Mobile Payments, Direct-to-Bill’s Moment, and the Downside of a Good Reputation

Written by on May 15, 2012 in BillingViews, Opinion with 1 Comment

This week, Dark Reading published a survey from Javelin Strategy & Research which found that “by a margin of almost 4 to 1, consumers believe direct carrier billed mobile payments are more secure than using credit and debit cards for online digital purchases.”

How about that? Direct-to-bill charging is finally having its moment in the sun.

Looking deeper, the study found that people are loath to part with their personal information and credit card numbers because they don’t trust merchants to keep that sensitive data secure. There’s good reason for this, given the number of highly publicized hacks that resulted in theft of personal financial information in the past year. From that perspective, direct-to-bill charging is a superior option because it adds another layer of perceived security. That’s great news for telecom operators in the mobile payments game.

But consumer perception can be tricky, fickle, tenuous…just ask Toyota. For years, Toyota was held up as the poster child, across many industries, for how to get quality and reliability right. A few braking failures later and Toyota’s reputation, and sales, were smashed.

The first time the news hits that mobile payments have been hacked, this perception of security will take a hit. Not if…when. It will happen. And here’s the thing – today, at least in the U.S., there are no hard and fast rules to protect consumers from frauds committed via their mobile phones as there are with credit and debit cards (and many would argue those are too soft).

The Consumers Union has been encouraging U.S. mobile operators since May to strengthen their contracts and policies on this front. Just this week, the group issued a press release offering five protections that ought to be put in place.

In order to capitalize on the perception that direct-to-bill charging is a safer, and therefore better, way to go in online and mobile digital payments, operators ought to listen to groups like the Consumers Union and move rapidly to put policies in place that protect consumer interests thoroughly. It makes for good PR; it’s smart business; and it’s finally a chance for communications operators to “beat the other guys” by leveraging their trusted relationships with customers.

Now, if we can just get this Bill Shock issue sorted out…

Edward Finegold

About the Author

About the Author: Ed Finegold is CSO for Validas, a company that specializes in personalized user experiences that leverage analytics-as-a-service to simplify mobile buying, selling, pricing & billing. Ed has been a regular contributor to BillingViews. .

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  1. Avatar Marluce says:

    Stay away from any that charge a fee.Most if not all of these cepoanims will trash your credit.What they do is not pay your creditors for months and then try and settle for less under the threat of bankruptcy. No special skills. They just don’t pay.Your creditors do not have to deal with these people because it is your debt.Also, If they don’t pay you creditors. You, and you alone are still responsible for the debt. Your creditors will sue you and not the company you hire.

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