A former Sprint executive will now lead a Korean company’s expansion into the U.S. mobile-payment market.
Pragnesh Shah, who was Sprint’s vice president of product innovation, will become president and chief executive officer of Mobilians International Inc., the U.S. arm of Mobilians Co. Ltd. The well-established Korean firm will establish the headquarters for its new U.S. operation in Northern Virginia.
The company allows customers to pay for merchandise they purchase over the Internet by using their cellular phones. This way, people do not have to input their credit or debit card information into a Web site, explained Shah.
Customers plug their mobile-phone number and a portion of their Social Security number into those Web sites that accept the payment method. Next, a text message is sent to the individual’s phone with a confirmation number they must also enter. The charges eventually show up on the person’s cell phone bill.
“It’s a very quick and easy way to check out without fraud and identity issues associated with it,” Shah said.
Mobilians is negotiating with companies, which would offer the payment method, and cellular-phone carriers that would participate in the billing process. It expects to start offering the service later this year, Shah said.
Mobilians will make its money through merchant fees on each transaction, though Shah said those are cheaper than what credit companies charge firms. The service will be free to users.
Paul O’Keefe, a partner in East Brunswick, N.J.-based consulting firm BusinessEdge Solutions, said mobile commerce is nothing new, and companies are each trying different strategies to harness it.
“It’s a crowded space, and many have come and gone since 2000,” O’Keefe said. ” I haven’t seen one strike pay dirt yet, though that doesn’t meanit won’t happen.”
San Diego-based Transaction Wireless is among those that will offer services this year. The company differs from Mobilians in that it allows customers to store gift cards on their cell phones, CEO Steve King said Monday.
