With nearly 96 percent of the world's population at the end
of 2012 holding mobile subscriptions, according to the International Telecommunication
Union, many technology companies are innovating ways to perform common tasks
from mobile devices to make the user experience as convenient as possible. Making
a payment has become one of those tasks.
"There's a new developing view of the world where every
single person in the world, especially travelers, have mobile devices in their
pockets," said Alek Zdziarski, chief technology officer for Payvia, a
mobile payments firm.
With this in mind, several banks, credit card providers and
merchants have launched services like mobile
wallets and applications, which use near-field communications functionality to let users
associate a credit card with their phones to make purchases. One of the most high-profile
examples is coffee chain Starbucks, which created a mobile app that functions
as a gift card with reloadable credits clients use to buy coffee. The company
recently revealed that about 10 percent of U.S. sales now are generated from customers'
mobile payments.
Payvia is different in that it allows users to make payments
through phone carrier billing, which allows users to charge a purchase to their
phone provider. The company has relationships with the major U.S. mobile phone
service providers, including AT&T, Sprint, T-Mobile and Verizon Wireless,
according to Zdziarski.
"Carrier billing enables you to do a transaction on
your mobile phone that gets immediately credited against your [phone] carrier
bill rather than your bank account or credit card provider," Zdziarski
said. "Once we know it's your phone and you're holding it in your hand, we're
able to deduct the cost of service from the provider's phone bill rather than
the credit card bill. "
For example, if a traveler wants to purchase Internet
service while waiting at an airport, rather than entering a credit card number,
the user would enter his mobile phone number. Payvia and the phone provider
then verify and authorize the transaction before it is completed.
The company has been around for 10 years in the wholesale
market for mobile message aggregation, but delved into mobile payments just
over a year ago. Since then, Zdziarski said the company has had "great
success" worldwide, particularly in Africa, where a large part of the
population is "underbanked" or doesn't bank at all.
"But they have phones," Zdziarski said. "The
mobile payment approaches have taken off in the Third World first and has
caught up in the first world."
While losing the device would trigger security risks for the
user, they are similar to those of losing a wallet or credit card. The risk of
having an unauthorized purchase would remain until the user called the phone
provider and canceled the service, just as one would call to cancel a credit
card. However, most users lock their phones using a four-digit PIN, which helps
deter unauthorized purchases should the phone be lost—an extra layer of
security absent from a lost credit card, Zdziarski said.
While Zdziarski noted Payvia's clients primarily are business-to-consumer
organizations with a large consumer base, he said the payment option could be
integrated into corporate travel programs, as Payvia could be used for any
travel expense and most organizations already capture phone bills.
"This is really just an extension of that," Zdziarski
said. "Today you see the number of phone calls made, long distance
charges, local calls, SMS, MMS and on top of that, you would see transactions,
like internet charges at Kennedy Airport.
"I believe most of that integration already
exists, where corporations can track these costs," he said. "To me,
that's a relatively easy fit for companies to manage."