Editors Note: Glenbrook, along with the rest of the payments industry, has been watching developments in mobile payments closely. A few weeks ago, our partner Carol Coye Benson profiled Boku and CashEdge products. Today, she takes a look at Canada’s Zoompass, Zong, Billing Revolution (below), and Blaze Mobile. [UPDATE Aug 6th: Be sure to check out Carol’s latest installment on Obopay, one of the original mobile payment pioneers.]
Billing Revolution is an interesting emerging back-end player in mobile payments. I spoke last week with co-founder Mike Dulong.
Billing Revolution’s helps eCommerce merchants establish a mobile presence: “like web checkout optimized for the phone”. Once a merchant chooses to use Billing Revolution, BR then supports, behind the scenes, the process of capturing credit card information. Another way to think of this is as a payments gateway for mobile online purchasing.
BR prides themselves on having created a very simple product/process for the merchant – their goal is to enable the merchant to easily conduct mobile transactions.
The approach is entirely based on browser access to purchasing sites. When the consumer wants to buy something, they are presented with a screen asking for credit card data. BR manages the process of collecting the data (it is encrypted and reportedly fully secure; BR is also “PCI Compliant”) and passing it on to gateways or acquirers. (Most typically, they are not the merchant of record, although apparently there are some situations where they are.)
After the consumer enters the credit card data, they are taken to a screen giving them what Mike referred to as “CRM Options” – canceling the order, getting a receipt, etc. BR is invisible to the consumer; there is no consumer registration process or visible account with BR.
In contrast to many of the mobile payments products for online purchasing (usually of digital goods) , the operator is not a direct participant in the service and gets no revenue other than whatever consumer revenue comes from web access.
BR has two pricing/service models – the first is for mobile merchants who do not already have a merchant account. For these customers, BR handles the full payments process The pricing in this model is 3.5% plus 50 cents per transaction, with no other charges. For mobile merchants who already have a card acquiring account, there is a second service model priced at 50 cents per transaction.
BR has a “mobile single click” process. If a customer clicks “remember me”, BR can identify them the next time they visit that site, saving them from having to re-enter their card data. Technically, they can enable this for a consumer visiting another site, as well – but Mike appreciates that there will be a need to support consumer options here (change card number, block certain sites, support multiple cards, etc) – exactly how will best be done is still evolving.
BR is investing heavily in security & fraud management capabilities. They can identify risky transactions, and apply additional control measures to limit risk.
Their current customers are all selling digital goods. BR’s immediate value proposition is a very different pricing model than the current operator-centric pricing (40% to 70% of gross), as well offering merchants a fully secure, PCI compliant mobile payments platform. Of course, they can’t compete with the operator-centric payments products in terms of marketing or consumer coverage. As an interesting data point, their average purchase price is $11.
The current product can support physical goods as well, and Mike thinks they have a big opportunity with physical goods eCommerce merchants. Many eCommerce merchants, according to Mike, “have not yet thought through the issues around mobile credit card payments”. They are in discussions currently with several of the eCommerce platform providers, as well as some of the big physical goods eCommerce merchants.
At Glenbrook, we’ve been fascinated by the gateway model for some time. The word is used to mean different functions within different parts of the payments industry. At an abstract level, you can say a gateway is a “front end to a front end” in the payments process – a highly specialized piece of value-added processing tailored to the needs of a particular merchant vertical, or, in this case, to a particular form of commerce. What is generally true is that this is a profitable business model – which will make it particularly interesting to watch BR’s progress.