Mobile gifting still two years away

Users looking to send money gifts or make payment for presents with their mobile phones over the festive holidays will have to wait a few more years, say analysts.

Daryl Chiam, Canalys senior analyst said in a phone interview with ZDNet Asia that the inability of most telcos in the Asia-Pacific region to build up critical mass remains the biggest sticking point in mobile payments.

"The key is how to attract users to [grow] the installed base. The system must be really convenient," said Chiam.

He noted that beyond several mobile payment trials taking place, "not much else is happening".

Earlier this year, MobileOne (M1) launched an NFC (near field communications) trial comprising 300 users. Fellow operators SingTel and StarHub both kicked off their NFC pilots in late-2007, although all have yet to launch commercial services.

"We don't expect mobile payments to be mainstream within the next two to three years," said Chiam.

However, another IT research firm was decidedly more optimistic about the mobile payment scene. Springboard Research COO Chris Perrine told ZDNet Asia in an e-mail that 2010 will be a "tipping point", where new cashless payment technologies will take centerstage.

Perrine pointed to the example of U.S.-based service Square, which was unveiled earlier this month in beta, saying it demonstrates a "flipping of the equation" where the service enables phones to authorize credit card payments--as opposed to people using their credit cards to pay via phone. Square features a dongle that can be attached to a mobile phone, allowing credit cards to be swiped and read via the device.

"This allows small businesses that might normally only deal in cash to take credit cards very easily", he said, adding that this opens up new modes of business.

The mobile payment trend will also accelerate authentication technologies, as financial services companies and regulators put the infrastructure pieces in place, he said.

One Singaporean telco said it provides a mobile payment service allowing users to purchase goods and services from participating merchants, via their mobile phones.

A SingTel spokesperson told ZDNet Asia its MobileP@y service, launched last month, will link up users' credit cards to their phones, enabling them to use their phones to initiate transactions.

For now, the service has one participating merchant, the local Land Transport Authority (LTA), which is allowing drivers of off-peak cars to purchase day licenses through their mobiles with SingTel's service.

"We are keen on introducing new and innovative services such as cash transfers and are reviewing the feasibility and various kinds of transfers that will be useful to our customers," said the LTA spokesperson.

A StarHub spokesperson said it is also looking at making cash transfers available via mobile phones. "Based on our last [mobile payment] trial, customers do like the ability to make payments via mobile for transit, retail, ticketing and top-ups of mobile prepaid services.

"Regarding phone-to-phone or phone-to-bank funds transfers via mobile, the general perception is that customers would like to use these services as long as they can satisfy the basic requirements of security, usability and cost of usage," he said.