The world certainly is a fast moving place, with change seeming to accelerate as time goes by. The advent of the internet and the development of the mobile phone have been two vital parts of this change, driving further technological and cultural revolutions. This process can be seen clearly in the introduction of today’s Pay by Mobile service.
Background to Pay by Mobile
In the early days of the internet, the ability to communicate and find out information improved exponentially. This happened almost immediately, but the ability to buy, sell and trade online took a little longer to develop. This was because it was difficult to make quick, secure and trusted payments online. Basically, financial services could not keep up with the pace of change required.
Then came eBay, the online market place, and its favoured electronic payment method, PayPal. This truly revolutionised online payments, enabling trusted and secure payments between vendors and buyers to be made virtually instantly, without any confidential financial information needing to be disclosed. This was, and remains, an excellent service: perfect for the days when most web based transactions took place sat at a desk in front of a big box desktop PC.
However, the early years of the 21st Century saw a less spectacular, but equally revolutionary development. Access to the internet became miniaturised. Improvements in screen technology, battery power and capacity, processing speed and memory storage meant that computer power became more and more compact and portable. Instead of being tied to a big unwieldy box in your office or living room, you could access all that computer power on a laptop, then a tablet or smartphone.
The final piece in the jigsaw was the improvement in the ability to access the internet remotely via Wi-Fi. Now you didn’t need to plug in to a fixed line phone signal either. These developments mean that today, the vast majority of online communications and transactions are conducted using a smartphone via Wi-Fi, with very few using the traditional old PC / phone line route. And this is where the ability to make payments using just your phone comes into its own…
The Advent of Pay by Mobile
The first practical introduction of a Pay by Mobile service came when Boku, an Anglo – American company, introduced its new service in 2009. The original idea came from some British entrepreneurs, based in Chesterfield in Derbyshire. They founded a company called Vidicom Ltd to develop their mobile billing service called Mobillcash. However, as is often the case with innovative British ideas and inventions, they struggled to find the investment funds necessary to fully develop their service.
And this is where the Americans come in. Venture capitalists based in Silicon Valley in California saw the potential in the idea, and the American company Boku was formed to take the service forward. The initial investment amounted to around $13 million, and the service was finally launched in 2009.
Further rounds of investment followed, allowing the service to develop and expand both in terms of the number of customers and transactions, and in terms of geographical expansion. The service soon reached the United Kingdom and Europe. Today it is extremely popular in most of Asia: it expanded into India in 2013, and is a major method of payment throughout South East Asia too. In Africa, it is also expanding rapidly, especially in areas where access to conventional banking services is difficult.
In November 2017, the company was launched on the London Stock Exchange AIM market, with an initial market value of £125 million.
Today, Boku has signed agreements with close to two hundred different phone carriers across the world, including EE, O2 and Vodafone in the United Kingdom. Their service is available in over fifty different countries and payments can be made in dozens of different currencies.
The 2017 financial year is the last year for which figures are available, and it saw another year of phenomenal growth. Firstly, the company’s annual transactions exceeded $1 billion for the first time. In fact, the total volume of payments reached $1.7 billion, tripling the previous year’s performance of around $550 million. The year also saw actual revenues reach over $24 million, a remarkable increase of over 40% on the previous year. The service now has over 8 million regular active account holders (those who make a payment at least once a month).
Boku has offices in the UK (London), France, Germany, Italy, Brazil, China, Japan, Taiwan and Singapore. It has its headquarters in San Francisco in the United States.
Why is the Service so Popular?
This mobile payment method is officially referred to as “carrier billing”, because your payments are charged to your account with your mobile phone service provider. For most customers, Boku payments will appear on their next regular monthly phone bill.
The service is especially useful for today’s market because customers can simply use the device they use every day to make their payments. There is no need to input long account numbers, or remember cumbersome PINs. The service is therefore convenient and secure: if you don’t need to give any of your personal financial details, your account cannot be subject to unauthorised payments, data theft, hacking or identity fraud.
It is useful for customers who do not have regular banking arrangements as well as those who do, but simply find making payments with their smartphone more convenient and secure. In fact, customers do not even need a contract phone to make Pay by Mobile payments: Pay as you Go phone users simply pay via their remaining call credit instead of via a regular monthly bill.
The service can be used to make payments for most kinds of goods and services available online – wherever it is accepted. The majority of transactions in practice are for virtual goods and services. These include services like music streaming, app stores, online gaming and movie subscriptions. This is partly because the service provider / retailer does not receive any real world address information (only your mobile phone number), so an additional registration is required to receive real world goods.
How Does Pay by Mobile Work?
Because every phone user has a unique mobile number, there is no need to pre-register for this service. Instead, customers just select “Pay by Mobile” at the checkout or payment page of their chosen online service. This will redirect you to the Boku payment page. The screen will ask you to confirm your payment amount and input your phone number.
Once you have done this, you will receive a text message asking you to authorise the payment. This is an additional security measure, to prevent anyone who has your phone number from using it to make payments. You then just reply “Y” to this message (there is no additional charge for this text). And that’s it! Your payment will either be added to your monthly phone bill, or deducted from your remaining call credit, as appropriate.
How much does the Service Cost?
Boku do not charge you when making payments, so in many cases it is completely free for you to use Pay by Mobile when paying for goods and services online. However, Boku do make charges to the person / company receiving your money, and sometimes these are passed on to you in the form of an additional charge.
For example, some companies deduct a proportion of your payment as a fee. As an example, if you were to deposit £10, a company may charge a 15% fee, so you would only actually be credited with £8.50. This means you should always check the Terms and Conditions of the site you are dealing with so that you are sure of the situation.
There are usually restrictions on the maximum amount you can deposit too, a bit like with contactless payments. This is partly a security measure, but also to prevent large debts being built up on your mobile service provider’s account. There is therefore, usually a maximum limit of £30 per day for Pay by Mobile transactions.
Pay by Mobile is a quick and convenient way to make payments when on the go using your smartphone. And because you do not need to disclose any of your personal financial details, it is also very secure. Just input your phone number, reply to a text and you’re done! Just keep an eye out for any unexpected fees or charges and it really is a great way to make deposits and payments online.