A company that routes payments between telecom carriers and companies that provide other services for land lines says its adaptation of its model for mobile phones will enable people to charge purchases from third parties to their monthly bills.
Billing Services Group Ltd., a San Antonio telecom payments clearing house, is expected to announce its Bill2Phone service for mobile phones today.
Consumers can already buy a variety of games, ring tones, and other forms of digital content from their mobile carriers, and the charges appear on their monthly bill.
Randall W. Brouckman, BSG's chief executive, said the new version of the service will allow people to buy the same types of digital products from other providers but continue to route the charge to their phone bills.
Mr. Brouckman said Bill2Phone already has the support of the nation's major wireless carriers, which believe that offering people access to wider range of e-commerce providers will boost consumers' use of their phones. He said the service could eventually be used to buy more tangible products from a broad range of merchants.
BSG is aiming the Bill2Phone mobile service at the underbanked, such as cell-phone-toting teenagers, and the unbanked, such as immigrants, who are often heavy mobile phone users, Mr. Brouckman said.
Though he acknowledged that charging payments to a phone bill could cut banks and credit card companies out of the payments chain, Mr. Brouckman said that he would welcome participation from banks, which could accelerate payments to the third-party providers.
BSG plans to announce the mobile service at the Digital Hollywood conference, and has already lined up three or four merchant customers.
The company announced a similar Bill2Phone service in March that lets online merchants charge payments to consumers' home phone numbers. But analysts said the service has been coolly received, in part because of the delays between when a customer makes a purchase and when the payment actually settles, which can take more than a month.
Mr. Brouckman said the Japanese telecom NTT DoCoMo is the "perfect model" of what BSG wants to offer here. DoCoMo phones can make a wide range of payments, including point of sale and vending machine transactions, which later appear on the customer's phone bill.
BSG was born from the breakup of the Bell telephone system in the mid-1980s, to handle payments between carriers, such as when a consumer has local and long distance services from different providers.
That remains BSG's primary business, and Mr. Brouckman said BSG has 85% to 90% of the U.S. market for handling such payments.
Mobile carriers today are increasingly offering digital downloads to cell phones for a fee, but they tend to limit access to their own mobile shopping portals. Consumers can make purchases from other providers, but those charges cannot be routed to their monthly statement, Mr. Brouckman said.
"That's where the third-party clearing house fits in," he said. "When we add a charge to the phone bill, everybody in the value chain, including the carrier, makes some money."
The major carriers — AT&T, Verizon, Sprint, and T-Mobile — support the broader inclusion of third parties in phone bills, Mr. Brouckman said. "Most everybody has a home phone, and most everybody pays their phone bill."
But settlement can take a while, he acknowledged.
"Carriers tend to pay the provider after they have the money from the customer," Mr. Brouckman said. "I do believe there is an opportunity for banks to play in this market, getting the money to the merchant sooner than the carriers."
Bruce Cundiff, a research analyst at Javelin Strategy and Research in Pleasanton, Calif., said BSG faces a marketing challenge in persuading merchants to sign up for its service. The existing Bill2Phone service has not encouraged many Web sites to accept a phone number rather than a card number for online purchases.
"We're not seeing a credible threat" to bank-issued cards, he said, though there is long-term potential.
"It's a niche play right now, but that niche is pretty lucrative."
