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Vodafone UK diversifies mobile payments platform

October 6, 2010

Vodafone UK ramps up its mobile payments initiatives

Vodafone UK ramps up its mobile payments initiatives

Vodafone UK is giving its customers more options for making mobile payments, realizing the immense potential of mobile financial services.

The carrier is partnering with Boku to let its customers charge their online purchases directly to their wireless pre- and post-paid accounts by connecting with Vodafone’s Mpay payments API. Vodafone customers can make either single or subscription purchases of any amount up to £30 GBP (approximately $48 USD).

“We’re excited about the whole trend of carriers launching next-generation billing gateways, enabling new use cases,” said Ron Hirson, cofounder and senior vice president of marketing at Boku, San Francisco. “Consumers are able to shop online and buy songs and movie tickets and have it be charged to their mobile phone bill.

“We’re essentially a payments layer similar to a Visa, for example, but we’re also a merchant-acquirer—we’ve partnered with EA and eBay Classifieds in Europe,” he said. “We’re partnering with merchants across 60-plus countries and hundreds of carriers.

“We offer a great value proposition for merchants, but also for carriers, because we provide the opportunity for scale.”

Vodafone Global is the second-largest carrier group in the world, behind China Mobile. 

Boku powers online payments via mobile phones, letting consumers pay for digital goods and social experiences across the Web using their handsets.

Merci Boku
The partnership between Vodafone UK and Boku enables two-step authorization and capture, transaction processing and the ability to pass refunds back to the customer’s account.

Boku claims that this type of mobile payments service offers merchants a frictionless, high-conversion payment flow combined with competitive interchange terms, faster payment terms and credit card-like taxation treatment.

Boku’s goal is to enable consumers everywhere to pay by mobile, help carriers such as Vodafone UK make more money by increasing the volume of payments and opening new revenue streams and help merchants collect more money from the consumers who love their products.

Over the past two years, carriers have moved beyond exploration of mobile payments and are enabling a next generation set of functionality to capitalize on the opportunity to grow revenue from payments.

Most specifically, the legacy payments system—usually premium SMS—are being replaced by next generation APIs that are modeled after banks and credit cards.

These direct billing APIs let Boku do power mobile authorization, pre-authorization and settlement.

The rates at which carriers charge for these payments services have improved significantly, which opens new mobile commerce markets.

A core part of Boku’s business is to establish relationships with mobile carriers in the Americas, Asia and Europe.

After recent deals in Argentina, Israel and Brazil, Boku has coverage in more than 60 countries and integration with more than 220 different carriers.

The company claims that it enables more than 2 billion consumers worldwide to pay by mobile, and it does a new transaction every second.

As Boku works closely with carriers that reduce their rates, more merchants will accept mobile payments, thereby growing the ecosystem.

“Carriers are rightly concerned about the security of mobile payments, so they have to think about who they’re partnering with,” Mr. Hirson said. “Historically carriers have been doing payments via premium SMS, and only once that text message arrived on the phone would the carrier do a transaction on the phone bill.

“The evolution of that was for content purchased and consumed on the handset such as ringtones and wallpapers,” he said. “The Vodafone Mpay platform has true payment functionality, and it doesn’t require a SMS message to be sent to the phone.

“Mobile payments offer carriers new revenue streams selling music, ebooks and anything that can be purchased online, depending on the rates that can be negotiated.”

Final Take
Dan Butcher is associate editor at Mobile Commerce Daily

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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