New Micropayment Standard Gets a Boost

PayCircle, a global non-profit working on standards for mobile commerce, announced Tuesday that it has completed the second half of its payments specification with a Java spec.

The Java-based JPay API is interoperable with PayCircle’s Parlay WSDL/XML spec, completed in May. Both provide for a standards-based interface for merchants and billers to communicate about transactions made using mobile phones.

San Ramon, Calif.-based PayCircle used the Java community process to complete the specification, said Stefan Schneiders, PayCircle COO and director of corporations for Siemens. The Java and WSDL/XML specs are two roads to the same end: a standard way for mobile payment applications to identify users and authorize transactions. Schneiders said his group created two different versions of the spec so that a wider variety of developers could use it.

“The Java community has thousands of developers,” he said, “but there are others who prefer WSDL/XML. It depends on which background people come from.”

Without this spec, mobile developers would have to adapt their applications to each network operator’s technology. With the spec, Schneiders said, ” For content providers and application providers, there’s a common interface.”

The specification provides for letting the end user choose among a variety of payment options through the phone: placing the charge on the telephone bill, a credit card, or a debit card.

In the world of m-commerce, proprietary payment solutions come and go —
mostly go. It’s difficult for proprietary payment apps to get a critical mass of users, merchants and telcos. Schneiders said an open payment standard interface would open the marketplace to many developers that could compete on their merits.

Such a standard is important, according to Mark Vedel, president and CEO of mobile payment applications developer Mobileping.

“Carriers will not share customer information, but they will validate identification,” he said. “If I have a standard API I can validate a transaction against, I can make the transaction.” Such a standard would let various m-commerce applications query the carrier to make sure the person was a valid user with a valid account that was authorized to take the charge.

While developers may embrace an open standard, that doesn’t mean the telcos will. “In the States, carriers are a lot more closed than in Europe. Five of the ten major carriers spent a lot of time and money integrating Qpass, and they’re not about to move off that,” said Mobileping’s Vedel.

In Europe, network operators blew billions on licenses for broadband 3G networks, and now they’re as gun-shy about wasting money on unproven tech.

“Standards take time, and upgrading existing infrastructure, with proprietary solutions is a tempting way to save money and time in the short run,” said mobile payments consultant Maria Christensen.

She said telcos are wracked by internal debates over how to handle charging, billing and payments — and which department should control the technology to handle it all. If PayCircle wants to have impact, she said, it will have to get operators’ attention, and there are plenty of other standards bodies in that competition.

Neither are open standards a sure bet when they come up against closed business practices. “Standards are a way to ensure interoperability, and banks and operators
have by tradition walled their gardens very carefully,” Christensen said. “The more I have worked with and studied commerce, payment and smart cards, the more I have found that fear prevents good business. There’s too little time for managers to understand what new technology can do for their business, and the road becomes unnecessarily bumpy.”

JPay and Parlay are a good idea — and a huge undertaking, according to Vedel. “It’s something that needs to be done.” But it won’t be done soon — at least not in the U.S.

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