Another free idea provided to the wireless carrier community in the hopes that one will pick up and provide the service.

In a number of engagements with wireless carriers, the marketing and product development refrain has been how to create products that differentiate the carrier, leading to higher subscriber retention and ARPU metrics.  Today, I’ll offer up a "what", and if carriers want help with the "how" they can email or call me.

The example that always gets trotted out, is the success that Nextel experienced with the Push-to-Talk product development.  At one time, Nextel’s ARPUs were significantly higher than average, largely due to that one development.  Churn was low as well, since the service created differentiation that discouraged changing carriers.

Today, we see ATT Wireless driving a similar (albeit less sustainable) advantage with their exclusive offering of the iPhone.  While one would see this as an extension product (extending current capabilities rather than a sea change), there is no question that selling more than 3 million of the devices in six months drove significant increases in subscriber uptake.  For now, the only network that can provide service for the iPhone will see increased ARPU and reduced churn for those subscribers.

So a good product suggestion would ideally:

1. Bring significant new revenue to the firm
2. Be implemented with moderate investment
3. Create a differentiator to drive ARPU and client retention

Situation:

Everyone who works in an office environment has had occasions to go out to lunch with coworkers.  One of the recurring issues is making sure that the bill is divided up properly and seeing that everyone pays the correct amount.  This is often driven by some paying with credit, some paying with higher denomination currency, and never having the right amount of cash to even things out.  While the group can wait for the restaurant to make change, often that doesn’t happen due to time constraints.

What if a wireless carrier offered a service that made every handset account capable of receiving and dispensing payments?  This is more than the current approach which embeds an interaction capability with merchants (i.e. using phones to purchase from vending machines or at payment terminals).

That way, Ann could pay the bill to the restaurant however she wants and all of the others could pay Ann by transmitting their exact payment directly to Ann’s handset account.  Ann’s account would be immediately credited and she could spend the money elsewhere or use it to pay her wireless bill.

Another version of this is the informal economy (think swap meets and garage sales), which are currently cash-only and represent an extremely large untapped potential for transaction credits.  By having a handset account which supports this capability, the selling users could bypass the need for an expensive merchant account.

Another potential use is direct service sector, think lawn care, selling girl scout cookies, boy scout mulch sales, etc.  Operations that are not regular enough for a standard merchant account, but significantly improved by having this service capability.

How do the carriers make money?

• Charging a nominal monthly fee for the service, and/or
• Charging a small transaction fee
• Less payment risk for account due to credit line setup
• Reduced churn, as credit lines are "sticky" and pose greater exit barriers

The mechanics of "how" are relatively simple to achieve, with the existing data capabilities of most carriers, and a number of strategic relationships could be developed to further ease implementation and operations (think existing financial services firms).

While it would be great to personally help a carrier put this together, I’d be happy if I could just get a wireless device with that capability.