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Verizon Set To Launch Mobile Payment Service

Soulskill posted more than 3 years ago | from the reaching-in-our-wallet-from-within-our-pocket dept.

Cellphones 50

CWmike writes "Verizon Wireless announced on Monday that customers will soon be able to charge up to $25 a month in online purchases to their accounts. The service, based on technology created by Danal, will require text messaging-enabled phones, and that purchases be made from Verizon-approved online stores, which include game sites and social networks. It will require that customers click a BilltoMobile button during checkout from a participating online Web site. Users will be asked to input their mobile numbers and mobile billing zip codes for authentication. Once the user is authenticated, a one-time passcode will sent to his or her phone. The number is then input into the online checkout window. At that point, the transaction is complete and the charge will appear on the customer's monthly phone bill. GigaOm writes, 'If Verizon can get people accustomed to putting in their phone numbers instead of credit cards while shopping online, then it could own a critical element in building an application and services platform that spans the wired and wireless world ... Much like Apple has such a large stake in the mobile application and commerce space today because it has millions of credit cards in iTunes, Verizon could be expanding its own payments information for a similar goal.'"

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Just enough for (0, Offtopic)

ickleberry (864871) | more than 3 years ago | (#31576692)

A 25 dolla hooker :D

Re:Just enough for (1)

gmhowell (26755) | more than 4 years ago | (#31578990)

Even better: 25 $1 hookers...

Given they sell payment conduits in phone form... (1)

sethstorm (512897) | more than 3 years ago | (#31576730)

I'm not surprised.

Verizon: We never stop working you.

Re:Given they sell payment conduits in phone form. (1)

davester666 (731373) | more than 4 years ago | (#31578766)

I assume Verizon will take their usual 60% cut...

In other words (4, Interesting)

EdIII (1114411) | more than 3 years ago | (#31576734)

Verizon has found a way to get hordes of parents with pitch forks and torches to come to their corporate offices and gruesomely kill them.

You notice they start at with a $25 limit? How convenient. Scam sites like those who conspired with Zynga (Mafia Wars & Farmville) have been scamming by getting people to subscribe via the text messaging service. Now Verizon is basically expanding that by allowing POS purchases in addition to monthly subscription fees and per text billing through messaging.

It really is the parents who will get screwed with this and go more insane at Verizon (and other carriers) when their kids get stupid or scammed into making purchases via their phones. Most adults are not subscribing to the ridiculous, and more importantly, misleading offers that make money by nailing you with subscription fees through the text messaging system.

Lol. Seriously? Will someone not think of the children??

Re:In other words (3, Insightful)

postbigbang (761081) | more than 3 years ago | (#31577236)

If they don't have an opt-in, I'm sure they'll get sued.

OTOH, for those that will want to pay Verizon's usury, it's fine. Other countries have been using phone payments somewhat successfully for a long time now.

Re:In other words (0)

Anonymous Coward | more than 4 years ago | (#31581984)

Just wait. First they clone your cell then they make LOTS of $25 purchase's. Hmm identify theft and credit card fraud just found a whole new playing field

Terrible for consumers (1)

MoxFulder (159829) | more than 4 years ago | (#31583648)

Like most other alternative online payment methods (*cough* Paypal *cough*), this one is a terrible deal for consumers.

In the US, especially after the Credit CARD Act of 2009 [wikipedia.org] , you get a huge array of benefits for using a credit card:

  • Strong, federally-mandated protection against fraud and bait-and-switch (in most cases, the card issuer and merchant duke it out over chargebacks, and the consumer owes nothing).
  • Limits on interest rates and fees
  • Most decent cards these days offer cash back/rewards... I get about 2% back overall via judicious mix of 3 cards.

Anyone with less-than-awful credit can get a credit card with no annual fee and pay it off monthly, thus incurring no interest or fees ever. Just use it as more convenient cash, rather than as credit. You have to get a credit check for Verizon cell phone contracts in the US too, so the bar for a credit card is not too different from that for Verizon's payment system.

With Verizon's payment system, you get none of these as far as I can tell. Credit cards have gotten too competitive, and thus unprofitable for issuers, and so they've invented newer and sketchier payment options designed to lure gullible and disadvantaged consumers. Shameful.

