March 23, 2006



Posted: 09.01.05

Cashing In

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By Michelle Maisto

I remember getting a call, in early 2001, from a friend on a business trip in Tokyo. Him: It’s so crazy, they have cameras in their phones!” Me: “What? What do you mean? Him: In the handsets—in the back of the handset, there’s a camera! Me: I have no idea what you’re talking about. I can’t picture that at all…

Once again, we’re hopelessly behind. For over a year now, NTT DoCoMo i-mode subscribers have been using their cell phones as stand-ins for debit cards, credit cards, entry passes, personal identification and more. With i-mode FeliCa—a service made possible by combining i-mode with Sony’s IC chip technology—users simply swipe their i-mode FeliCa handset across a compatible reader (much like waving an item over a grocery store scanner) and money is instantly deducted from an e-money account, which can be checked or refilled anytime via i-mode.

Are U.S. mobile subscribers equally ready to embrace cell phones as “mobile wallets”? Watertown, Mass.–based MobileLime thinks so. “Find me somebody who wants to carry around one more thing,” says Robert J. Wesley, president and CEO of MobileLime. “They’re already carrying their cell phone, and this is so easy, so fast. People are looking for this kind of convenience.”

Unlike i-mode FeliCa, which relies on special IC chip–embedded phones, MobileLime works on any phone using any carrier. Users sign up free online, and the service relies on text messaging to offer a secure payment plan. For example, a customer purchasing a cappuccino at a coffee shop would speed-dial the MobileLime number and answer a voice prompt; at this point, he or she may also receive a coupon offer or be alerted to the remaining balance of their pre-paid account. At the register, the customer tells the cashier a four-digit PIN, picks up the cappuccino and heads out the door—no slips to sign, frequent customer cards to have punched or change to count. The cashier enters the PIN into a special credit card machine, and the customer receives a receipt via text message.

Users can get through lines quicker, aren’t turning over their credit cards to strangers, have the option of not needing a wallet on them, don’t need to worry about remembering loyalty cards or coupons and can opt to receive coupons from certain vendors. For the merchant, the benefits are also rich.

“I’m sure you’ve been at a restaurant where they give you a beeper when your table is ready,” says Wesley. “Now you can just get a text message [from MobileLime] saying, ‘Your table is ready and, oh by the way, here are today’s specials.’ Other people are using it for, ‘Here are the newest movie rentals,’ or, ‘Your prescription is ready.’” It also enables merchants to act quickly. “Sometimes some of our merchants will give a 10 percent off Rainy Day Special. We’re getting buckets of rain coming through right now, and I’m sure some of the restaurants are suffering. They basically knew that at 9:00 this morning, and they could have done something about it by sending out a ‘Hey, you might get wet, but here’s 10 percent off if you come for lunch!’ message.”

Additionally, the ROI is more effective with MobileLime than other loyalty or marketing programs, says Wesley. “We offer them different payment options, where they can lower some of their payment costs. For example, if they want to offer a pre-paid program today, it’s far more economical to do it our way because they don’t have the hassle of issuing cards, the cost of plastic, the logistics to make sure cardstock is in the right place. So you avoid all those hassles. [Plus,] it reduces their payment costs because they’re doing a pre-paid program versus a credit card program.”

Whether the masses are ready for mobile wallets, time will tell. Though perhaps more time than one might think. MobileLime is currently only available in the Boston area, at approximately 80 restaurants, grocery stores, salons, retailers and taxi services, though it’s in the process of expanding into the New York/New Jersey metropolitan area and recently completed negotiations with a few yet-to-be-named national merchants.

When asked whether mobile wallets could pave the way for providing U.S. customers with all the functionalities i-mode FeliCa users enjoy, Wesley could certainly imagine it. “This is just the beginning, the tip of the iceberg of this whole revolution that’s going on. As we move forward, we’re going to be looking at more advanced technologies. But right now, we have in our laps the ability to take your phone and not only make a call but tap it and make a payment. The premise on which we started our company was that we wanted everybody who has a cell phone to be able to take advantage of it, and every merchant to be able to reach out to anybody who has a cell phone.”

Which is a pretty advanced idea.

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