Mobile Payments & MMS: Payvia Buys Mogreet

by Chuck Martin on May 25, 2013

By Chuck Martin

The mobile payments space just got a bit more interesting with payment provider payvia buying MMS company Mogreet.

While hardly household names, the two companies are well-known within their respective circles.

Payvia runs the largest direct carrier connected mobile platform in the U.S., which lets consumers pay for digital goods and services with their mobile phone, with the charges added directly to their phone bill.

For its part, Mogreet is known within its universe for its rich media messaging engine behind many well-known retailers and brands, such as Bloomingdales, Cox Media Group, ABC, Fox Television, Gamefly, Gymboree and Paramount.

The power behind payvia is that smaller merchants, who don’t have access to carriers to set up direct billing, can go through payvia so their customers can easily transact. Payvia collects the money from the carriers and pays the merchants.

Payvia already has more than 100 million unique mobile users and has paid out more than $2 billion in global mobile commerce revenue to merchants and developers, according to Darcy Wedd, CEO of payvia. He pointed out that the number of companies directly connected to carriers is limited and with the Mogreet addition, the payvia connection can be further leveraged.

In a conversation with Wedd several weeks ago, we discussed how an extraordinary number of mobile payment transactions are abandoned before completion, which various studies also have shown.

“Lots of credit card payments never finish the purchase,” he said.

James Citron, Mogreet CEO, echoed the view. “Every MMS we get, we get many times the open rate of an email,” he told me last week. “But conversion rates are so low on mobile devices.”

The strength of the merged companies looks to me to be the marriage of the carrier relationships and contacts of payvia with the brand relationships and existing campaigns of Mogreet.

What strikes me as even more interesting is the potential blurring of advertising/marketing and commerce. Messaging can be turned into easy transactions, without credit cards or data entry. This could be a powerful combination for friction-free commerce.

The big potential win for consumers is the ability to make payments easily, which could be triggered by an MMS message. For example, a large retailer could send rich media offers to opted-in consumers who could see the offer and with two taps make a purchase with the charge appearing on their next phone bill.

“This marries mobile payments with mobile engagement marketing” Wedd said last week.

At first blush, the obvious challenge would seem to be in consumers receiving overwhelmingly large phone bills, rather than purchase charges scattered among several credit card bills that may arrive at different times.

However, the carrier sweet spot across carriers is generally in the $1 to $30 range, said Wedd, meaning an excessive monthly phone bill would be unlikely.

“The challenge in the mobile eco-system is how do you drive the transaction,” Citron said. “Think about how hard it is to enter all the data in the credit card information.”

The combined company also presents the potential to expand globally. Wedd said that payvia already can transact in 40 countries and that the company has been in the carrier billing space since 2004. “It’s an efficient digital assembly line,” he said.

Though payvia can dramatically extend the international reach of Mogreet’s MMS platform, Wedd said he sees the major market being in the U.S., at least in the short term.

Payvia earned some street cred a while back when it became the exclusive mobile payments vendor for both Obama for America and Romney for President in the 2012 Presidential elections.

From a logistics standpoint, Mogreet’s staff of 23, headquartered in Venice Beach, California, joins the 140-person team at payvia, located in Los Angeles, with offices in San Francisco, Boston, Seattle and Sydney and Citron becomes Chief Marketing Officer of payvia.

If nothing else, the result of the combined company adds more fuel to the engine of mobile commerce.

 Chuck Martin is Editor of the mCommerce Daily at MediaPost and writes the daily MobileShopTalk column. He is the author of “Mobile Influence,” “The Third Screen,” and “The Smartphone Handbook.” He is CEO of Mobile Future Institute. Chuck Martin is a frequent Mobile Keynote Speaker and Mobile Marketing Speaker around the world. 

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