Payments Watch

Verizon announced today that customers can Leave The Cash At Home – Obopay Will Give Verizon Wireless Subscribers The Option To Shop With Their Phones. It was worthwhile to actually read the press release to see how all of this would work.

Verizon Wireless has teamed up with Obopay to allow their customers to access mobile payment services:

The Obopay service allows users to receive, send and spend money instantly and effortlessly via their mobile phones – whether shopping at their favorite store, going to the movies or dining with friends.

Source: Verizon Wireless

After reading the press release, I learned a few interesting things: it looks like the service is being implemented as a combination WAP/proprietary mobile application. My understanding is that Obopay also supports SMS for their mobile payment offerings, so I wonder if using SMS is going to be an option for Verizon customers (as per my reading of the press release, customers may be on the hook for download and airtime charges while using the Obopay application). While person to person payments appear truly mobile in nature (once you are signed up for the Obopay service, you evidently send money via the application to another Verizon subscribers mobile phone and they are prompted to join the service and receive the payment), using it to shop is actually handled, it would seem, via an Obopay prepaid MasterCard, which can be used at any retail outlet that accepts credit cards (or an ATM for that matter). The Obopay prepaid Mastercard is linked to your Obopay “mobile” money.

So it would appear that there is no mobile payment device / NFC / smart card magic going on here at all. In fact, when you think about it, maybe the way to overcome the legacy credit card barrier to mobile merchant pay is to simply work within that legacy infrastructure. Maybe NFC is a non starter in North America given the maturity and expanse of the credit card network. Why replace it?