Glenbrook Partners, which covers the payments industry and strategies, ran a story today that Obopay has moved away from their 2-step "Store & Forward" approach and to the Mpayy model of enabling payments directly from users' checking accounts.
Ramy Mora, VP of Marketing at Obopay notes that the decision was made as a result of focus groups and not the careful study by Obopay employees study and testing of Mpayy's service. We'll take them at their word.
Obopay, which has taken $46 million in Venture Capital financing, started with a "fat-client" solution. A "fat-client" requires the download of software onto a mobile device, requiring a team of developers to ensure that each Operating System put out by Motorola, Apple, Nokia, LG, Samsung, etc. is compatible with the subsequent releases. This is hugely capital intensive pursuit requiring a huge team of developers. In fact, as recently as January, the company added support for Blackberry users through specific software on the device.
Obopay moved to a thin-client solution based around a WAP site, but maintained its "Store & Forward" model. It will be interesting to see what Obopay does with their payment lags and accounting opening process now that the money goes directly from Person A's checking account to Person B's Obopay account where it can be withdrawn with an ATM card. This introduces significant credit risk, and we'll look to see how they handle it.
Obopay does have a slick front-end, something Mpayy can not claim presently, and they do have a relationship with Citigroup, but usage has fallen since the partnership was announced. Perhaps this most recent change will pick the traffic back up.
Recent Press for Mpayy
Mpayy has received two "also ran" mentions in sidebars and lists of mobile payment companies of note.
In the Nilson report, Mpayy was included in a list of alternative payment systems that was a sidebar to an article covering Steve Case's startup, Revolution Money, which recently concluded a deal with Fifth Third Bancorp to accept the Revolution Card in bricks & mortar stores.
Today, Mpayy got word that it would be mentioned in Javelin Strategy's "Mobile Person-to-Person Payments and Transfers: Security and Timing Are Everything" report.
Don't shell out $2,250 to learn about Mpayy, though, as this is evidently the extent of our honorable mention. We very much appreciate the coverage, though, and enjoy being mentioned in the same breath with Visa, Mastercard, PayPal, Obopay, Textpayme, etc.
Wednesday, March 19, 2008
Obopay Adopts Mpayy Thin-Client Single Step Payment Process
Tuesday, February 19, 2008
Electronic Payments Pricing Compared
Last week I presented the capabilities matrix that juxtaposed Mpayy with the other payment processing systems available for plug-in to any eCommerce website and for use to conduct payment processing for online sales that don't involve a web shopping cart.
Today, we present a comparison of the pricing for each of the various channels offered by each of the systems. 
Mpayy wins in all categories on the basis of pricing, and was designed to do so. Mpayy is a multi-sided payments network of buyers and multiple types of sellers. There's a great article in the Harvard Business Review that indicates it is important to subsidize one-side of the network. Mpayy does this by providing the 1% Cash Back on purchase amounts over $50, 100 free Person-to-Person Transfers/month, and providing for $0 overdraft fees when users' checking accounts are empty.
On the Mobile Commerce side, Mpayy is well-positioned to take advantage of any growth in this new type of sale. PayPal does have a model, and is working with companies like Mporia which hosts mobile commerce websites for companies like Buy.com. As you can see, PayPal forces those merchants to pay through the nose for this unique capability, though those prices will come down as adoption of Mpayy grows.
PayPal rates are closer to those of Mpayy, though online selling merchants are increasingly in opposition to eBay/PayPal, which is restricting payments to sellers for up to 21 days for any transaction eBay deems questionable. Further, there is some evidence that sellers with a spotty track record and new sellers are being forced to use PayPal. Large retailers are reluctant to adopt PayPal for two reasons: i) eBay clears billions of dollars of merchandise competing with the retailers and providing eBay with a competitive advantage by possessing their data; and ii) "gray market" goods that move through eBay will undermine the retailers' own goods.
Google Checkout offers $0.20 + 2.00% for Internet Point of Sale transactions. However, Google only accepts credit cards, and increases indirect costs through the onus of integrating to their API's, including providing complete information on everything in a user's shopping cart rather than just clearing the transaction. While we have no direct evidence, this would suggest that Google is taking a loss on every transaction in light of credit card costs to merchants being so high. Further, our discussions with the largest retailers indicate it is unlikely Google Checkout will receive significant adoption among "MegaRetailer.coms" because they know the value of their data and don't want to give Google all of that information.
Revolution Money is on here because they are currently offering $25 account opening bonuses and claiming no fees. As discussed on Friday, Revolution Money does not have a merchant model, and funds sent through it are not guaranteed. Further, they require a pre-funding step rather than just treating their account as a pass-through account. Revolution Money is seeking a lead list for its credit cards, and they do have plenty of other fees built into the system should anyone run afoul.
Friday, February 15, 2008
Electronic Payment Processing Systems Compared
The following is a side-by-side comparison of Mpayy with its electronic payments processing competitors.
It is certainly possible to feel this is biased towards Mpayy, as is my tendency. However, this highlights design decisions that were made in constructing the application.
For consumers, Mpayy created a multi-channel application (online, mobile, social networking, and internet retail partner sites). Further, consistently, Cash Back is the highest ranked reward by consumers. Mpayy provides 1% Cash Back on Purchase amounts over $50, and will provide soft dollar rewards that can be used as cash based on balances stored in the application. That is coming in the next few months.
For Merchants, the primary concerns were the price and security. The MOST expensive Mpayy will be is $0.20 + 2.00%. Google Checkout is offering that price, and we will certainly go below it with the right internet retailer partner or for PeSA and ECMTA members should they approve us. However, Mpayy also takes 100% of the fraud liability, not so with Google Checkout, and provides merchants with guaranteed payments, which GC does not.
On site integration, PayPal and Google Checkout provide relatively extensive API's to integrate to, and Google Checkout requires merchants to maintain their SKU's within the application, which is not practical as the size of the merchant grows. Mpayy's simple session transfer can be developed to within hours, and the AJAX Checkout window will be packaged up and plug and play when it launches as well.
