Change of Market Structure for Mobile Payments Services in Sweden - The Case of SMS Tickets

Mobile operators and mobile service providers like SMS aggregators and ticket providers have until now been the main actors in the provisioning of SMS tickets for public transportation services. The consumers have been charged for SMS payments using the mobile phone bill. Due to financial regulation (EU directive) mobile operators are no longer allowed to handle payments and transactions for non-telecom services without being a payment provider implying registration of the customers. In Sweden the mobile operators have joined forces and formed a joint venture that offers a separate charging solution, i.e. not using the phone bill. However, this new joint venture has in most cases not been involved in the public procurement of new ticket and payment solutions initiated 2012 by the Swedish transport companies. The outcome is that a number of new actors and constellations have entered the mobile payment business. In the paper the change of the market structure for SMS payment services in Sweden is analysed. The motivation for the research is to contribute to the understanding why mobile payment services do not take off on a large scale in Sweden although the technology and solutions are here. The case with the transformation of the SMS payment market provides insights about some of the barriers. There is no common national SMS payment solution. Users have to register accounts with a number of different payment providers. The registration process is an obstacle, the SMS payments have decreased with 50 – 90% compared to the same period 2012. We can see a fragmentation of the Swedish mobile payment service market. Due to the multitude of different solutions the incentives for both consumers and merchants to extend these payment solutions to other areas would be low.