Re:In other words (1)

Jer (18391) | more than 4 years ago | (#31584300)

Most adults are not subscribing to the ridiculous, and more importantly, misleading offers that make money by nailing you with subscription fees through the text messaging system.

CITATION NEEDED.

Show me the data then I'll believe it. My own personal experience indicates that the "kids" are no more and no less savvy when it comes to stuff like this and its their elders who keep getting conned by scams. Like "legitimate" credit card companies that charge usurious rates, banks that offer mortgage deals that really are too good to be true, and other misleading things like that. Or, in the worst cases, the folks who continue to believe that there's some ex-prince in Nigeria who really needs to get a lot of money out of the country quickly and is willing to give you a cut if you just help him out...

Give online vendors my MOBILE NUMBER? no no no (3, Interesting)

Anonymous Coward | more than 3 years ago | (#31576744)

I try to set up a separate email address for each vendor to communicate with, so I know how spammers got it. It's bad enough that Paypal insists on disclosing my payment address to the vendor for routine transactions (it should disclose it only in the event of a formally registered dispute) so I get spammed to my Paypal address. Giving online retail sites my private cellular number that can accept text messages is just about the last thing I'd allow. When I have to give a phone number to a vendor, I give a 24/7 voice mail number that emails me a .wav file of the voice message.

I do have a hell of a lot of prepaid Verizon mobile minutes but I doubt this scheme would let me use them to buy stuff online.

Re:Give online vendors my MOBILE NUMBER? no no no (0)

Anonymous Coward | more than 4 years ago | (#31645648)

Why bother setting up multiple accounts?

http://en.wikipedia.org/wiki/E-mail_address#Sub-addressing

And in Europe we've had this for ages already... (1, Informative)

Anonymous Coward | more than 3 years ago | (#31576758)

...I recall paying for stuff from vending machines with my phone in 2000. And since then for everything from tram tickets to premium content on web sites.

Since this is such a simple thing to implement I'm very surprised, if you indeed haven't had it before on the other side of the pond.

Re:And in Europe we've had this for ages already.. (1)

Haxx (314221) | more than 3 years ago | (#31576866)

Bold faced lie. 2000? Not a chance.

Mod this one up for Humor.

Re:And in Europe we've had this for ages already.. (1)

Dunx (23729) | more than 3 years ago | (#31576926)

No, 2000 sounds about right. There were SMS payment systems in place in the UK before I moved to the States in 2001 and was nauseated* by the state of mobile telephony here.

[*] I exaggerate for comic effect - I really don't care enough about mobile phones to feel sick at their poor state in, ahem, the States, but it was shockingly backward then.

Re:And in Europe we've had this for ages already.. (1)

ickleberry (864871) | more than 3 years ago | (#31577000)

I know they had them at Eircell (since assimilated into vodafone) in 2000 or possibly even 1999 but had to get rid of them because employees who had their bill paid by the companies were using them too much.

Re:And in Europe we've had this for ages already.. (3, Informative)

thpr (786837) | more than 3 years ago | (#31577058)

2000 is entirely plausible. Sonera installed the first set of mobile enabled vending machines selling Coca-Cola at Helsinki-Vantaa airport in 1997. Read the Background section at the bottom of this 2002 article [findarticles.com]

Re:And in Europe we've had this for ages already.. (1)

Midnight Thunder (17205) | more than 4 years ago | (#31577790)

I wouldn't be surprised if it wasn't a bit earlier. Around 1997 I can remember watching a program in the UK on how you could use your cell phone in Japan to pay for goods in a vending machine (see here [wikipedia.org] ), though I can't remember whether it was only in test phase. When I visited Australia in 2005 you could use your cell phone to pay for parking [nsw.gov.au] .

The truth is North America behind when it comes to what people can do with their cell phones. They are only now starting to catch up. I believe the Qualcomm CDMA / GSM divide wasn't helping things.

As for web sites with concrete dates that I could show you, C-mode appears to a compatible technology: http://eurotechnology.com/market_reports/imode/faq-cmode.shtml [eurotechnology.com] and that was field tested in 2001.

