A First Look At Sapphire Mobile Systems and Phire
West Conshohocken, Pennsylvania-based Sapphire Mobile Systems has posted some information on its web site about its SMS-based mobile payment solution - called "Phire". In this article, we take a quick look at some of its features based upon the information the company has posted about this new service.
Sapphire says it is seeking to partner with financial institutions, prepaid debit card providers, processors, carriers, and MVNO's to "Phire-enable" existing accounts - claiming the ubiquity of SMS (already on essentially every mobile phone) significantly eases adoption hurdles for mobile payments. Sapphire says Phire is compatible with all U.S. wireless carriers and all mobile phones
Customers experience two kinds of transactions on the Phire network - user-initiated and automated. User-initiated actions include balance inquiries, account transfer requests and mobile payments. Automated actions include alerts and notifications, both user- and bank-defined.
User-initiated transactions involve the user sending a request to Phire - for example, to make a payment to a merchant, Phire then sending a message back (using a different SMS short code) requesting the user enter their PIN in response - a process somewhat analogous to receiving an email confirmation with a "click to confirm" link included. Sapphire doesn't detail any costs to consumers to participate in Phire - presumably Sapphire's partner institution if free to charge - or not charge - the consumer as it desires.
For merchants, the value proposition Sapphire claims is reduced payment acceptance costs for smaller ticket purchases as compared to payment cards. Phire doesn't charge merchants a transaction fee - rather it charges merchants a fee described as "as low as 0.5%" when they withdraw funds from their Phire accounts. This is basically another form of pricing aggregation to reduce per item costs to merchants.
Merchants can also earn credits for enrolling customers in Phire as well as earning money - 1% of the cash value loaded - for handling the cash loading of funds into Phire customer accounts. Merchants must have enough cash in their Phire account to cover the loading amount at the time the loading is performed via an SMS message sent from the merchant to Phire.
That's a quick look at Sapphire and its Phire network. We'll continue to watch for news and progress from this new company.
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