BOKU.com – NO Plastic – Mobile based online payment system!

BOKU.com, mobile payments made easy, NO Plastic Needed.

Today morning I was munching my breakfast after a solid gym routine and while scanning through my feeds, chanced upon an article on Watblog by Maneesh about mobile payments system by a company called BOKU.com where you DON’T need any credit card, debit card, bank account etc to make a payment.

I just jumped in the air and got glued to this post and quickly pounced to check out this site BOKU.com. And YES, they are offering direct payments through mobile phones without any card plastic / bank account.

If BOKU.com continues to expand their partnerships with more and more service providers like, there is nothing which stops BOKU to become the World’s most trusted and easiest online payment system.

BOKU.com is funded by Benchmark Capital, Index Ventures, Khosla Ventures. VC’s investments includes high-profile start-ups like Infinera, MySQL, OpenTable, PureDigital, Second Life, Tellme, Twitter, Yelp, and Zillow, and franchise companies such as eBay, Juniper Networks and Red Hat.

BOKU.com’s strong management team comes from web, payment and mobile companies like Amazon, AT&T, Apple, Bank of America, GE, Google, mBlox and Paypal.

They claim to have a strong fraud management systems from their strong experience in managing risk in top notch companies like Amazon, PayPal, Google, Bank of America, and FirstUSA and they claim that Mobile phone is a different story as its used by only you… lets hope that’s the case.

This is how the payments work in BOKU.com, citing an example via @watblog a payment test they did in Facebook on Texas Holdem Poker application.

boku

This can be the NEXT big thing to fuel online business growth with over couple of billion handsets across the world. The 3 step easy process just makes it so lucrative for customers to go ahead and make a quick payment.

Paying with BOKU is as easy as 1-2-3

As a publisher we are up-beat about this service and I personally am very optimiztic that this system will completely revolutionize the online payments in the coming time.

If this is increasingly adopted by more telecom providers, this will basically revolutionize the online payment systems in India as well as worldwide. I had written about one application of such system (to book local train tickets through mobile) on my blog last year. This is super exciting news for many online businesses. However, what would be interesting to note is, how telecom providers cope with managing the Post-Paid customers with bills and recoveries and charge-backs.

Anyways, this is Fantastic, I being in a online games company where we handle daily online payments… this will help us boost our conversions significantly. I think all online publishers will welcome this as a booster for their sales.

Looking forward to a close collaboration with BOKU.com.

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2 thoughts on “BOKU.com – NO Plastic – Mobile based online payment system!

  1. The rosy picture painted above doesn’t seem to be that rosy. Read my comments below based on more deeper analysis and number crunching.

    Prepaid Customer Handling: “prepaid talktime into currency usage” seems to be not allowed by regulatory policies. If that’s the case, then it’s a big issue. As if I understand it correctly, then majority of Airtel subscriptions is prepaid, so the point of reach is minimized.

    Postpaid customers – If postpaid users are going to be charged in their bills then recovery and fraud management will become an issue.

    Broadly there are some more important issues to think of:

    1) Customer’s Perspective: In the bill amount the user has to pay ~10% service charge. Which means that if they spent Rs. 100 they actually have spent Rs. 110 which they will realize in their 1st bill.

    Merchant’s Perspective

    1) Airtel + BOKU is charging some ridiculous amount of 25% – 45% fee to allow such transactions. If we go by industry standards, online payment gateways accepting credit card/debit card/Paymate(mobile), ITZ Cash cards etc… all these guys charge not more than 10%. Which means in the case of BOKU, the merchants will have to compensate nearly 25% to 45% of the cost of payment made by users. Which is ridiculous.

    2) Merchant’s Perspective: If BOKU says that these numbers add up and it’s volume game and more conversions will help in driving revenues and break-evens then it means that by adding BOKU your conversions need to go up by atleast 10%(this number varies for various industries) till you break even.

    3) After careful consideration and number crunching it looks like your existing customers who are already using credit or debit cards to make online payments should actually NOT move to this Mobile payment option as in the earlier case the merchant is compensating for 10% of the fee, however, with BOKU the compensation increases steeply.

    BOKU Vs Merchant VS Telecom Provider
    1) Credit period and liquidity – Telecom providers are asking for a credit period of 90 days before they release payments. Which means the merchant’s liquidity will get hit. They are willing to reduce it over a period of time to 30 days or 60 days. However, this is ridiculously high as compared to almost 24 hours time frame provided by Online payment gateways.

    2) Money recovery from customers – Recovering money from post paid users for wrong charges on their bills might become an issue as they will have to handle fraud complaints and resolutions.

    What BOKU can be helpful in is… converting new users. Making payments for the 1st time when the user is not sure about using their credit cards.

    Unless Telecom carrier’s and BOKU’s combined cost doesn’t come down to something similar to other online payment gateways, this looks like a flashy new system to me which will take it’s own sweet n slow route to become what they want to become.

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