Valista Ltd. is vying for more space on the mobile payments playground with a hosted, WAP-based offering for carriers in the United States and Europe.
The Dublin, Ireland-based developer this week plans to unveil a new platform designed to serve as a bridge between third-party vendors and the billing infrastructures of network operators. The service supports both one-off and subscription models, and allows carriers to restrict access to content based on user profiles.
“In a direct-to-bill model, operators need additional infrastructure such as a payments gateway … to complement their existing billing systems, allowing external access by aggregators and merchants through a robust payments-oriented interface,” said Chief Executive Officer Raomal Perera.
Valista’s new offering is the industry’s latest attempt to move away from premium SMS billing, which many analysts believe to be cumbersome and costly. Indeed, some European marketing companies claim that nearly half of consumers who respond to a campaign with a text message to a short code get lost along the way and fail to complete a transaction.
PSMS, which can be an unreliable billing mechanism, is responsible for much of the revenue leakage that continues to plague the mobile content industry. Third-party wireless transactions can lead to problems with charge-backs, late payments and customer refunds, and it’s often network operators left holding the bag. Market research firm iGillottResearch predicts revenue leakage could grow as high as 23 percent by 2009, with carriers losing more than $18 billion annually.
More sophisticated wireless offerings are exposing those shortcomings, according to Valista Chief Technical Officer Fran Heeran. “Richer content is putting a premium on SMS’s ability to handle billing,” Heeran said.
And savvy young European users are actually tricking the system, Heeran said. Teens and young adults have figured out how to order a ringtone from a third-party vendor and turn their phone off before they receive the incoming text message. They turn the phone back on later and receive the ringtone, but somehow dodge the charge.
The key, according to Valista, is to provide a platform that allows the breadth and scale of off-deck content while it gives carriers the ability to control offers and ensure billing accuracy.
Qpass, a Seattle-based competitor of Valista that was acquired earlier this year by Amdocs Ltd. for $275 million, launched its effort to address revenue-leakage problems in July with its own Web-based offering. While content providers who waded into wireless early struggle with revenue leakage, others bide their time while the industry irons out the wrinkles of direct-to-consumer models.
“The media companies (with active storefronts for mobile content) are not only getting paid late, they’re sometimes receiving only 70 or 80 percent” of the revenue they’re due, Amdocs executive Steve Shivers said on the launch of Qpass’ product. “Many media companies that would otherwise be ready and eager to invest in the mobile channel are still sitting on the sidelines” because of such issues.
Both Valista and Qpass hope not only to encourage more vendors to enter the market, they’re looking to tear down the silos of mobile content and spur bundled content offerings. Licensing hassles and revenue-share issues have long been hurdles for such efforts, as boilerplate agreements are ineffective when trying to package content from a number of different providers.
But the new payment platforms could address such issues, allowing an operator to offer a ringtone from Eminem, for instance, with the mobile game Hot Secretary from BlingTones.
