Yet another wireless startup is diving head-first into the mobile payment waters this week, as Secure Wireless Transfers Corp. plans to team with the Association of Surfing Professionals for its coming-out party.
The Orange County, Calif.-based company will introduce “KushCash,” a system allowing consumers to transfer funds with other users and purchase goods and services using their phones. Surfers at this week’s U.S. Open of Surfing in Huntington Beach, Calif., will receive prize money in KushCash accounts, and attendees will be encouraged to download the application to their phones.
The firm joins digital transaction giant PayPal Inc., which expanded into wireless earlier this year, and Obopay, another California startup that last week unveiled a partnership with mobile virtual network operator Amp’d Mobile Inc. TextPayMe, which launched late last year, rounds out the already-crowded playing field of mobile payment companies.
While PayPal and TextPayMe focus on text message-based payments, both Obopay and SWT are targeting the coveted 18- to 34-year-old market with a downloadable application that requires users to set up stand-alone accounts. Both firms offer technology that is interoperable with back-end banking and credit-card systems, and both offer debit cards that enable users to access funds from ATMs.
“Obviously, there’s been some competition in this space,” said Peter Hewitt, SWT’s interim chief executive officer. “Quite frankly, we know that it’s a market that’s going to explode.”
Perhaps. But all four players face a major challenge in garnering partnerships with major carriers. Several operators have policies forbidding the use of credit cards or other billing methods, requiring third parties to bill through monthly carrier statements in an effort to control revenue shares.
PayPal is backing its service with a “Text2Buy” promotional campaign, and the company’s deep pockets and substantial brand recognition may allow it to thrive without operator partnerships. Such agreements likely will be crucial for the other three players, though, who will likely need deck placement to present themselves to users.
SWT is working to raise $12 million in capital, Hewitt said, and the company hopes to create a buzz at youth-focused events like this week’s surfing competition. And while the Tier 1 operators may not be willing to play along, Amp’d Mobile’s partnership with Obopay illustrates that the new mobile payment companies have other avenues to come to market.
“We’re not only linking our service through affiliations (like the Association of Surfing Professionals), we’re also getting to MVNOs and handset manufacturers,” he said. “Our hope is to create a buzz and interest in this market until (operators) see that this is the future.”
