a ubiquitous billing mechanic. When a consumer views on their phone, they simply click a link to complete a purchase. Online they do the pin verification method. When you add Twitter to the equation, a special feature article (eg a columnist doing an in depth analyst of Apples most recent earnings call) could be published and passed around at great speed, which people pay to read by a simple billing process.
I am slightly biased, as we run http://www.gopayforit.com which offers a very similar service for the UK market, at a fraction of the price!