Mobile Payment – a Comparison between Europe

Prepaid mobile phone plans are gaining in importance in the U.S. and are already well established in Europe. Aggregation of a certain number of Micropayments is the preferred business model for wireless carriers to leverage the existing payment infrastructure with a mobile payment solution. There exist various Payment Scenarios that are based on the Wallet metaphor, and in general, they can be used to implement flexible and scalable solutions. Person-to-person transactions are already very popular in the U.S. as a consequence of the widespread use a payment instrument for auctions at eBay. This scenario is most often discussed as a valuable alternative to check payments in the U.S. For several reasons, the U.S. has been slower to adopt wireless technology than Europe. First, landlines in the U.S. are dominant and high personal computer penetration prevents people from using mobile phones to communicate, either by voice calls or text messaging. Second, prices in the U.S. favor landlines, even though prices for mobile phone plans in the competitive market have been cut many times in the past. For mobile payment, the fact that social patterns matter could affect the adoption of this form of payment in Europe, because in several countries, solutions already exist. The factors that form the concept of Diffusion of Innovation Theory eventually can be seen as the critical success factors of mobile payment. ii Whereas some emerging and existing mobile payment systems will come along with their own processing infrastructure, several will be based on existing payment networks that have initially been designed for another purpose. In Europe, credit card operators launch mobile payment solutions to leverage their existing networks while in the U.S., operators of ATM networks and leading credit card processors even try to bypass existing networks. Unlike in Europe, where checks have de facto been banned from the market by charging high prices for the processing of this non-cash payment instrument, the U.S. partly supports innovative check processing solutions to leverage the ACH infrastructure. The European bank approach shows that customer's payment behavior can be influenced by a pricing policy. Meanwhile, European countries and the U.S. have switched to 2.5G networks. With the transition to 3G, interoperability within the U.S. should finally become reality. Commercial launches of 3G services have already started in both regions. Notably, the first U.S. carrier to launch a broadband wireless service seems to be attracting business customers and offering high …