(by Dr. Goldfinger)

Global mobile commerce revenues are tipped to grow from USD 6.86 billion in 2003, to USD 550 billion by 2008, according to research firm Telecom Trends, and US startups such as Massachusetts-based firm Mobile Lime are chasing the opportunity. Technology from Mobile Lime enables several hundred Boston-area consumers to use their cell phones to make payments at about 36 stores, restaurants and in taxis owned by the Watertown Taxi Fleet. Most mCommerce revenues currently derive from the sale of digital content, but through 2008, the proportion of phone-based purchases in stores is predicted to increase.

To catalyze consumer adoption of its service, Mobile Lime offers substantial discounts on purchases at selected retailers and the ability to collect loyalty points. When making a purchase, end-users enter the retailer’s code into the phone with their PIN, before giving the handset to the retailer to complete the sale, for which payments are charged to a credit card or deducted from a prepaid account. Compete analyst, Adam Guy however warns that “the risks and the costs of carriers being involved in mobile commerce outweigh the consumer demands”, as carriers do not want to be banks, nor to bear the associated risk.

Boston cab firms can now accept mobile payments powered by Mobile Lime technology under a joint initiative between Watertown Taxi and Mobile Lime. Going forward, Watertown Taxi plans to set up as a payment-processing agent for other taxi firms wanting to accept mobile card payments and benefit from the correlated increase in cab fare tips. Any of the 160 million US cell phone users visiting or living in Boston can register for the service, which is believed to facilitate faster payments than regular card transactions while providing in-built security mechanisms.