BTW As for what you can do with vending machines in Japan: http://www.photomann.com/japan/machines/ [photomann.com]

Credit Cards (0)

Anonymous Coward | more than 4 years ago | (#31577690)

Credit/debit cards were much more common in the United States than Europe in 2000. Mobile payments are great but not such a huge upgrade from card payments; it's revolutionary if you used cash, evolutionary if you used cards.

Sounds complicated.... (1)

Nexzus (673421) | more than 3 years ago | (#31576824)

Sounds complicated. Entering received passcodes? Whatever happened to entering your credit card number? Wonder if it's opt-in, otherwise parents are going to love this.

Give someone else's number (1, Interesting)

Anonymous Coward | more than 3 years ago | (#31576896)

So what prevents me from charging this to someone else's number? Sounds like all I would need is number and name (which I get anyway if I get the number)?

Re:Give someone else's number (2, Informative)

mirix (1649853) | more than 3 years ago | (#31577018)

presumably you'd need their phone, as well.

All I have to say is... (1)

Ibiwan (763664) | more than 3 years ago | (#31576934)

"Sorry, M.P.!"

...there goes the last leg of your business plan. Let me know what you come up with next; I really liked collegeclub!

For those of you who never had the privilege of working for him, wiki [wikipedia.org] and employee horror stories [sandiego6.com]

We've had this in New Zealand for a while now (0)

Anonymous Coward | more than 3 years ago | (#31576982)

I've used this technology (or a local variant) to pay for metered parking in Christchurch City. The parking meters in the CBD all have a "pay by mobile" option; it displays a code on the meter and you text it to a service number (eg, 4267).

They charge you 50c for the privilege of having it billed to your mobile account though :-(.

One of the nice things though, is that it works across all the mobile networks here (Vodafone, Telecom, 2Degrees, Telstra).

Re:We've had this in New Zealand for a while now (3, Interesting)

mirix (1649853) | more than 3 years ago | (#31577088)

My father's hometown, in Serbia, has a system like this. You SMS your licence plate number to a 4 digit number, it charges you ~$1 for an hour, half hour, etc, depending on which zone of the city you are in.
It's the only way actually - if you don't have a mobile you can't park.

Which happens to be quite handy if you're running late - send another SMS instead of running to pump quarters into a meter.

Another excellent part about this system - you can move your car - and your payment is still valid, because the payment goes with your plate, as opposed to the parking meter.

Re:We've had this in New Zealand for a while now (1)

Ozlanthos (1172125) | more than 3 years ago | (#31577390)

Don't want it. You can have it. I don't have to pay to park now, why would I want to? How are your people so dumb that it sounded like a good idea to them? If they did it here, I'd invent my own flying car, and just put the thing on hover ever time I stopped somewhere.

-Oz

Re:We've had this in New Zealand for a while now (1)

mirix (1649853) | more than 3 years ago | (#31577514)

This is only in zones that already had paid parking. Normal residential areas are still free, of course.

Re:We've had this in New Zealand for a while now (1)

projectm125 (1773406) | more than 4 years ago | (#31578802)

Most adults are not subscribing to the ridiculous, and more importantly, misleading offers that make money by nailing you with subscription fees through the text messaging system. I think so

Re:We've had this in New Zealand for a while now (1)

mirix (1649853) | more than 4 years ago | (#31578914)

Just because the carriers in North America are fucked doesn't mean they are everywhere.

For $5 you get a SIM card and $5 credit. Prepaid, no monthly fees, no commitment, only stipulation is you must add money once a year or the SIM goes void.
To send a text is $0.02 - $0.04 depending on the prepaid 'plan' you choose.
So if your parking is $1, you pay $1.02 then... There are no other fees. I'm not entirely certain, but on purchases (like the parking) the SMS fee might be rolled into it, too. (so it would cost $1 even).

Already around since 5 years? (0)

Anonymous Coward | more than 3 years ago | (#31577036)

I dont get it, how can this be news? This has been around for 5 years in most countries. My site has this implemented in Europe, and US already?

