Vodafone is currently trialing a system to allow consumers to pay for goods and services, using their existing payment cards and bank accounts, over their mobile phones. The company hopes that the convenience of the system will attract customers, thus boosting its data revenues. However, it will need to ensure that people believe the service is secure.
Vodafone has launched its global mobile payment business trial.
Vodafone, the world’s largest mobile operator, has launched a trial of services that will enable customers to purchase both digital and physical products using their mobile phones. The mobile payment platform uses existing payment tools, such as debit and credit cards or electronic direct debit. Vodafone intends to expand the platform to service purchase points such as vending machines.
The system will identify customers by their mobile phone, and then confirm and authorize each purchase using a PIN code. Customer details will be kept on Vodafone’s system in a secure ‘wallet’ that is invisible to the merchants. Convenience is added as direct data entry over the Internet is not required. This is just as well: consumers will only be interested in the service if it makes their lives easier.
However, the issue of security is a key stumbling block for online/mobile payments and any problems will seriously damage consumer confidence. Previous consumer surveys have found that 88% of consumers will not complete transactions without some sort of security measure.
Trials have been launched in the UK, Germany and Italy, with additional countries to follow across most of Europe. If successful, Vodafone’s huge geographical reach and enormous customer base will help establish the service with both retailers and consumers alike.
Innovation is a major driver behind mobile phone sales. The new technology should help maintain Vodafone’s place as an innovation leader and will also improve its current drive to make more revenues from data services. But the company needs to convince consumers the service will be easy to use and secure.