Ericsson courts online publishers with mobile payments

The system would let people pay for content without a credit card or the need to create an online account

Ericsson will soon launch a platform designed to let consumers buy online content such as news stories with the charge billed to their mobile phone rather than other payment methods, such as a credit card.

The platform, called Web PIN Opt-in and due to launch on Oct. 26, is designed to make it easier for consumers to buy online content, said Peter Garside, the U.K. and Ireland director for Ericsson's Internet Payment Exchange (IPX) division.

Ericsson's platform is designed to solve a few problems associated with selling content online. First, potential customers may be dissuaded from buying content if they don't have a credit card. Also, some customers may be uncomfortable with using a payment card online due to security issues.

Additionally, paying for content online usually requires creating an account and filling out a Web-based forms as well as picking a username and a password for yet another Web site, Garside said.

In Ericsson's payment scenario, a user would see that a publisher is selling a story they're interested in. To read the story, the user would enter their mobile phone number into a transaction field. The operator would then send a one-time PIN (personal identification number) via SMS (short message service).

Once the PIN is entered into the transaction form, the user would have access to the news story, and the charge would show up on that user's mobile phone bill. By using a mobile phone, the user doesn't have to authenticate themselves since the operator already knows who they are, Garside said.

The system works even if a mobile subscriber is out of their home country. For people who use pre-paid phones, the cost of a story would be deducted from their balance.

Publishers could use the payment system in a variety of ways. For example, if someone already subscribes to the print edition of a publication, they can enter their phone number, receive the PIN and then get access to all non-free content on a Web site.

It will be up to the individual publishers how they want to charge per story. Some newspapers such as the Financial Times and the Wall Street Journal offer a mix of free and paid content.

The revenue from sold articles or other items will be shared between a publisher, Ericsson and operators.

So far, Ericsson has done the technical integration of the platform with 50 operators in 15 countries. Now, Ericsson will approach publishers to see if they're interested in the system, Garside said.

Those deals may come slowly, however, as publishers are still grappling with their Internet strategies. The overwhelming majority of online publishers give most if not all of their content away for free in hopes of capitalizing on advertising.

However, while online advertising revenue has shown promise, it has not been able to make up for declining print advertising revenues.

"We see this as a great opportunity to monetize their online content," said Fredrik Agrenius, global solutions manager for Ericsson IPX.

Countries where Ericsson has integrated the platform with operators include Denmark, Estonia, Finland, Germany, Indonesia, Ireland, Italy, Latvia, Lithuania, Malaysia, Norway, Spain, Sweden and the U.K.

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