Taking the sting out of m-commerce?

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Start-up Waspit has launched an SMS-based service that it says can be used to send and receive money between friends and family; to buy and sell things online and through online auction sites; to pay for parking, train tickets, or online and mobile gaming.

Waspit is available in UK, USA, Australia and Canada, although the company is still focusing on signing up merchants.

Richard Steggall, CEO, Waspit says, ‘As the mobile apps market increases in size and businesses embrace m-commerce as a tool rather than as a fad, there is a need for an all encompassing m-payment solution. We have seen a number of entrants come into the market over recent years such as Verrus which does the pay-by-phone parking for the City of Westminster. While it provides a great

solution, these sort of services appear solution specific: to me they are like a store card while Waspit is like a credit card which could be used anywhere.’

To use Waspit, users have to register and link a debit or credit card to their Waspit account. Alternatively they can credit the account via PayPal or by a transfer from another Waspit user. When a purchase is made, the merchant covers the fees which, depending on size and risk profile, can range from 3.5% to 8%. For the merchant, it works in much the same way as a credit card merchant facility, except that funds are transferred instantly to the merchant.

Regarding security, Steggall says ‘We are heavily regulated, and we are Payment Card Industry (PCI) compliant, just like a high street bank. We don’t see it as replacing other payment methods, but rather an alternative method business can adopt so that they can better serve the emerging generations.’

Many have entered this market before and failed. Achieving critical mass is a tough nut to crack on both the consumer and merchants sides. Perhaps the thing that is most of Waspit’s side is timing, as it does finally look, after more false dawns than London’s Planetarium, that m-commerce is about to hit the big time.

Generator Research suggests that the number of people using their mobiles to make payments will increase 600% to 490 million by 2014, and the market will grow to $633.4 billion during the same period.