Creating the M-Wallet

[05 February 2001] – As the PC’s hold on the Internet and Web continues to slip, businesses and individuals are looking for ways to derive profit from the blending of the Net and the phone. M-commerce, paying with your phone, is an idea whose time might soon be here. A South African company, Fundamo, is busy marketing its recently developed mobile payment technology as the way we’ll transact in the future.

Fundamo, a Sanlam-backed venture whose alliance partners include Prism and Cellular.co.za, wants to be the Visa of the wireless world, enabling banks, mobile operators and merchants to offer the functionality of transacting via phone.

The offering is aimed at every level of commerce. The promise is that youll be able to pay your bills, transfer money to your partner’s account, purchase something off the Web and even pay for your groceries at the checkout counter.

Fundamo’s system is SMS based — you enter a special PIN, which differs from your phones PIN, and then transfer money in real-time from your accounts to the accounts of those you wish to benefit. In the case of buying something on the Internet, you will enter your telephone number and then receive an SMS asking for confirmation. This removes the risk of having your credit card number stored in remote directories, making it an adjunct to online shopping, not a replacement.

M-commerce has an advantage over e-commerce with its real-world element. It’s not possible to buy something while you’re in the store with your PC, while your phone goes to the shops with you.

But before it takes off, it needs buy in from those who demand and facilitate payment -the banks and the merchants- and the mobile operators who provide the service. Absa, 23.7 percent-owned by Fundamo backer Sanlam, already offers a mobile banking service. Other banks will follow and the banks control the point-of-sale points in stores. As for mobile operators, as mobile penetration plateaus they will be eager to increase their revenue streams without increasing the number of handsets out there.

Cell phones and the way we use them are becoming increasingly sophisticated. If this trend continues, our phones will inevitably become our wallets.