How Mobile Candy Dish Combines Handset-Based P-to-P with NFC

A 3-year-old startup in Alameda, Calif., is introducing a mobile wallet that combines contactless payments based on near-field communication (NFC) technology with person-to-person payments and mobile banking. Mobile Candy Dish Inc. last week rolled out its Blaze Mobile Wallet, which works on the AT&T Mobility and Sprint Nextel wireless networks and features an NFC sticker linked to a prepaid MasterCard account. The new wallet product combines mobile-banking and ?payment features that many banks and processors have been introducing separately. Processors like PayPal Inc. and Obopay Inc., for example, have rolled out P-to-P products based on handsets, while the bank card networks and the wireless operators, as well as processor First Data Corp., have launched several pilots for NFC, a technology that allows consumers to pay for goods at the point of sale by tapping or waving their mobile phones on or near a reader. With a paucity of handsets in the market equipped with NFC chips, the Mobile Candy Dish offering relies on an NFC component that adheres to the back of the phone. The component is about the size of a quarter and has a thickness equal to about two dimes, says Eddy Crochetiere, marketing manager for Mobile Candy Dish. Transactions settle against the prepaid MasterCard, which consumers can load at a Mobile Candy Dish Web portal called My Wallet. A plastic card to go with the account is optional. With the NFC sticker affixed to the phone, the device can perform contactless transactions at any of the estimated 40,000 merchant locations that accept contactless bank cards. Crochetiere says the sticker is a transitional technology to allow NFC transactions to take place until handset makers are able to gear up to produce commercial quantities of phones with built-in NFC capability. When this happens, consumers will be able to load other accounts into the wallet that they may have been using with a contactless card. By relying on a sticker, Mobile Candy Dish is following a strategy similar to one being used by Princeton, N.J.-based Heartland Payment Systems, a merchant processor, in a mobile-payments program it is running for Slippery Rock University. In this program, students and faculty use cell phones with NFC stickers to pay for products ranging from vending-machine items to goods at off-campus merchants (Digital Transactions News, Aug. 22, 2007). Supplementing the NFC capability is a mobile-banking and P2P service that allows consumers to pay bills, transfer funds, and do balance inquiries. Users of this service must be customers of any of some 8,000 financial institutions accessed by Redwood City, Calif.-based Yodlee Inc., whose aggregation technology Mobile Candy Dish uses to support its wallet software. Mobile Candy Dish charges consumers $4.99 per month to use the wallet, though Crochetiere says there are no per-transaction fees. Crochetiere declines to project how many consumers Mobile Candy Dish expects to adopt its wallet, in part because the company is in negotiations with wireless carriers to make the application a so-called on-deck service. On-deck applications are those the carriers feature on the first screens they present, leading to more likely adoption and use. The company's first product, introduced in 2006, is called Movie Candy, which allows consumers to use their phones to look up movie listings, get directions to a theater, view film clips, and pay for tickets. Users buy tickets by charging them to a card they've enrolled through the Web portal. They receive on their phones a bar code or numerical code they show at the box office when they arrive. The service, supported by movietickets.com, carries a $1 fee in addition to the price of the ticket. Because Movie Candy is part of the on-deck negotiations the company is pursuing, Crochetiere will not divulge how many users the product has attracted. Movie Candy is part of the new wallet product, as are other features, such as an application that manages frequent-flyer and other loyalty balances and keep electronic coupons.