Cash, Credit or Micropayment?

As the Beatles so wisely sang back in the ’60s, the best things in life aren’t free. Neither are the best things in wireless. Cingular Wireless (www.cingular.com) not only has given its subscribers services to sing about, but it also has provided an easy way to pay for them.

The carrier recently rolled out its micropayment solution, Cingular DirectBill, making it the first U.S. wireless carrier to offer a nationwide micropayment billing service. Using Qpass (www.qpass.com) technology, the service bills purchases made by wireless phones or from the Internet to a subscriber’s current Cingular bill. Qpass serves as a billing aggregator, authorizing purchases, collecting subscribers’ billing records and feeding them into Cingular’s billing systems.

The service is free to users and doesn’t require a credit card to pay for purchases, which instead are billed directly to a subscriber’s monthly wireless bill.

“It’s not an easy thing to pull off to get third-party transactions to appear in some intelligible way on a customer’s phone bill,” said Jennifer Labs, Cingular mobile commerce solutions product development. “The key to success here is not only great content but also easy access for customers. They won’t go back and try it again if you don’t make it easy to try in the first place.”

Going for that great content, Cingular, through Premium Wireless Services (www.pws.ws), also has launched customized ringtones. For $.99 a tune, subscribers can download ditties by everyone from the Beatles to Britney. They can visit www.mywirelesswindow.com to select and purchase their favorites via Cingular DirectBill.

To avoid sticker shock among over-eager baby boomers and parents of NSync fans, Cingular has placed a $20 monthly cap on micropayments for each user.

“As consumers begin to experience micropayments on their bills, we wanted to help them out initially because it’s really easy to go nuts buying these ringtones,” said Dahna Hull, Cingular director, m-commerce development. “We just need to wait and see how people react to see how we’ll handle the cap in the future.”

The service requires an Internet-enabled PC and an SMS-enabled handset. Customers can review and track their DirectBill purchases on their monthly wireless bills or by accessing www.mywirelesswindow.com and entering their PINs.

Before the end of the year, subscribers also will be able to purchase games, graphics and MP3s from a WAP- or SMS-enabled handset. According to Labs, Cingular is exploring plans to offer soft drinks and snacks from vending machines. In addition, toll-booth and mass-transit payments are being considered for this service. But all items offered will be true “micropayments,” or under the $10 mark.

Cingular anticipates that micropayments will light an m-commerce fire in the U.S. Hull compared them to the convenience of paying for gas at the pump.

“As far as the future of mobile commerce and specifically micropayments, we’ll see it develop into something where a few years from now we’ll wonder, ‘What did we do without it?’” she said.

Now that would be something for carriers to sing about.