Payments via mobile phones lack popularity

  • 2004-02-19
  • By Aleksei Gunter
TALLINN - The largest banks and retailers in Estonia have prepared a major advertisement blitz to save a once promising mobile phone-facilitated payment system from certain extinction.

Formally launched in November 2002, the system has grown to encompass over 1,000 businesses with some 1,500 sales points around the country - including cafes, bars, bus stations, taxis - yet its popularity remains dismally low. According to Hansapank and Uhispank, the two banks facilitating mobile-phone payments, monthly turnover through the system is a paltry 4,000 euros.
"Zero," said a shop assistant at the Almondi drugstore in downtown Tallinn when asked how to rate the popularity of the mobile phone payment option.
"We've had it since August 2002 - from the test period on - and so far the only person who has used it was the Uhispank employee who came to test it after installation," said the shop assistant.
"People do not use it although we have the signs in the salesroom," she added.
From its inception the service was developed for the sake of small purchases, such as for buying pastries and flowers or paying for a taxi or the tab at a pub. The daily limit, after all, was set at, and still is, 200 euros.
However, even in places with younger and more tech-savvy clientele the mobile-phone payment option does not seem to be pop.
"We've had it since last November, and during my working hours nobody has used it," said a shop assistant from CD 100 music store.
Mobile-phone payments are easy to carry out, requiring the customer and retailer to confirm the transaction by dialing several numbers and waiting for confirmation.
By contrast, the "old fashioned" card payment option is still widely advertised on TV and in the salesrooms. All Estonians seem to remember the famous hedgehog from the TV commercial holding a bankcard and saying "Pay by card!"
Banks supply stores with countertop pads bearing the same slogan, and the small orange sticker that reads "You can pay via mobile phone here" remains unnoticed.
According to the e-service division of Eesti Uhispank, this year the two banks will introduce transactions between private individuals via mobile phone, which is expected to increase the popularity of buying things via mobile. In the future, payments for communal services and other options might also become available.