Question about established systems... (1)

Statecraftsman (718862) | more than 3 years ago | (#31577096)

So in these other counties that already have it, can you describe what you have like this? I'd like to know do these systems tend to support more than one wireless carrier? Do they try for exclusivity with vendors? Are there caps like this $25/month? Are they opt-in? Does the vendor of a good/service have to pay a surcharge over what a merchant credit account would do? I guess I could search on it a bit but I also like the idea of getting some spontaneous information here.

Re:Question about established systems... (0)

Anonymous Coward | more than 4 years ago | (#31581208)

In my home country, we have had mobile payments for 8 years now, if I am not mistaken. To make a payment, one has to call a number that includes the retailer's ID code and either the product code or the required sum. While making this call, you are prompted to enter your security code. After that, both participants in the transaction get an SMS confirmation. One can also use similar procedure to send money to a friend's account, if the friend is also signed a contract for mobile banking.

The payment system is independent of mobile carriers, but works only with the three biggest banks in the country (everyone has an account in at least one of those). You opt in by signing a contract with one or several of the banks. In the contract, you specify your monthly and per payment caps, there is no general $25 limit. The vendor pays a transaction fee that is similar, if not the same, as a regular debit card payment fee. I don't know about credit cards, I have never owned one and I can pay by debit card anywhere in the country (the major banks have good cooperation going on).

In reality, mobile payments are rarely seen in places where one can use a debit or credit card (shops, restaurants, etc). Instead, one uses mobile payments to pay for municipality, city or state services. Buying fishing licenses by mobile phone is quite popular, because the number of licenses every season is very limited and only the quickest fishermen get the licenses. Paying for car parking is also somewhat popular, because it is more convenient to not carry around lots of change and it is simple to add extra time to the meter if something comes up. Some people prefer to buy bus tickets through mobile phone. Often, they have the correct number on speed dial and they only buy a ticket when they see that the ticket checkers are about to enter the bus.

Good idea! (1)

t0p (1154575) | more than 3 years ago | (#31577200)

I think this is a pretty good idea. There are a lot of people who are unable to make online purchases - they can't get plastic for a variety of reasons, same with PayPal - and it can be a serious disadvantage.

The only problem I envisage is children spending money they shouldn't, and parents having to foot the bill. The $25 limit is one way to tackle this; another would be to make it an opt-in service that can be authorized only by an adult; maybe even limiting the service to prepay (pay as you go) accounts, so it is impossible to spend money you don't already have in the account, similar to how a debit card works. But I can't imagine the cellphone companies will want to erect too many hoops for their customers to jump through.

Incidentally, this isn't a completely new idea. O2 in the UK have something similar called Cash Manager [o2.co.uk] , and Vodafone in Egypt have Vodafone Cash [vodafone.com.eg] . I'm sure there are other examples too. But these are more on the lines of debit cards that are linked to the phone account. However, I do have a vague memory of something like this being set up in the UK, by Vodafone I think. A quick google didn't turn up anything about it, though I'm sure someone else will be more successful in hunting for a reference.

Re:Good idea! (1)

Ozlanthos (1172125) | more than 4 years ago | (#31577640)

The $25 dollar credit thing is just a hook to get you to buy more than $25 a month worth of stuff via your cell phone. It isn't limited to $25 at all. Just imagine that you wanted to buy a ring tone or something, and you neglected to uncheck the box next to the option to sign up for 10 new ring tones a month for $5.95 (never mind that the page-scroll wasn't visible, and the box was a line or two beneath the viewable screen). Now imagine these kinds of gimmicks in the hands of a 13 year old girl, whose cell phone bill you pay...

Personally I'd prefer to get $25 off of my cell bill. I mean really, if they can afford to give you $25 a month worth of credit, why can't they afford to drop your bill by $25 a month? As it stands now, the cellular services market has too few participants, and those involved inflate their profits by colluding with one another in price-fixing schemes. The way I see it, the reason the .com bubble happened was that bandwidth providers have continuously been too slow on the draw in ratcheting down their prices as their number of customers has increased.

