Paying for meals by mobile phone
By CNN's Tom Bogdanowicz
LONDON, England (CNN) -- Circus is a busy London restaurant with a fashion-conscious clientele, where innovation is part of the repertoire.
But this month it's not what you eat but how you settle the bill that's unusual.
Circus and mobile payment system Paybox are celebrating the introduction of cellular phone payments for meals. All the waiter needs is your mobile phone number, and you confirm the transaction with a personal code.
You can also use the system to send money to another person. Here's how it works: Enter a service number, the phone number of the person you're sending money to, the amount you want to send, and an authorisation code. Then hit the send button, and you'll receive a confirmation of the transaction on your mobile phone.
Although Circus only has a handful of customers paying by mobile so far, it welcomes the system -- saying that security is the attraction. With mobile payments, no one can blame a waiter for copying financial details.
"For many years now we've had restaurants being blamed for credit card fraud, and I'm so pleased that a system like this has come along. Because from a security angle it is virtually, I would even say 100 percent foolproof," says Angus Agnew of Circus.
German firm Paybox, which offers the service at Circus, has half a million users across Europe and offers access to 6,500 retail outlets.
Together with rivals in the mobile, or m-commerce field like PayPal in the United States and Spain's Movilpago, Paybox is targeting the world's 500 million mobile phone users.
"If you look at the size of the m-commerce market, you will see that (it) is set to grow exponentially," says Aron Daloki of Paybox.
"So we would actually welcome some credible competitors who can help us in raising the awareness of m-commerce and help customers be educated."
But while a number of firms are positioning themselves to become the Visa or American Express of mobile payments, analysts warn that the payoff could be a long time in coming.
Consumer acceptance or resistance is a key issue. Consultancy Forrester says that even allowing for rapid growth, mobile payments in 2005 will only account for half of a percent of European consumer spending.
"Just to take one example of French and German mobile consumers, only 8 percent of them feel comfortable and secure with the mobile device as a payment mechanism, and that's a very low proportion," says Charlotte Hamilton of Forrester.
"And only about 15 percent of them ever envisage using the mobile device for payments."
Entry into the game by established names like Visa and MasterCard, which are both working on pilot mobile projects, could spur confidence in mobile payments.
Smaller companies like Paybox deserve credit for pioneering mobile payments. But ultimately it could be the credit card giants in conjunction with wireless operators that shape the future of the industry.
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