Payvia Inc.'s newest clients — Skype, OnCam and Bright — demonstrate a growing appetite for charging payments to consumers' phone bills.
Skype is a Microsoft-owned video chat service, OnCam operates a social video site and Bright has on an online career site. The companies join a 100-merchant client base that includes gaming, social media, streaming video, dating, communications and online service sectors, Los Angeles-based Payvia announced April 25.
Payvia does not plan to carry its momentum with digital companies into a push for mobile payments for physical goods — at least not yet, says Payvia CEO Darcy Wedd.
"Today we are solely focused on the digital goods and online services realm," Wedd says. "That could change in the future but we'll have to see how the technology grows and gets adopted by consumers."
Payvia's service allows users to charge purchases of digital goods and services to their phone bill. Payvia has to consider what people are comfortable with putting on their bill to determine the right approach for the future, Wedd says.
Consumers are accustomed to mobile phone bills of $100 on average, making it difficult for carrier billing companies to facilitate larger sales, says Richard Oglesby, senior analyst and mobile pay expert with Boston-based Aite Group.
"Carriers are not banks, so they are not in the business to deal with large purchases," Oglesby says. "They don't want to take on the credit risk of larger monthly bills."
In the same vein, Payvia and its rivals also are not banks, Oglesby says.
"They are technology providers, so there is some potential for them on the technology side in mobile wallet development," Oglesby says. "They could operate as a secure bridge from the mobile device and mobile wallet to the banks."
Payvia is positioning itself to take advantage of the next generation of HTML5-based software, Wedd says. HTML5, the latest version of the HTML markup language, allows developers to create apps that work on multiple platforms.
"The app stores of today are not only limited in the sense that they are a closed environment, requiring developers to create multiple apps for each store, but they also take 30% of developers' revenues," Wedd says.
Creating a universal HTML5 app that sits outside of that environment reduces the amount of work and investment, and opens the door to additional revenue opportunities, he adds.
Wedd would not disclose Payvia's fees, saying only that his company "takes a much smaller cut than 30%" from developers and merchants.
Payvia entered the market with eight years of experience as a part of carrier-billing network provider m-Qube Inc., launching its service in July of 2012 with T-Mobile USA and Sprint USA. Payvia now operates with all major U.S. carriers.
Two months ago, Payvia revealed it had become a partner with MACH, a European carrier-billing provider, to share technology and carrier relationships in both countries.
"Only Skype came through our partnership with MACH, as we provide the U.S. connections for MACH's direct carrier billing solution, which Skype uses to let consumers purchase credits via mobile," Wedd says. The other new customers signed up for Payvia's capability to integrate with existing online checkouts, Wedd adds.
Consumers can use Payvia online with a desktop computer, laptop or tablet, or through a mobile phone, Wedd says.
When choosing a "pay by mobile" button at checkout with an online merchant offering Payvia, the consumer is asked to confirm the mobile phone number prior to authorizing the transaction and having the bill sent to a carrier.
If using a computer, the consumer enters a mobile phone number and receives a four-digit PIN from Payvia. The consumer uses the PIN to authorize the transaction.
The carrier billing market has become more competitive with the likes of Boku and even PayPal, which added PayPal Carrier Payment Service a year ago, shortly after eBay Inc. acquired carrier billing technology company Zong.
The new customers are a positive sign for Payvia, even though "the natural barriers for carrier billing to advance to physical goods still exist," says industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group, LLC.
"Payments is such a big market, you can always find a small niche and do well there," he adds.