The M-commerce “Winds of Change” sweeps the U.S.


The mobile commerce revolution sweeping the rest of the world appears to be only now hitting U.S. shores with further proof forthcoming in my recent interview with Michel Poignant, CEO Paymotech, who confirmed that his mobile wallet creation called Paytoo Mobile was already available in 250,000 wireless stores elsewhere in the world.

His team spent a paltry $5 million cleverly building a turnkey GSM mobile wallet and Telecom suite of services to slash transaction fees and allow marginalized individuals with no bank account or credit card to transfer cash to anyone else around the world provided they also have a PayToo account.

He used the recent CTIA show in March to officially announce plans to capture new American users in one of the most traditional banking sectors in the world.

At the time of going to press, Paytoo is now available in over 35,000 wireless U.S. stores. He has basically left the United States until last in his long-term strategy to capture a global audience.

“Our target market is the 5-billion people who have a handset. And inside this community 3 billion people who do not have any bank accounts and cannot buy online, but who are funding transactions valued at $300-billion based on recent statistics released by financial institutions,” said Mr. Poignant.

Numbering only 35 global employees, including 7 programmers, the Swiss Paymotech parent group was launched on the Frankfurt stock exchange in 2008 after three years of development.

In 2007, a mobile “virtual” wallet was built on top of the existing (and highly successful) Yackie Telecom division, which already offered mobile phone solutions, VoIP and SIM cards.

Built exclusively on open-source, including PHP, Ajax and MySQL, the project costs have been kept low while also aggressively pursuing a policy of tightly controlling the network, technology and services to slash transaction fees for consumers.

Paytoo’s core attraction is the ability to elegantly handle international micro payments and cash transfers without getting hit with large transaction fees or requiring a traditional bank account.

Metaphorically and literally, this puts it on the side of the poor, especially in third world regions where cash transactions often range between $1-2 and saving one penny may literally be life saving.

Coincidently, Mr. Poignant lists Gandhi as his sole inspiration under the public section of his Facebook profile.

While recent press releases and blogs have outlined the obvious advantages of a unified mobile interface for low-cost prepaid voice calling and cash transactions, there are other areas, which I find more interesting.

This includes the interesting angle of partnering with British-based PalmTree technology shop to offer ‘cloud-ready’ secure, multi-factor LiveEnsure authentication for users logging into the PayToo system from their phone.

Falling under the umbrella term Software-as-a-Service (SaaS) PalmTree gives Paytoo robust ways to hook into cloud authentication services using their flagship product LiveEnsure, without having to build their own version.

“Don’t just identify your users. Authenticate them,” is their catchy call sign. Suffice to say that security is one of the biggest brakes on m-commerce adoption rates.

If Smartphones are set to become one of the primary game-changers in terms of how users access the Internet by 2013, cloud computing may be even bigger, offering new ways to drive down costs and complexity as I.T resources are pushed out into datacenters in the sky.

Smartphones, m-commerce and cloud computing thus represent the holy trinity driving innovation in the technology sector. And e-commerce security is the final hurdle they need to cross, especially in the United States.

For this reason Mr. Poignant confirmed Paymotech has contracted with local Miami firm called AML Compliance to leverage ‘fast track compliance’.

“By implementing a Fast Track methodology, compliance officers can achieve a level of simplicity that will allow them to complete their tasks in record time, without compromising the quality of their work and their results,” stated the AML website.

Mr. Poignant also told me that besides the mission statement of providing the world’s first truly global mobile wallet, his team is also looking at future ways to vertically integrate location based deals, since, as he put it, “our system knows what people are doing, what they are buying, where it’s located, where its coming from and where it’s being transferred.“

(Author’s note: Check out this expired experiment between FourSquare and American Express allowing the younger generation to register their Amex cards in the Foursquare system to get access to special offers from merchants who are also Foursquare participants.)

This direction has also manifested itself in a personal project of his called Muzicol, which aims to connect Songwriters directly with fans who may wish to buy their music. Anybody who signs up with Muzicol account automatically gets assigned a PayToo account (and vice versa) to facilitate the flow of small payments without large fees.

Paytoo is also working with a small on-demand Web HDTV startup, which he claims has been injected with $16 million in cash from Intel.

“The service provides an Internet set-top box to users who can search online for HDTV web content available through our partner’s global relationships. There are also plans to stream location-based content,” he said..

“The current problem facing our partner is how to sell web content that’s sometimes priced as low as 50 cents to users who do not have a bank account or credit card. That’s where Paytoo Mobile enters the picture.”

While he was reluctant to disclose the name of the HDTV partner since negotiations were still at a sensitive stage, he did suggest that the service already had 500,000 international users. He hopes to see this number eventually climb to millions with the PayToo payment icon clearly visible on the bottom right-hand corner of the screen.

“We are always talking to the same customer: one who needs to have content but does not have solution to make the payment but who are sending money all over the world, calling long distance, who need to save money, and need an elegant way to make payments to a stores (or a websites). Paytoo provides this all-in-one-system in the least expensive way.”

Mr. Poignant also stated that Paytoo has plans to shortly hook up with an African bank to deploy Paytoo in 12 African countries.

“Further, we are also finalizing the validation of our NFC connection in the United States. We will shortly release a NFC phone (with the US SIM and Paytoo embedded inside) by May 2011 for less than $49 per mobile phone.”

Author’s note: Check out this recent article by TechCrunch entitled The Ever-Elusive Mobile Wallet: Why NFC Chips Are Overhyped And Will Underdeliver which overviews the entry of Google into the Mobile Wallet sector and stormy debates around NFC technology. According to Paytoo, NFC is simply one component of their overall strategy and they are busy rolling out new NFC features for users. Paytoo now has a 17-month jump on Google, but the search giant has way more than five programmers so let’s see where things stand in a few months.

This interview was conducted, produced and delivered by Jason Stevens, a tech blogger operating out of Fort Lauderdale, Florida. Jason is a regular contributor to the following sites: | | You can also follow Jason on Twitter at _Jason_stevens_

2 Responses to “The M-commerce “Winds of Change” sweeps the U.S.”
  1. Ross 12 April 2011 at 12:04 pm #

    Great article.
    Jason one thing – the Retweet button on this page does not work.

  2. admin 14 April 2011 at 4:19 am #

    Cheers Ross.

    Also, the TweetMe button shoiuld be operational now.

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