I read with interest that several mobile telecoms companies are applying for money broker licenses, and I hear that a couple of them are planning to expand their “value-add” payment services to include more and more
As we know, there are lots of premium rate services available, used for telephone phone-ins (for example premium rate support, or tv shows), specific content (for those of you who play Mafia Wars on Facebook, you know what I am referring to), and more. Some of these are paid for by calling a premium rate number, others are paid for by receving texts from a premium rate line. Phone companies quite like the money from these services, but don’t like the fact that there is an extremely high rate of chargebacks, customer complaints, and so on. Regulation of all this premium rate stuff is performed by PhonepayPlus, formerly known as ICSTIS.
In recent years, mobile telcos have tried to get away from the idea of this billing method, and are moving to services such as Pay4it – this tries to make a bit more sense of it all by putting charges on your phone bill as discrete items, rather than a sequence of rather high-priced text messages.
Now apparently an idea has been floated around that instead of using my VISA card to pay for a purchase at say, Amazon, I can use my mobile phone. Sounds good, I just enter my mobile phone number and respond “yes” to the confirmation message and my latest XBOX game is winging its way to me.
There are two tensions at work here. For my phone number to be useful, I want as many people as possible to know it and if they need to call me, they can (its at the top of the page, for example). For a payment purchase, I would like to give my card number to the merchant, and then for them to forget it (or at least, store a token that is not recoverable but that they can use next time I want to make a purchase). In fact, PCI DSS is all about making sure that merchants don’t just chuck card numbers into a database.
How will phone companies handle chargebacks? How will they control the use of a phone number when effectively, anyone can have it? What happens when scammers just pick phone numbers that are unallocated (as they do right now with premium rate text fraud)?
I watch… with interest.