New “payments club” goes live in Q107

Processing payments by mobile has long been one of the industry’s big hopes, but after years of trying, there’s still very little to show for it but a succession of failed projects and a variety of kludgy fixes like premium SMS.

Payments specialist Upaid hopes to change this, as its senior VP sales, Richard Owen told the, by integrating mobile devices into existing banking systems, rather than trying to invent new ones. “We’d rather use real banking and payments processes than imitate them,” he said.

Hence, a new product – ValU, a hosted “payments club” solution that connects with VisaNet and other providers’ back-office systems at one end, and mobile subscribers at the other. It’s planned to go live in early 2007. The key features are that customer data is not exposed to the merchant or other third parties, being communicated only between Upaid and the user, the whole thing is compliant with VisaNet specifications, and everything is encrypted to 128bit SSL, with 3DES being included in later upgrades.

Although the user interface with a merchant is set up over the mobile data link, the communication between the subscriber and Upaid is carried as an SMS message, thus providing out-of-band authentication, so neither the SMS nor the mobile web session contains enough information to attempt a fraud.

A bitter point of contention between network operators and merchants has been the time taken to pay up and the percentage of the take that goes to the operator. Horror stories of payment taking up to 90 days are not unknown with pSMS. Upaid claims its new product can complete a transaction within 20 seconds, and eventually settle the bills weekly. For debit card transactions, they expect to charge a flat rate of £0.50 – £0.80 pence per transaction, with credit card payments being charged at 7 per cent of value.

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