Product or Feature?

I first heard about Obopay 1.5 years ago while doing research for a project on mobile applications. Now I have been re-introduced to the company by way of a Kevin Bacon six-degreesines.

Basically, Obopay is trying to get people to send money to each other via their phones. This kind of thing is common in places like South Korea, India and Europe, where they are not encumbered by things like legacy incompatible cellular systems. These conflicting systems have been a large part of keeping products like this away from the US until now. Companies like Obopay are making up for the lack of phone company support by creating their own systems.

Obopay creates an account for you that is linked to your checking account. You add money to your Obopay account and can send that money to anyone you know that can receive text messages. Or, you can get a MasterCard that is linked to your Obopay account to spend your money.

The downside is that other people have to be on the Obopay network to get the full benefits of sending/receiving this money. You have to wait until the number of users gets large enough that most of your friends have an account and use it. At this point, I think that Obopay needs to work hard to get small businesses on board. Imagine if you could pay your restaurant bill by sending a text message instead of waiting for a bill and then credit card slip. Obopay touts the easy with which your friends can send you money for dinner, but the real hassle is waiting for the waitress when you are ready to go.


If a restaurant had an Obopay logo on their menu and indicated that the bill could be paid with a simple text message, that would be the real killer app. Users are relieved of the need to wait around after they are done eating, and restaurants avoid paying the transaction fees that come with traditional credit card transactions. Plus, it's an advertisement for Obopay for every customer at every participating restaurant. Creating these partnerships will allow Obopay to get into the mainstream and gain acceptance.

The real question here is whether Obopay has what it takes to be a standalone product, or whether it is a feature of a larger, established product. Well, it's both. It must first create the trust with users and merchants, then it will be appealing enough for a large company to buy it out and make it a feature. If it's lucky, it will get PayPal and Google into a bidding war over it. This product is an obvious extension for PayPal, and Google could use it to continue to trumpet its Google Checkout, which hasn't really caught on.