Industry Insiders Say Billing Gaining Ground for Mobile Content Payments

A survey of about 100 mobile and broadband executives indicates the wireless bill is rapidly gaining support as a vehicle for handling payments for digital-content downloads to mobile devices in the U.S. But at the same time the executives expressed doubts about the prospects for payments via near-field communication (NFC) technology in the near future. More than 75% of executives canvassed at an industry trade show last week said customers pay for mobile content on their monthly bills. Nine percent said consumers use credit and debit cards, while just 7% indicated premium short-message-service transmissions (SMS) as a choice. Premium SMS has been a leading payment method for digital downloads, but the survey appears to show waning support for it. Digital downloads to mobile phones generally include products such as songs, games, video clips, and graphics. But in the survey, conducted by Valista Ltd., a payment processor for providers of digital content to handsets and PCs, some 78% of the executives said credit and debit cards, along with PayPal, remain the dominant form of payment for content delivered via broadband connections to PCs. Other payment methods mentioned regarding this channel were monthly billing and ad-supported content. Valista, which counts mobile network operators U.S. Cellular, Cricket, and NTT DoCoMo among its clients, has offices in San Mateo, Calif., as well as Dublin, Ireland. The respondents also voiced considerable skepticism about the near-term outlook in the U.S. for NFC, a form of contactless payment designed to allow consumers to pay for items at the point of sale by waving their mobile phones near readers linked to POS devices. More than half said it will be five years at least before NFC payments are “widely used,” says Valista, which also cites a study by Juniper Research indicating that, by 2013, one in five handsets will be equipped for NFC transactions. Valista conducted the survey at Building Blocks 2008, a conference in San Jose, Calif., sponsored by Digital Hollywood and the Consumer Electronics Association. Attendees also included representatives of the social-media, communications, and entertainment industries.