Oliver, writing at Mobile Crunch says that mobile payment player, Mobile Lime, have raised $10 million in further funding. I share Oliver’s complete bafflement.
I wrote about Mobile Lime before in the context of a pretty thorough analysis of the mobile payments sector. I was pretty damning in my conclusions about the product’s usability and therefore chances of success. I explained that Buckley’s First Law of Mobile Payments is that if the transaction process is any more complicated than using a credit card or cash, it will never succeed.
The trouble with Mobile Lime is that it’s a awful lot more complicated than that. Not a bit more. An awful lot more. Like, you have to phone Mobile Lime to pre-approve a purchase.
Can you imagine having to phone MasterCard every time want to spend some money?
The usability was then tested “in the wild” by a journalist. And he showed that my predictions were pretty much spot on.
In both posts I concluded that Mobile Lime must “change or die” and I see nothing to dissuade me of that. So I wonder what the investors know that isn’t public? Or are they just throwing in more money hoping to rescue their original funds somehow?
At some point Mobile Lime and their investors will come to the same conclusion I’m afraid because “change, die or keep getting more investment” isn’t much of a long term strategy.
By the way, I know that a lot of VCs read MobHappy. I know an entrepreneur who is just in a funding round at the moment who has a much better system - it really is as easy as using cash or a credit card and thus has the Buckley seal of approval. Let me know if you want an intro to him. And no, it’s not me 
Adding to the problem is that even credit card is too complicated for small purchases like ringtones, and also most kids and teens (the audience for ringtones) generally don’t have credit cards. The only thing that works is phone bill payment.
Hi…
When I looked at Mobile Lime myself at the beginning I thought the same: strange usability.
However looking deeper it occurred to me that this is not a company whose main focus is mobile payments, but targeted advertising.
See here: https://www.mobilelime.com/mobilelime/home.do?action=marketing
As such I believe that the ‘mobile payment’ part is just a means to get access to mobile phone numbers and purchasing behaviors.
With the business being mobile advertising, obviously the story changes (as well to the VC’s).
However I still think that this might not be the right approach as:
a) this business is a bit deceiving to the end user
b) still has a usability problem
c) assumes that you can send messages to consumers who’s number you collected without permission.
And I think that c) is a serious issue: All advertising pushed to a phone HAS to be in the context of a permission. Otherwise there will be a consumer backlash, if unwanted messages arrive just because you once used Mobile Lime (or any other service for that matter).
Thanks, Robert.
On the M-Commerce projects that I have worked on what becomes obvious is that payments solutions work when you are using it as a cash replacement. However the problem is that vendors have a wide range of payment methods already and why would they wish to add the complexity of Mobile Lime? The projects in South Africa and the Phillipinies have been a success as thay also have a method that allows users to turn credits into cash. Looking at Mobile Lime I have to say that this will be the factor that stalls take up.
Hi Russell
I think you are missing the point .. I think mobile lime has got funding not for the current system but for their NFC announcement (https://www.mobilelime.com/mobilelime/home.do?action=NFCrelease)
I blogged about the significance of NFC before
http://opengardensblog.futuretext.com/archives/2005/12/nfc_-_the_answe.html
In my view, mobile payments will become NFC based(as is already happening in Japan etc)
Kind rgds
Ajit
Ajit - thanks for the comment.
Yeah I did see the NFC thing and I agree with your overall market assessment. However, if the Mobile Lime team could launch such a shockingly bad service first time round, I don’t frankly have much expectation of them doing better next time.
In addition, $10 million is nowhere near enough to launch a credible NFC offering, in my view, as you need to install a hell of a lot of hardware to make it viable. The small merchants they have on board aren’t going to make that kind of investment, which means that they’ll end up paying for the hardware installation and run through $10 million quicker than a quick thing on Planet Quick.
“Change or die” is still appropriate however you want to cut it.
Russell
ahh .. but the point is .. your original assessment completely missed the NFC announcement - hence can’t be valid.
I believe this is a technology play - the investment is used to develop the technology. It may not be a market play at all ..
As a technology - I dont know who the competitors are - but see my post for global developments in the NFC space ..
Not sure if there is a US NFC player .. If not, this is a winner - purely from a tech standpoint.
Assessing this company from the market development standpoint is only half the picture.
I have been following NFC for sometime now - NFC = mcommerce - very soon - if it executes right
[...] So does PayPal do better according to the rapidly-getting-famous Buckley’s First Law of Mobile Payments, which says “If the transaction process is any more complicated than using a credit card or cash, it will never succeed” than other companies like Mobile Lime or TextPayMe? Not necessarily — particularly for users that don’t have credit cards and have to keep refilling their PayPal accounts and tracking the balance, which at this point it sounds like you can still only do from a PC. The Text to Buy stuff is getting there, though. [...]
Russel
Curious to hear what happened to your “entrepreneur who is just in a funding round at the moment who has a much better system - it really is as easy as using cash or a credit card and thus has the Buckley seal of approval”
Your 2007 predicitions are pretty hard on mobile payments penetration in the west, so I’m guessing the Buckley seal of approval wasn’t enough to get this entrepreneur off the ground?
I like your blog and I like what you guys are doing at admob.