Obopay Says Response ‘Super Positive’ for New M-Commerce Platform

Mobile-payments processor Obopay Inc. expects to have at least 20 merchants accepting transactions through its new platform by the end of the year, a top executive with the Redwood City, Calif.-based company says. Obopay introduced its so-called mobile merchant platform, which extends the 2-year-old processor's reach beyond person-to-person payments into mobile commerce with online sellers, last week at a major wireless trade show. Reaction from merchants so far has been “super positive,” says Howard B. Gefen, executive vice president for marketing and business development at Obopay. “They see the potential. They want to try it out and see if it improves their conversion rates.” The first two merchants to sign on are Xringer Inc., a marketer of ring tones and other music-related items, and Cellfire Inc., an online marketer that provides digital coupons to mobile phones. Gefen says Obopay is in talks with Soapbox Mobile Inc., a mobile marketing firm that helps sell movie tickets, among other merchandise. “We're working with the first several to get it right,” says Gefen. “Then it'll be programmatic.” Obopay lets handset users pay other individuals and now merchants via prepaid accounts, allowing for what Gefen calls real-time settlement. “It's all about real-time mobile payments,” he says. The company hopes this will appeal to online merchants confronted with credit cards and short-message-service (SMS) billing, both of which are relatively expensive, as their most likely payment alternatives when they move to m-commerce. The platform, which the processor is billing as Obopay Checkout, is aimed primarily at sellers of impulse items and digital content and marketers of events and venues. Sellers will create mobile applications that users will access on their handsets. Xringer, for example, could use Obopay Checkout to peddle concert tickets and band-related merchandise, such as T-shirts, to customers armed with mobile phones. Customers can have the items shipped to the addresses on file with their Obopay accounts, or pick them up by showing a bar code and transaction code sent to their phones. But the processor, which relies on the cooperation of wireless carriers, will not target digital-content merchants that use wireless carriers to handle their billing, says Gefen. Carriers typically levy 30% or more of the sale in transaction fees, a business Obopay doesn't want to interfere with. “We're very mindful of the carriers,” he says. “The carriers are our partners.” Obopay Checkout's merchant fees are not disclosed, though Gefen says they will be “very compelling.” Merchants that sign on early, he says, “will get quite the break.” Obopay may soon see heavy-duty competition in the race to sign up merchants. Online payments kingpin PayPal Inc., which launched its PayPal Mobile service a year ago, told Digital Transactions News early last month that it planned to unveil an m-commerce version of the product soon (Digital Transactions News, March 1).