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Table of Contents

Lead Story

Square: Passing fad or market changer?

Patti Murphy
ProScribes Inc.


Industry Update

PCI update addresses holes in wireless security

SmartMetric initiates suit against Visa, MasterCard

Eight payment companies on Inc. 500

Is self learning the next step in the fraud fight?

Trade Association News


An interview with Alex Goretsky

Ken Musante
Eureka Payments LLC

Research Rundown

Alternative payments in the mobile space

Alex Grinberg

Envisioning an advertising-sponsored mobile payment network

Richard K. Crone
Crone Consulting LLC

Website in your pocket

Selling Prepaid

Prepaid in brief

Mobile prepaid builds bridge for underbanked

FTC redresses consumers for prepaid card scam


Debit after Durbin

Patti Murphy
ProScribes Inc.

A fresh perspective on POS innovation

Brandes Elitch
CrossCheck Inc.


Street SmartsSM:
PCI essentials for MLSs

Bill Pirtle
MPCT Publishing Co.

How to plan your dream life

Dale S. Laszig
Castles Technology Co. Ltd.

ISOs and social media: Staying in compliance

Adam Atlas
Attorney at Law

10 tips for building a stronger LinkedIn profile

Marc W. Halpert
Your Best Interest LLC

Making use of receipt real estate

Stephen Enfield
POS Supply Solutions

Peering into payments' not so crystal ball

Nicholas Cucci
Network Merchants Inc.

Company Profile

Point of Sale System Services Inc.

New Products

A gateway to profit

Nationwide Payment Solutions LLC


Your merchant ground control unit



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

September 26, 2011  •  Issue 11:09:02

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Alternative payments in the mobile space

By Alex Grinberg

When e-commerce was in its infancy, few options existed for making payments online, with credit cards being the de facto method of choice. However, as this industry grew, so too did the number of payment methods available, leading to a crowded market of alternative payment providers. Today, there are close to 30 alternative payment methods for e-commerce transactions.

Today, the same thing is happening in the world of mobile payments or m-commerce. Driven by the rapid growth of smart phone adoption, the mobile payments industry is heating up, and companies are rushing to innovate and develop new applications to grab a share of this burgeoning market.

According to Yankee Group's latest Mobile Money Forecast, the value of global mobile transactions will grow from $241 billion in 2011 to more than $1 trillion by 2015, a compound annual growth rate of 56 percent.

Mobile payment contenders

The four primary methods of mobile payments today are:

  1. Premium short message service-based transactional payments
  2. Direct mobile billing
  3. Mobile web payments
  4. Contactless, near field communication

While there is plenty of innovation among these payment options, the market is still young, and several barriers need to be overcome before we will see widespread adoption. First, consumers are reluctant to use mobile payments because of security and privacy concerns. According to the latest Consumer Reports findings, the "continuing launch of new forms of payment options does little to offer consumers guaranteed protection against unauthorized transactions."

In fact, despite the hype around mobile payments, a recent survey by Consumer Reports National Research Center found that very few consumers - 5 percent of the respondents - use the service.

Another barrier to entry is the lack of interoperability among mobile technologies. With so many vendors rushing to develop superior solutions and be first to market, it is difficult for mobile payments to be standardized. Lastly, while merchants and ISOs are receptive to new payment methods, they are looking for solutions that enable them to authenticate payments and reduce interchange fees.

OBeP alternatives

A new category of alternative payments is emerging in the mobile space that addresses many of these challenges. Online Banking ePayment (OBeP) systems allow consumers to make purchases using their most trusted financial institutions - their banks. With this approach, consumers don't have to share their personal information with merchants and can better manage their money by paying for goods directly from their bank accounts.

These types of networks are successfully growing in The Netherlands, Germany, Canada and Columbia and are starting to gain traction in the United States. Merchants and ISOs benefit from lower interchange fees as well as payments that are authenticated in real-time and guaranteed. These payment options can lead to increased customer loyalty and repeat transactions.

To address the technology challenges, the International Council of Payment Network Operators was formed by a group of companies to establish the rules and standards for joining the global payment networks together for the benefit of all involved.

No matter what payment options are available, consumers must feel comfortable using them in order for them to succeed. Just as it took consumers a long time to begin feeling comfortable transacting online, the same will happen in the mobile world. Consumers will demand convenience, privacy and trust from any alternative payment method.

If the promise of simplicity, speed and security for the consumer counts in traditional payments, then these three simple propositions are paramount for any mobile alternative to make a visible difference. A payment type that is fast, easy and secure for the consumer; improves conversion and offers guaranteed funds for the merchant; and drives revenue for the bank is a win-win for the industry and will move the mobile payments industry forward.

As Chief Executive Officer and founder of eWise, Alex Grinberg has established the company as an international provider of innovative payment services and solutions for the financial services industry. Prior to eWise, Alex held a number of senior legal and operations roles with Oracle Corp. in Australasia and Europe. You can reach him by email at or by phone at 720-258-4300; the eWise website is

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Simpay | USAePay | Impact Paysystems | Board Studios