PayFone, a mobile payments company that has spent three years in stealth, today revealed its inter-carrier network-based payments platform. It streamlines how consumers use their mobile phones to make payments in app stores and social games, intending to offer one-touch purchases, variable billing schemes and price points, and improved billing transparency.
It also announced an $11 million second round of funding from Opus Capital, BlackBerry Partners Fund and RRE Ventures. The promise is that the company will help users make quicker, more easily tracked payments, which in turn benefit companies offering PayFone as a payment option. As Facebook and its developer ecosystem continue to expand on mobile devices, this company could provide payments for both fixed and mobile games.
Existing mobile payment providers, like Zong and Boku use premium SMS messages to conduct payments. A user initiates a payment online, sending a yes/no payment option to their phone to which they must respond or displaying a pin number to text in. Additional confirmations are sometimes needed. This multi-step flow has many failure points, as customers have time to think twice and spotty service can prevent SMS transmission.
PayFone intends to bypass these issues by conducting transactions over the secure inter-carrier network which allows carriers to pass customers back and forth when they travel. This system, designed for billing, removes the need for text messages and intends to facilitate new pricing models in addition to current fixed-price and subscription options. PayFone payments will reportedly be easy to distinguish from other charges on a user’s phone bill, improving the credibility of an industry known for complex and sometimes deceitful billing practices.
Those without their own credit cards, like teenagers, will gain a new payment option from PayFone, with another mobile payment option in works as a combined effort from AT&T, Verizon, and T-Mobile. Companies investing in a reduction of the time and effort involved in consumers making mobile payments is great news to virtual good and app purveyors who want customers purchasing on impulse.