-Oz

Re:Good idea! (1)

OrangeCatholic (1495411) | more than 4 years ago | (#31579750)

>Now imagine these kinds of gimmicks in the hands of a 13 year old girl, whose cell phone bill you pay...

Well that *IS* Verizon's m.o.

I signed up for Verizon because everyone had it. Verizon promised better coverage than el-cheapo T-Mobile. Of course, while Verizon does have better coverage, it's the same or worse at my house. And Verizon charges up the ass.

Verizon has a great network, obfuscated by countless layers of smoke and mirrors. Are you 13? Do you have no self-control? Do you need Miley Cyrus' latest song now? Then Verizon Wireless is for you.

This is a company that will not admit a mistake and will not charge less than anyone else.

Verizon Wireless: For your pimp-mobile (tm).

Oh, sure, sign me up... (2, Funny)

msauve (701917) | more than 3 years ago | (#31577206)

because I really like the straight-forward, easy to understand, error-free billing system that Verizon Wireless has.

Really, what idiot would trust them with this? Hey - what's this $4.59 "service access charge" that's tacked onto my $10 order?

Re:Oh, sure, sign me up... (1)

Ozlanthos (1172125) | more than 4 years ago | (#31577662)

The large print giveth, and the small print taketh away.

-Oz

Re:Oh, sure, sign me up... (1)

EmagGeek (574360) | more than 4 years ago | (#31581172)

Yeah I can see it now:

Purchase - ACME Online Widget Company: $9.99
Federal Transaction Regulation Charge: $1.35
Wireless Financial Transaction Cost Recovery: $3.92
Local Universal Wheelchair Access Charge: $0.87
Federal Regulatory Cost Recovery Surcharge: $1.24
State Regulatory Cost Recovery Surcharge: $0.74
Local Regulatory Cost Recovery Surcharge: $0.39
Multiple Bit Transfer Data Access Charge: $1.42
Third Party Transportation Service Fee: $2.97

Bet they patented it, too. (1)

Ungrounded Lightning (62228) | more than 3 years ago | (#31577486)

(This comment intentionally left blank.)

Not Enough for "Critical" Mass (1)

moehoward (668736) | more than 3 years ago | (#31577510)

$25 can't buy any worthwhile pr0n, so this will fail. Give me $500/month, and then we can start negotiations.

Even after the pr0n, any trip to Starbucks is over $25 easy.

I have never spent less than $25 at a dollar store.

I don't think I've quite hit my stride on one-liners with this one. I'll try again later after I visit a few >$25 Web sites.

Interesting...sorta?...but (1)

sitkill (893183) | more than 4 years ago | (#31578130)

But how is this suppose to be any different from just using my credit card? And how exactly does this qualify as "mobile" at all? This sounds like it's destined to fail...considering it only has support of 1 carrier, and isn't coming from an established company (in payments), nor is providing any sort of mobile experience. How exactly are they going to compete against

1. established companies ( paypal - who recently released their mobile payment api )

2. companies who are invested by carriers ( zoompass - if you're canadian, they are funded by all three major carriers )

3. The old companies trying to get into the mobile sector ( visa and mastercard both have talked about entering the mobile payment platform )

4. other companies that have been around for a while already doing the same thing (obopay, etc).

You gotta sell yourself better than this verizon.

Oh look (1)

AmigaMMC (1103025) | more than 4 years ago | (#31578170)

Finally (part of) the U.S. is catching up with the rest of the world with mobile payments. In Europe you can even pay your utility bills on the phone.

Re:Oh look (0)

Anonymous Coward | more than 4 years ago | (#31579546)

If only there was a way to do away with the requirement of having a cell phone. Some sort of thin plastic card perfectly sized to fit in the wallet that you are already carrying your cash and ID in. If only this card was virtually universally accepted at brick-and-mortar and on-line merchants. If only one could chose a card that charged of a pre-arranged credit line or one that withdrew funds directly from a bank account. If only there was legislation that virtually eliminated the consumer liability for fraudulent purchases. If only the issuers were willing to pay consumers money to use said cards, even if they did not collect a single penny in interest or fees from the consumer.

Now THAT would be really ahead of the current US system...

