..Mobile payment and walled gardens. What’s theconnection?
If you can appreciate how difficult it is merely to get several operators together in a room to discuss a subject such as m-commerce then you can probably grasp why it has taken Simpay, an alliance of operators focused on producing a unified payment for digital mobile content, two years to even get to the point of announcing its first service launch.
“Of course, perhaps things could have speeded along a little quicker, but the important thing is we are here now,” said Vodafone’s director of consumer marketing management Guy Laurence at a round table event organised by Simpay, at which all the participating operators were present. Simpay has now put together its technical team and its “merchant acquisition” strategy. Merchant acquisition is the term, imported from the credit card world, to describe the process by which operators or content aggregators will get vendors to join the Simpay scheme. It is important because the cake in Simpay will be divided up very differently in the mobile world than in the credit card business.
Selling mobile digital content is different from the credit card industry because people are buying not clothes, holidays, expensive meals, but ringtones, video clips, music tracks for perhaps 2-5 Euro. This means that each transaction needs to be affordably processed with much less to go round. Nonetheless, the operators (Orange, T-Mobile, Vodafone and Telefonica, now joined by Proximus and Amena) have pushed ahead with trying to get something off the ground, and Amena has launched a service in Spain.
The reward for operators with Simpay is that they will get a hook into the business of people buying content off-portal. Of course, operators will never admit that they are considering the walled garden approach to content, but the control of access to content is still a ticklish issue. It seems that premium content with chosen partners will still sit on-portal, ie within your Orange World or T-Zones. Then there will be a second tier of content which will be at arm’s length from the operators, perhaps within an extended “approved” capacity. Then there will be genuinely separate third party content whose origination and access has nothing to do with operators. Simpay’s partners hope that their scheme will make it easy for users to access content from these providers, but also be able to trust the reliability and security of the content (ie it is bug free and works on their phone).
Simpay is important because it means operators will feel they have some value to take from their users downloading off-portal content. In Cannes, Orange’s briefing made great play of how IP converged services would mean users could access content wherever they were, through whatever access technology. But in all the talks the connection was always to the OrangeWorld site. But of course, controlling where you users choose to access content will be effectively impossible once back end service platforms and media player technologies on phones themselves have converged. If a phone is effectively an MP3 player, and a you can download MP3s from thousands of sites, why bother do so through your mobile operator’s content portal?
When you look at is like this, Simpay becomes less about a few operators getting together to persuade people to buy more stuff, and in fact crucial to the content strategies, and therefore the future viabilty, of the operators themselves.