Obopay brings Money to Mobile Phones

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Obopay is a mobile payment service in the U.S. that allows users to receive, send and spend money instantly and effortlessly via their mobile phones, whether shopping at their favorite store, going to the movies, or dining with friends. Users can immediately access their mobile money using an Obopay prepaid MasterCard®, which can be used at any ATM or retail outlet that accepts credit cards. Users can also check their account balances, collect money owed from other mobile users, view transaction histories, and invite friends to use the service.

Obopay became the first Mobile Payments Service to be offered by a major U.S. wireless operator when Verizon Wireless announced plans to make Obopay available to Verizon Wireless customers in the near future. As with the case with most applications on Verizon Wireless, Obopay will as a downloadable BREW application.

Obopay, much like its better-known cousin PayPal is a money payment service, but is focused on mobile phones. Obopay is also available on AIM, where a user can send money and make payments from the AIM Buddy List. Obopay works with Verizon Wireless, youth focused MVNO’s Amp’d and Helio, and Cellular South. Obopay is funded by ONSET Ventures, Qualcomm, Redpoint Ventures, and Richmond Management.

The strategy to win in this business is simple – get moving fast, sign up as many wireless service providers as possible (including International), and market the service to users. The technology is straightforward and is easily copied, so that’s not the strategy. This business has a first-mover advantage because wireless service providers and users are unlikely to sign up with multiple payment providers – low entry barriers and high switching costs. Obopay must move fast to establish that advantage