Unrealistic: the verdict on <i>The Times'</i> micropayments plan

No money to be made from micropayment software, says analyst

News International's plans to licence its micropayment technology have been branded "unrealistic" and "high risk". Visitors to Times Online (which is owned by News International) will soon have to enter their mobile phone number to view premium content. The charge for viewing these parts of the site will then be added to their monthly phone bill. News International is set to file an application to patent its micropayment system today which, if granted, it intends to use on its own sites and then sell to third parties via its subsidiary Omnimedia. Steven Van Rooyen, general manager at Omnimedia, explained that it is looking to sell the micropayment system to other media companies, record labels and adult entertainment outfits. He told silicon.com: "I predict the m-payment system will account for 10 to 15 per cent of Omnimedia's total revenue." But Ben Donnelly, research analyst of mobile telecoms at Frost and Sullivan, described News International's intention to sell its micropayment systems to third parties as " unrealistically optimistic".
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There are already organisations in Europe with similar systems. For instance, Finnish telco Sonera has been running a mobile payment system for five years. The Spanish organisation Mobipay has the clout of all the Spanish mobile operators and leading banks behind it and according to Donnelly could well form the basis of a European standard for micropayments. Paybox is another of the numerous organisations to have established itself in the European market as a mobile-assisted payment provider. Donnelly explained that News International would have to fight hard to make itself heard above the noise of such competitors. Success will rest upon an excellent marketing strategy, he said. And while it might be high risk to invest in the development of the technology the return could be hugely disappointing. Donnelly said: "It could be two years before News International sees a return on its investment."