Why give the retailer the cell number? (1)

AnyoneEB (574727) | more than 4 years ago | (#31578426)

Wait a minute, now instead of needing to give online retailers a mailing address for them to send junk mail to (which isn't so bad as most of the time I am buying a physical item that needs to be shipped to a real address anyway), I would be giving them the phone number for a phone I regularly have on me? Who could have possibly thought this would be a good idea? It would make far more sense for identifier given to the retailer be some random unique number (like a credit card number), which the retailer would give to Verizon who would in turn use it to text the verification code to the user's cell phone (hopefully in a text with the amount which will be billed).

DO NOT WANT (0)

Anonymous Coward | more than 4 years ago | (#31578878)

I think that my title says everything of relevance.

Charging less then 20% !! (2, Funny)

Qwavel (733416) | more than 4 years ago | (#31579048)

From another article about this service:

"BilltoMobile aims to charge fees of less than 20 percent of a transaction. It does so by bypassing the short codes to connect directly with mobile carrier billing systems and their subscriber databases. It took a couple of years for BilltoMobile to create this system and to strike deals with U.S. carriers."

The incredible efficiency of modern telecom and computer systems continues to impress me. To imagine, they have managed to develop a system where they can take less then 20% of the transaction!

To think that we used to use cash for transactions.

Re:Charging less then 20% !! (1)

OrangeCatholic (1495411) | more than 4 years ago | (#31579792)

Credit cards take (I believe) 2-3% of the transaction.

So ask your retailer, "Do you take credit cards?"

If the answer is an enthusiastic "YES!" then you're in the clear.

If you're buying 2 bagels from the corner bagel store then you should probably pay in cash. Credit cards (generally) have a $1 minimum, which translates to a $5-10 purchase depending on your merchant's profit margin.

Thus the "$10 charge minimum", which is illegal, but salient.

Re:Charging less then 20% !! (1)

gbjbaanb (229885) | more than 4 years ago | (#31580874)

Credit cards have a minimum fee too - like 50c, so the 2% is a lot more for small payments.

Which is why the $10 minimum is the amount generally used - the merchant pays that 50c on your $1 purchase, it turns into a net loss for them.

Also the $10 minimum is often (£10 here in the UK) the smallest amount you can charge before the card will phone home for authorisation. Less than that, they don't bother - so you can use a stolen card with impunity for small amounts (ok they do random authorisation)

Re:Charging less then 20% !! (1)

Registered Coward v2 (447531) | more than 4 years ago | (#31581760)

Credit cards have a minimum fee too - like 50c, so the 2% is a lot more for small payments.

Which is why the $10 minimum is the amount generally used - the merchant pays that 50c on your $1 purchase, it turns into a net loss for them.

In the US the credit card merchant agreement forbid setting a minimum credit card charge; although it's easier to not buy at such a place tan to complain to Visa/MC/American Express. Generally they were the small mom and pops; I guess for a big chain they probably negotiate a deal taht limits the impact of small charges. I'm not sure if CC agreements still forbid minimum purchase, btw.

Also the $10 minimum is often (£10 here in the UK) the smallest amount you can charge before the card will phone home for authorisation. Less than that, they don't bother - so you can use a stolen card with impunity for small amounts (ok they do random authorisation)

Which is why gas stations are popular places to test stolen cards - the pay at pump checks to see if the card is good. Found that out the hard way when my CC company denied a gas purchase because it was suspicious - I had gone to the airport late and needed gas. When I calle dthem they explained their fraud system kicked in do to the unusual purchase.

Ahhh, Verizon (1)

re_organeyes (1170849) | more than 4 years ago | (#31580952)

Another sorry excuse for a cell provider. I've been going round and round with them ever since they bought out Alltel (I'm a former Alltel customer with an Alltel data plan). They can't seem to see the forest for the trees. Why should I put any faith in some new Idea they've come up with?

This is hear (0)

Anonymous Coward | more than 4 years ago | (#31597200)

Ive paid my parking tickets, cola from automatic machines, paid my pizzas, bus tickets and once even one a bong to my phone bill for years. Not to mention all pr0n which is available by paying to my mobile bill

And without limits, which is practically 100-200 euros.

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