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Mobile payments: Wireless carriers angle for position

Many players in the telecom, mobile phone, financial services and retail industries sense opportunity in turning your phone into a wallet. How nice it would be, they think, to just wave your phone near a cash register and pay for groceries, or to send your kid some money by just thumbing a text message?
It’s a dream that has remained elusive, in no small part due to the conflicting agendas of the players in each of the major links of any future mobile payment system.

zoompass-mobile-and-card Now, though, the three major wireless carriers are staking their turf. Today at the Canadian Telecom Summit, Zoompass was publicly launched by EnStream, a joint venture of Bell Mobility, Rogers and Telus. While the service is mildly interestingit’s simply a way for people to transfer money between Zoompass accounts by SMS text message, with money also available on a special MasterCard PayPass cardwhat makes this something to watch is how it positions the carriers to call the shots in any more elaborate mobile transaction system.
I chatted earlier this afternoon with Robin Dua, CEO of EnStream. He was lured to Toronto a little more than two years ago from ExxonMobil Corp.’s Speedpass Network initiative, so has pedigree in the contactless payment industry.
A couple of things jumped out from the conversation. First, he thinks that EnStream, because it is closely associated with the three wireless carriers that command 95% of the Canadian marketplace, is in the best position to eventually bring the various parties together, bridging the technological challenges in the wireless network, the mobile handsets, and the business model of processing these financial transactions with banks or credit card companies. But he admitted that there is much to be worked out regarding how revenue sharing would work.
The second thing that strikes me: Dua made it clear that Bell, Rogers and Telus have little interest opening up EnStream to the other new carriers that will soon enter the Canadian marketplace. Globalive, DAVE Wireless, and Public Mobile will be without this kind of application on their phones. Considering the Zoompass service is just starting, it is too early to raise a fuss over the anti-competitive implications of this position, but it could prove to be an issue in the future.
Zoompass will take some work. It’s mostly targeted to smartphones, like the BlackBerry, iPhone and phones running Google Android, and consumers with more commonplace phones will need to open up a mobile browser and could incur data charges in addition to the transaction fees (50 cents, or 3.5% if the money is coming via a credit account). And it will take a lot of marketing to get people to know about the service.
But EnStream is clearly hoping that early gains in this field will let it call more of the shots with all the other players so keen to replace wallets with phones.