A joint venture formed by Norway's three dominant mobile phone carriers is testing a new, rebranded version of its mobile wallet, designed to lower the barriers merchants and consumers face when first using a mobile phone for payments.
Norwegians have been using a version of the wallet since 2012, but it has operated largely in the background. Users pay by text message and charges show up on their mobile phone bills. About 2,000 merchants accept this system, which handled roughly 75 million transactions in 2014.
The key differentiator for this system, now called Strex, is the way it handles enrollment. With Strex, merchants will have a single commercial and technical arrangement, instead of several. No hardware or software is required. Consumers need to provide only their existing phone numbers, provided the consumers are customers of the three telcos backing Strex
"We think we have a better solution," said Hege Kosberg, CEO of the Oslo-based joint venture. Formerly known as mPayments, the venture was rechristened in late 2014 as Strex.
The new brand will encourage consumers to see the company as a separate payment service, as well as help it compete more effectively. The name combines the Norwegian word straks, meaning immediately or instantly, and exchange.
The new system is designed to be easier and less costly for merchants, Kosberg said. She declined to discuss the cost, but said it is competitive with credit cards.
The streamlined enrollment for merchants is an improvement over the earlier mPayments setup, Kosberg said. With mPayments, merchants had to strike one commercial arrangement and three technical arrangements, one for each phone company backing the joint venture: Telenor Group, TeliaSonera and Tele2. They represent more than 90% of mobile phone market in Norway, Kosberg said.
Kosberg described the new system as ideal for vending machines, self-service parking kiosks, electric-car charging stations and other situations where people would normally use cash or a merchant's payment app. Consumers can pay via text or open up the merchant's app and select Strex as the payment method.
"A lot of people just choose the text because it's so easy," Kosberg said. "It's easy to find and if you are in front of a vending machine, maybe you don't want to download an app. You just want chocolate, you're hungry and you're late for work."
Ten merchants, many with multiple locations, are testing the new system, Kosberg said. Consumers can pay Strex from their phone bills or request a separate invoice from the company.
By this summer, Strex plans to give consumers the option to fund Strex payments directly from a credit or debit card, Kosberg said. The company also hopes to extend the service to customers of other Norwegian telcos.
Strex is focused on Norway for the moment. But, Kosberg said, the phone companies behind it are active in other countries. Telenor, for example, operates in other Scandinavian nations, as well as in Asia and eastern Europe.
"They are already testing different models in some of those countries," Kosberg said.