Tanla Solutions Ltd. has launched a set of programming tools to allow micropayments within smartphone applications.
The Indian software developer's TPAYmobile is an application programming interface (a package that can be written into any app with a ready-made kit) that lets programmers handle payments on phones running Google Inc.'s Android, Microsoft Corp.'s Windows and Research In Motion Ltd.'s BlackBerry operating systems.
Other companies, including Visa Inc., are trying to get a bigger profile on mobile devices by offering programmers the tools to create the applications and bring them to the market — and attract revenue every time a user makes a payment within those apps.
"It's a classic case of who makes money in the gold rush: the people that actually did the gold rush or the people who sold the shovels along the way?" said Brian Riley, a research director in the bank cards practice at TowerGroup. "There are a lot of opportunities" in mobile payments, he said.
TPAYmobile, announced Monday, is the latest iteration of a product called License Manager that worked only with Nokia Corp. phones, Tanla spokesman Deepak Kadambi said. But even the updated product has its limitations.
It cannot, for example, be used with apps that run on Apple Inc.'s iPhone, because of Apple's policies around collecting payments. TPAYmobile is also not being offered through carriers in the U.S., forcing consumers to enroll with a credit or debit card instead of routing charges to their phone bills.
Despite these issues, Tanla says the strength of the TPAYmobile is its flexibility.
"Other payment systems don't allow you to actually choose how you want to sell your application," Kadambi said. "With TPAY you can chose to charge X amount of dollars and [have users] play it for a week, play for three months."
On March 1 Visa bought PlaySpan Inc. for $190 million in cash. The acquisition gave the card company a bigger role in growing markets such as online games and social media.
Unlike TPAYmobile, which allows programmers to charge credit cards directly for their wares, PlaySpan sells a virtual currency that can be used to pay fees and make purchases within many popular computer games, such as FarmVille and EverQuest.
Players can buy cards loaded with this currency in stores and use the stored value as an alternative to entering credit card details online.
Other companies are trying to attract developers, but in different ways.
MasterCard Inc. rolled out a beta version of its own developer's portal in January. The Purchase, N.Y., company invited a handful of application programmers to participate.
These developers get access to MasterCard's payment network and code for creating discounts for MasterCard purchases. Visa has a similar platform.
Still other platform owners are developing their own capabilities, Zilvinas Bareisis, a senior analyst for Celent, said by e-mail.
Games are the main opportunity, since "as a consumer you want to be able to buy that most powerful gun without leaving the actual game itself," he said.
But as vendors seek to improve convenience, they must address consumers' security concerns, analysts say.
"Consumers need to feel comfortable with the [card] brands and recognize the brands," said Beth Robertson, the director of payments research at Javelin Strategy and Research.
"If you are trying out a new game and a new payment option, the one benefit that the providers have going in their direction is the consumers are active online and mobile users," she said.
