Paymo Brings Mobile Payment To Consumers Sans Credit Card

Founded in 2007, Paymo is a mobile payment system designed to allow consumers anywhere in the world to buy online and pay with their mobile phone. Tending to the online population without credit cards, Paymo is designed to give customers an alternative payment method, ultimately helping online retailers expand their customer base.

The Team:
Headquartered in San Francisco, CA, Paymo was founded in 2007. The company provides an international mobile payment network for merchants designed to simplify and streamline the e-commerce process for virtual goods, online games and applications for social networking allowing consumers to buy online and pay with their mobile phone. With 20+ years of senior management experience, CEO Paul McGuire, along with CFO/COO Margaret Mackenzie, envisioned mobile payment systems transforming the market for digital content and services. Before founding Paymo, both Paul and Margaret had senior roles at mBlox—a leading mobile transaction network.  Jon Prideaux, a former VISA executive who helped develop many of Visa’s Internet products—including the Verified by Visa program for securing Internet transactions—serves as a senior advisor to the company.

Market Relevance:
“In today’s challenging global economic environment we can’t afford to exclude 70% of consumers from participating in the online marketplace,” says McGuire. There are more than four billion mobile phones worldwide, but only one billion bank accounts. By giving anyone with a mobile phone the opportunity to buy online, Paymo hopes to dramatically increase the customer pool for online retailers. The global network that Paymo has built currently touches 50 markets with one million customers. McGuire anticipates the company will expand to 2 billion consumers later this year.


If an online merchant is set up to accept mobile payments via Paymo, the customer can simply click on a Paymo icon at checkout, and enter his or her cell phone number. A text message asking for verification of the payment is sent to the number, and after the customer replies to the message, the purchase is complete. The amount will either be deducted from the customer’s prepaid account or charged on their next phone bill. Paymo eliminates the need for log-ins and passwords, remembering credit card numbers or setting up separate accounts to facilitate online transactions that are linked to a bank account or credit card. Consumers only need a mobile phone to shop online and add purchases directly to their mobile phone bill.

Because Paymo won’t work without the user confirming the receipt of a text message, the application is more secure than traditional methods for online shopping. Paymo’s cut of each transaction is going to be about 3% to 5%. The transaction amounts are typically small, under $30, and the carriers set the limits for individual users—for example, at $100 per month.

Proof Points:
Juniper Research predicts that North American mobile payments will grow from $5.3 million in 2008 to $54.9 million by 2013, and that global mobile payments will exceed $300 billion by 2013. Infiltrating the social media scene, Paymo and social network hi5  have partnered to enable members in 24 countries to use their mobile phones to purchase the social network’s virtual currency, hi5 Coins. The U.S., Canada, France, Hong Kong, Thailand, Russia and Colombia are among the countries where Paymo will be made available to hi5 users.

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