Anonymous wrote:

>>What I am really wondering is if it would be practical for debits to eventually come from prepaid phone accounts.

I think that’s a great way to go, and I agree with you that it might be a hit first outside the US, where credit cards are less popular. Japan’s doing a lot of this already, and I think it’s being worked in some other parts of Asia but I don’t have all the details.

giff wrote:

>>the ease of having a micro charged to your phone bill versus having to set up an Amazon or Google account and/or then have to enter credit card information over your mobile is still a HUGE plus.

If the take from the operators isn’t too high, you bet. If they keep it at 50% or anything like that, they create a huge incentive for others to bypass the operator somehow.

Also, think about this — out of the people in the US who are likely to buy content or apps on their phones, how many already have accounts with Amazon? I have a feeling the overlap is pretty high. Supposedly, Amazon has about 50m unique shoppers per month. That’s bigger than Verizon’s customer base, and about the same as AT&T’s. For those people, using FPS will be very easy as you won’t have to sign up for anything new.

Things will be more challenging for Amazon outside the US, where its penetration is not as high.

Anonymous wrote:

>>Another way to look at it is as the mobile data version of a 900 number. When you call a 900 number your phone company get a portion of the revenue too provide the connection and billing. But they are not a partner in the service.

Good analogy. I think one of the operators’ worries is that they will be expected to provide the support for anything they bill for. That’s a customer education issue, but it’s a real one — users tend to call the operator for support whenever anything happens to their phones.

Rob wrote:

>>It isn’t the user who makes the choice. The content provider gives 50% of their revenue to the operator in return for getting prime position on the user’s device.

Tell me more. What I’ve heard consistently from app and content developers is that the operators try to take a huge cut no matter how buried you are on the phone. But yeah, I could see top screen placement as being more valuable — it’s the same as purchasing an ad for a popular search term on Google.

It isn’t the user who makes the choice. The content provider gives 50% of their revenue to the operator in return for getting prime position on the user’s device.

At the moment, the operator really can give more prominence to content than it would get by simply being ’somewhere on the web’ - so the 50% is still probably a great deal for the content provider.

Another way to look at it is as the mobile data version of a 900 number. When you call a 900 number your phone company get a portion of the revenue too provide the connection and billing. But they are not a partner in the service. You can set up a 900 number and your service are open to anyone with telephone.

Obviously the supplier would prefer Amazon. But we have to think of the end user/customer here.

Sure, I think what the carriers do is monopolistic and will cost them down the road. But right now they have the big stick and all we can do, for now, is nod our heads and say “please sir, may I have another!”

In particular I am thinking about outside the US where many people are not near as confortable with credit cards and cash still dominates small transactions. What I am really wondering is if it would be practical for debits to eventually come from prepaid phone accounts. In particular if the commisions paid for the sale of refill cards would exceed merchant fees and therefore not allow this.

In europe and Asia the customer base for such mobile delilvered services that could be established quick and easy without any negotiation with the operators could be huge. The consumers in that part of the world tend not to like subsciptions and would prefer to pay as they use. They also do not want to either register or give a credit card number or any personal information to sign up for web services. An example of this aditude is that europeans in particular prefer prepaid phone services that work out of the box and do not require them to register with their name and address before usage. Exposure to a whole untapped market could be acheived if these payment systems were extended to allow debits from these accounts.

This reminds me of what you wrote about the How? vs What?

Even techies sometimes just don’t get it

Anonymous wrote:

>>I think the question that needs to be asked is how long before these “chinese” walls fall.

Agreed. I wish I knew when. I think we’re probably waiting for one of the operators to bolt, and then the rest will follow.

>>Those companies charge a premium because they can…and it’s still early adopters in the market.

I think it’ll continue to be just early adopters until we get the business model fixed.

Moose wrote:

>>I was actually expecting Google to come out with something like that instead of Amazon.

Me too.

Erkko wrote:

>>Playing on both the infrastructure game and the direct sales gives Amazon an inherit advantage over a lot of their competition because of their great market understanding

I agree. The interesting thing to me is that there are a lot of other big e-commerce companies, but you don’t see them doing something like this. I’ve got to give Amazon a lot of credit for being able to think of itself as more than just a retailer. That is incredibly hard to do, because there’s always something important that you should be doing to fix your core business rather than playing with other business ideas.

Also, playing on both the infrastructure game and the direct sales gives Amazon an inherit advantage over a lot of their competition because of their great market understanding, which they seem to be leveraging well. Understand what business are doing and what consumers are doing, brilliant!