Two of the world’s most notable mobile commerce startups, Network365 Ltd. and iPIN, announced today they will blend into a new player, Valista, a move company officials said will create a dominate payment provider covering more than 150 million subscribers.
The ambitious combination could pave the way for a true market for mobile commerce, but company officials admit it won’t be easy.
“We hope (Valista) will become a de facto global standard,” said Raomal Perera, head of Network365 and chief executive officer of Valista. “We want to drive standardization. Ultimately, a couple of people may do it-and other people will follow.”
Valista faces a wide range of challenges in rallying the global industry behind its standards. Mobile commerce has long been a dream of wireless visionaries, those who foretell of a service that would encourage users to supplant their credit cards with mobile phones. But so far the reality has been much different, with most m-commerce companies shutting down or moving to other markets. European m-commerce company Paybox earlier this year shuttered its consumer service, which counted 750,000 customers.
That’s not to say that the mobile commerce market is dead-Hong Kong’s six local wireless operators formed their m-Cert Implementation Forum for m-commerce standards; Orange plc, Vodafone Group plc, T-Mobile and Telefonica Moviles teamed to create Simpay, a joint venture to create a common payment platform in Europe; and Nokia Corp. conducted a payment trial with MasterCard International. Indeed, Frost & Sullivan predicts trade worth $25 billion will be generated through mobile payments in 2006, which would be about 15 percent of online e-commerce spending.
Thus, there is potential in the market, those in the industry agree. But the sheer difficulty of rallying the various players-from banks to credit-card companies to carriers to handset makers-presents major hurdles. The divergent m-commerce standards organizations alone offer a challenge, as the Open Mobile Alliance, the Mobile Payment Forum, PayCircle and others all claim a stance in the market.
Nevertheless, Valista has high hopes for the combination of Network365 and iPIN. Together, the companies count a wide range of customers, from General Motors to MmO2 to NTT DoCoMo, as well as thousands of participating merchants. The company’s m-commerce service essentially stores user payment information in a carrier’s network, and works on both wireless and wireline networks. Thus, mobile-phone users can purchase wireless content or even retail goods through a phone’s Internet browser without inputting their financial details. And desktop computer users can download software or purchase books and music through a prepaid account, also without inputting their payment details. The service could even cover point-of-sale purchases, with mobile-phone users transmitting credit-card information through infrared with participating shopping stores.
“How do you deal with small change in a digital world?” asked Alexandre Gontheir, iPIN’s chief executive. He said Valista is hoping to light the way.
