Review: Mobile Payment Has Growing Pains

Review: Mobile Payment Has Growing Pains

Sep 15, 8:55 PM (ET)

By BRIAN BERGSTEIN

(AP) MobileLime president & CEO Robert Wesley poses for photos holding his cell phone in front of credit...Full Image

BOSTON (AP) - The logic is solid behind MobileLime, a new service designed to let you leave your wallet at home - or at least some of the cards in it - and instead use your cell phone to buy things. Too bad the service, in my tests around town, didn't seem quite ready for the mobile masses.
As a concept, buying stuff with your cell phone - more on how you do that in a second - seems like a great idea. For one, who leaves home without their cell these days? And with identity theft a growing concern, who wants to hand their credit card over to a stranger?
The concept already has traction in Japan, where NTT DoCoMo says its mobile wallet service has 3 million users. Compared to Americans, Asian consumers are far more accustomed to using advanced phone services.
The people behind MobileLime, Watertown, Mass.-based Vayusa Inc., hope to change that.

(AP) MobileLime president & CEO Robert Wesley poses for photos holding his cell phone in front of credit...Full ImageThe service exists for now at 80 stores in the Boston area. Vayusa claims it has signed up 10,000 users, and CEO Bob Wesley says he expects that to increase dramatically in coming months with nationwide additions to the network.
MobileLime works with any cell phone, regardless of manufacturer or wireless carrier.
Here's how it operates:
_A fast and painless online registration.
_You transfer money into a MobileLime account and use it like a prepaid debit card. Or you set up the system so each transaction is charged to your credit card.

(AP) A MobileLime's sign is seen on the entrance of Angora Cafe in Boston, Wednesday, Sept. 14, 2005....Full Image_Once enrolled, you can use the Web site to spot coupons at participating merchants or track your progress in customer loyalty programs. For example, a store might give you $5 off when your cumulative spending there through MobileLime surpasses $75.
_When you're ready to buy something, you pull out the cell phone and call MobileLime. An automated voice greets you by name. You key in your four-digit PIN followed by the location code, a short number posted in the store. Then you give the cashier the last four digits of your cell number.
It's pretty fast - though with all those steps it's slower than cash, unless you begin the keypunching even before the clerk begins to tally your order.
Most attractive are the discounts many MobileLime merchants offer in exchange for being able to track your spending. I got two freshly made smoothies for a total of just $1.09 thanks to the combination of two such deals.
But that's about the only real advantage. It's not like you actually can leave your wallet at home.
I work in downtown Boston, and yet there was only one place nearby that accepted MobileLime: the KaBloom flower stand in South Station, the city's main train depot.
I don't really hold that against MobileLime, because it faces a classic chicken-and-egg problem: Consumers generally don't want to sign up for a technology unless it is usable in lots of locations, but merchants won't bother to adopt a new scheme unless lots of potential customers are on board.
What bothered me more were the service's growing pains.
In my first attempt with it, the sales attendant at KaBloom insisted I couldn't use MobileLime to buy things. She thought it was merely a way to record my purchases so KaBloom could grant me rewards as my spending increased. Paying with the phone? That would leave her register short at the end of the day, she said.
I persisted, and tried to explain, but she stood her ground, and quickly the situation became ridiculous. Someone behind me was waiting. Unwilling to make a flower-buying commuter late for her train, I dropped my pleas, plunked down cash, and left.
Another time, in a creperie in nearby Brookline, I called MobileLime and my PIN got rejected. Again, I ended up paying cash.
Almost certainly, I had simply forgotten my PIN. Not MobileLime's fault, of course, but a downside of the service. So I returned to the Web site and changed the PIN to one I'd be sure to remember.
Then I ventured to a coffee house in Cambridge and tried again.
I ended up making four calls to MobileLime while my cafe au lait was in the works. Each time I entered the PIN, I got silence. Without warning, the call would just drop.
Once again, cash remained king.
Later I was told that the company had made a switch in its computer systems that caused a 20-minute loss of service, which happened to coincide with my test.
From then on, MobileLime worked fine. Discounts due to me were automatically applied. Within seconds of transactions, a receipt was text-messaged to my phone and sent to my e-mail - a setting that can be turned off if you choose.
But the fact remains that the process of calling and punching in codes is too cumbersome.
The real future of mobile payments probably will entail having a radio-frequency chip embedded in the phone casing and letting users just wave the device past checkout-counter readers. Indeed, that technology is already used in Japan's phone-payment services and is beginning to emerge here, too, in new "contactless" credit cards.
To his credit, Wesley says MobileLime is exploring the technology. Until then, I'll hang on to my wallet.