Thank you to Thomas and Aep538 for taking the time to comment on Robert’s post from this morning’s interview. I enjoyed reading your comments as they have provided us with unique insights into some of our potential customer’s concerns as well as your interest in the business we are building.

I should probably start by saying that the reason we are developing PocketDuo in the way that we are is that almost every other company that has tried to enter this mobile payment space in the Western world has failed because they have done one of two things:

1. Tried to get the mobile operators to add transactions on-bill (i.e. on your mobile phone bill), which the operators are hesitant to do because it exposes them to substantial credit risk (should a user default on their mobile phone bill) and increases the perceived cost of owning your phone (especially for large purchases one might make on a phone that provided this facility). It is also extremely difficult to get all the operators to agree (certainly in Europe) to implement a new technology, so this route is typically fraught with uncontrollable legal costs and frustrating lead times.
2. They have tried to make your phone another purse where you top up your cellphone/mobile purse with x amount and can then spend from that amount until you need to top-up again. If you are anything like me, you probably have far too many pockets of money already - what with mortgage, savings, bank, credit and debit accounts, and so it doesn’t make user sense to add another purse to that list.

[I should note here that with our technology (unlike with the first solution mentioned above), the mobile operator will not have knowledge of the transactions you are making and since we highly respect an individual's right to privacy, we won't share that information with anyone unless served with a court order to do so - hopefully very unlikely!]

So in short, we are trying to simplify mobile payment processing by encouraging users to demand greater online security and encouraging merchants to accept our form of payment to not only minimise their risk of financial loss due to fraudulent activity but also sell more online because PocketDuo users feel comfortable making purchases as they don’t have to give their card details to hundreds of companies they transact with online. We also believe that many people like some of their credit cards because of the incentives they offer such as air miles, cashback etc so we want to make it possible for you to make purchases with those cards and still receive the incentive - something not obviously possible with current solutions.

Our marketing dilemma is therefore more a question of how we stimulate user adoption in order to raise funding without allowing established companies to replicate our solution before we pass ‘Go’. Big companies (including the cellphone / mobile operators) rule this space with closed minds and iron fists and venture capitalists typically want to see market penetration rather than massive potential but no existing revenue.

Your idea of approaching the mobile operators Thomas is therefore a difficult one but one we certainly have on our radar. Any other ideas welcome. We are keen to explore all possibilities.