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Sprint moves mobile payments needle with carrier billing

On the heels of the Sprint mobile wallet launch, the carrier is increasing the options for its subscribers to pay for online digital goods via their wireless bill.

Sprint is partnering with Danal Co. Ltd.’s BilltoMobile, a provider of mobile payments for Web purchases, to power the direct mobile billing gateway service, which will let the carrier’s customers charge online purchases directly to their Sprint bill. Once implementation is complete in the coming months, merchants and payment resellers using BilltoMobile’s mobile payment service will be able to offer this payment option to Sprint customers. 

“The strategy is to enable a new market in the online transaction space by leveraging the Sprint monthly statement as a payment/billing option,” said Chris Bierbaum, general manager of mobile commerce at Sprint. “Enabling the monthly Sprint statement as a payment option brings added convenience to the online transaction process for our subscribers.

“Direct mobile billing through Danal/BilltoMobile simply provides customers with another option for purchasing online digital goods and services that is convenient and secure,” he said.

“Our Sprint mobile wallet product, in partnership with Cardinal Commerce, allows Sprint subscribers to buy goods and services discovered on the mobile device by charging the transaction to their preferred credit card stored in the Sprint mobile wallet.”

BilltoMobile enables mobile payments for digital goods and services on Web browsers. Its strategic investor and majority shareholder is Seoul, South Korea-based Danal Co. Ltd.

In the U.S., several of its merchant partners are gaming virtual-worlds companies such as Nexon, NHN and IMVU, which offer virtual goods.

Carrier billing on the rise
The agreement with Sprint extends BilltoMobile’s overall reach to more than 240 million wireless subscribers in the U.S. across multiple carriers, including Verizon Wireless and AT&T.

These customers will now have instant access to a direct mobile billing platform offering a payment option that BilltoMobile claims requires no registration, no set up, no application or downloads and no association with other financial instruments such as credit or bank cards.

Purchases are completed using a two-step authentication process, where consumers enter their mobile phone number and ZIP code.

Customers do not have to expose any sensitive account information while using the service.

“Mobile payments has evolved from being able to charge mobile content purchases and premium messaging services directly to the Sprint bill to being able to pay for physical goods using a mobile application like Sprint mobile wallet that stores the user’s preferred credit cards, or using the Sprint monthly statement as a payment option for not just mobile content but online content as well,” Mr. Bierbaum said.

BilltoMobile’s direct mobile billing platform involves real-time direct connections with the carrier’s billing system, advanced carrier-direct authentication systems and a direct real-time connection between the BilltoMobile service and the carrier’s customer care systems.

Carriers to-date have set mobile billing limits of $25 per subscriber, per month, but BilltoMobile expect those limits to increase in the earlier part of this year, perhaps as high as $50 per month.

“Carriers looking to boost revenue and use this as a branding tool to inspire consumer loyalty,” said Jim Greenwell, president/CEO of BilltoMobile, San Jose, CA. “We’re trying to leverage something that Sprint and other carriers do very, very well—aside from the powerful wireless networks, the piping, they also do billing very well.

“Sprint sends out about 50 million bills a month—they do it very efficiently, and so do the other carriers,” he said. “That is a very complicated system that they have down very well.

“We are leveraging what Sprint already does very well and applying it to impulse purchases of digital goods—consumers don’t want the friction of having to enter their credit card number.”

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily