Two Mobile Payments Efforts: One Good, the Other Not

Today AT&T and Sprint announced new mobile payment initiatives. AT&T announced beta tests (essentially) with Boku, Zong and BilltoMobile. In each case the vendor will handle the transaction and AT&T will include the cost of that transaction in the mobile user's monthly bill.

In each case we're talking about relatively small transactions. Carrier billing avoids having to give another third party a credit card number. So it's potentially convenient and safer. I would speculate that those without credit cards are most likely to use and benefit from the system, however.

Consumers don't "trust" carriers, which generally have low satisfaction ratings (although some are improving). In addition, there are already huge monthly bills coming from carriers (often associated with "bill shock"). Adding third party payments into this scenario is probably quite undesirable from a consumer perspective -- certainly from mine. It's also not clear whether consumers would have the same protections and recourse they do with credit card companies (which are not well liked either). 

Sprint's "mobile wallet" is smarter and may be more viable because it's essentially a pass through to a credit card or other payment system and doesn't show up on the carrier bill. It will also be used to help facilitate application purchases and enable developers to monetize their efforts in a less cumbersome way than now exists outside iTunes. According to Sprint's release:

Sprint Mobile Wallet is the first mobile payment solution of its kind from a U.S. carrier. It allows customers to use a universal PIN to make purchases using their Visa, MasterCard and Amazon Payments accounts along with other payment methods, right on their phone . . .This new capability is different than carrier billing. With the Sprint Mobile Wallet, Sprint is providing a safe, secure “container” for customers to easily use traditional payment methods while on-the-go. . .

Sprint thus facilitates payments between consumers and merchants and is a convenience on top of the existing payments "culture." For most US adults, this is the right model. AT&T's is not.