The firm behind BT's new online micro-payment system charges its German merchant partners as much as 40 per cent commission, vnunet.com can reveal.
BT has licensed German micro-payment provider Firstgate's click&buy system to enable surfers to charge minor online purchases, such as an MP3 download, to their BT phone bill.
"[It] gives the customer the equivalent of shopping with loose change," said Angus Porter, managing director of BT Retail's consumer division.
But merchants opting to partner with BT may be faced with hefty bills from the telco if it adopts Firstgate's rate-card.
It charges German partners €25 to register, €5 per month plus as much as 40 per cent commission on sales, although for revenues over €5,000 per month it promises to negotiate.
In comparison, Vodafone's M-Pay charges 15 per cent commission, while the i-Mode system popular in Japan charges just nine per cent.
Martha Bennett, vice president of European research at analyst Giga Information Group, told vnunet.com: "Firstgate's system is reasonably easy and straightforward and is well accepted in Germany among pure online payment mechanisms.
"But it doesn't have the mobile element of Vodafone's M-Pay, which can also be used on the fixed line internet."
BT Retail will provide an itemised account of all orders, much the same as a bank statement. German customers pay a monthly bill from their bank account but BT wants UK customers to provide credit or debit card details to set up accounts.
The company promised that it will integrate the technology into its own billing system, allowing customers to charge purchases to their phone bill. But it has not said when.
"Vodafone admitted that the biggest headache they had was integrating it with their billing systems and, until BT has actually done that, I'd be somewhat sceptical about the timeline of when it will be ready," said Bennett.
Graham Fisher, senior analyst at Bloor Research, added that charging to a phone bill was "a bit more personal choice that BT can offer", but that he could not see it "being a major swing one way or another" for consumers considering which micro-payment tool to sign up for.
BT will not discuss its commission plans, with Porter stressing that an efficient micro-payment system will boost broadband content providers.
"We believe there is a huge amount of content that doesn't exist today because there is no way to charge for it," he said.
Porter also dismissed current micro-payment systems as unsuitable. E-wallets "won't ever take off", reverse SMS billing is "OK for mobiles but doesn't allow you to keep a good enough track of what you're spending" and premium drop dialling "doesn't work with broadband", he said.
Bennett agreed that e-wallets were "too complicated" and that reverse SMS "wasn't transparent". But she emphasised that Vodafone's M-Pay offered greater flexibility.
"We are already getting far too many of these things," she explained. "Customers are hesitant about which system to sign up with, and are waiting to see which ones merchants choose to support, and vice versa."
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