A mWallet Case Study:

Paybox

Paybox was the first and only mobile payment method that allowed consumers and merchants to send and receive payments through cell phones. It was started in 1999 by Mathias Entenmann. The service started in Germany and expanded worldwide, servicing 750,000 consumers by May 2002.

How it worked

No new technology was required, but a yearly £14.99 payment by the consumer was. Instead of handing over a credit card, consumers handed over their phone numbers. The clerk then entered the number into their register and the consumer either confirmed their PIN number through a text message or through the phone (Paybox would call the cell phone). A few seconds later, a confirmation text message was sent.

Disadvantages

• The BBC reported that “the only disadvantage I could see of paying with a mobile for tickets is that it takes a little longer than cash”.


• Only select places accepted this form of payment.

Why It Failed

In 2003, Paybox closed down its mPayment services. In Paybox’s own words there was

“no possibility for a single mPayment provider to develop the industry lone in the current industry conditions, especially amidst the discord between the other important market players (banks and telecommunications companies). The necessary growth and profitability can only be reached with many active market players, which have so far failed to appear."