Using a phone to pay will become increasingly common in the future
Danny Bradbury
Sun
Jen Pederson was always getting parking tickets. The Saskatoon-based founder of freelance copy-editing agency Second Set of Eyes got caught without change for the meter while travelling to meetings with clients. But when Saskatoon became the first Canadian city to test-trial parking meter payments by mobile phone, it allowed her to solve her parking problems even when she didn’t have a loonie handy.
“Now I just dial a number and my parking’s paid. I don’t have to scrabble for spare change,” she says.
When Pederson reaches a meter, she calls a number provided by Calgary start-up New Parking and enters the parking meter’s ID. The system logs her as having parked and charges her credit card (it can also charge a debit card). Parking meter attendants using wireless devices will know she has paid, and won’t ticket her. When she’s done, she calls the number to end the transaction, which ends anyway after a maximum of two hours. She can even use broken parking meters this way.
Using your cellphone to pay for goods and services will become increasingly common in the future. Mobile phone companies already sell products to consumers via cellphones but they are electronic products designed to be delivered over a network, explains Roger Parks, vice-president of global products for QPass, a company that sells billing systems for mobile phone payments.
Selling ringtones, screensaver pictures and games for phones is one thing. The real trick will come in paying for other goods and services not designed to be delivered over a network.
“Those are consumable third-party goods where returns are not an issue. Parking meters will be the first one, and tickets for events will be the next one,” Parks says. It’s easy to imagine a future in which you buy a ticket online and present a code on a mobile phone screen to a ticket agent at an event, for example.
The third category will be low-priced physical goods such as coffee and items from vending machines, and the last and most challenging category will be “hard” consumer products, where product returns must be dealt with. “You’re talking fuzzy slippers and basketballs,” he quips.
Bell Mobility, Telus Mobility and Rogers Wireless are already preparing for mobile payments. Last November they formed Wireless Payment Services (WPS), a joint venture to develop a standard payment-processing system for mobile e-commerce.
It made more sense for them all to iron out the technical challenges together rather than reinventing the wheel with three separate systems, explains WPS president Jeff Chorlton.
“Once the consumer hits the checkout button on their mobile shopping mall or cart they would be routed to WPS,” he says.
“This will enable the consumer to finish the payment process using their debit or credit card, or another payment instrument.”
In the third quarter of 2006, WPS will launch the first phase of its service, enabling wireless users to top up pre-paid cellular accounts using their mobile phones. In the future, the system will go much further, essentially serving as a phone-based version of cards such as the commonly used Interac debit card. “We will marry the usage of credit cards and debit cards with the mobile device,” says Chorlton. “There will be no physical card to do the transaction.”
Over time, the system will enable customers to buy physical goods and services. For that, the system will require new features in mobile handsets. A promising technology is Radio Frequency Identification (RFID) — a small radio device that can communicate with readers nearby.
“You’ll have a terminal, and a more intelligent handset that you will wave at the terminal,” Chortlon says. “The user will then be prompted to enter a pin number. That is ultimately what we’re looking at.”
North America is lagging far behind European countries like Finland, where customers have been able to pay for items like chocolate from vending machines for years.
As for Jen Pederson, she’s happy about not having to pay parking tickets anymore, but she has also developed a new and unsettling relationship with her phone.
“For a while I was getting SMS messages offering discounted rates at parking lots around the city,” she says, amused. When your parking meter starts stalking you and suggesting other meters you might like to try, it’s a sign the system may be getting just a little too smart.”
© The Vancouver Sun 2006