I've been using a SMS payment service called Mocapay for several months now. I'm really excited about it, so I thought I'd jot some thoughts down. The idea is old, and I feel like several implementations over the years have come and gone. However, giving it a real chance this time around, I'm now a true believer.

End-user value

The value isn't where I expected it would be. I anticipated some level of convenience to fall out of using it, however, the reality is that I always have my wallet with me, if for no other reason than to carry my ID, and therefore my debit card comes along for the ride. So, as an end user, the convenience factor isn't there. That said, there are at least a couple truly valuable aspects as a user: one, I feel like it's free money (in some ways it is, more on that later). When I go to a retail location that supports Mocapay, I feel like I'm using someone else's money because the way Mocapay works is that you pre-fill your account (with say $100), and every time you use it, it draws down on the balance. So, I pre-fill (that's obviously a financial commitment), but when I go to use the service, say at a café, that specific transaction never hits my bank account. I know, kind of a twisted way of looking at it, but, it is what it is. Two, coupons! Many Mocapay retailers have negotiated a deal with Mocapay (presumably Mocapay subsidizes to some degree; maybe not though; not sure) to offer a discount if the customer uses Mocapay. For example, walking into a Mocapay retailer often greets me with a "Pay with Mocapay and receive $1 off your purchase." Well, that's a no-brainer! You mean all I have to do is pay using the service and I get on-demand, contextually relevant, savings?! Easy.

Retailer value

The value to the retailer is tremendous (assuming consumer uptake). First off, the retailer can target in-store ads (in-store or in traditional ads; online/offline) to potential customers. If Mocapay's subsidizing these discounts, even better! Second, the retailer gets to avoid pricy per-transaction fees collected by credit card networks. Third, the retailer, presumably, can buy demographic data on their customers that either they can't get from the credit card networks, or can't afford to buy from them.

Mocapay value

This section is pure speculation. Mocapay can sell demographic data to retailers. They also have an intimate relationship, and communications channel (cell phone SMS), with both parties in a financial transaction: the customer, and the retailer. That relationship allows them to do incredible targeting. They can ping the customer when one of their frequented retailers is offering a coupon/deal. They can ping the retailer when they notice an opportunity. For example, if Mocapay notices that I spent $100 at retailerA last quarter, and that this quarter my money went to retailerB, that's an opportunity for retailerA to pitch me to come back (with a coupon/deal of course). It's this relationship, and the backend data analysis, that presents enormous opportunity for Mocapay. That binding is of incredible value.


While Mocapay could certainly go it alone, it'll eventually need enough capital to penetrate the retail market to any significant degree. Selling the model after getting it working in a handful of local markets seems prudent. If Mocapay can establish the model, prove it works (for customers and retailers), one of the big 3 credit card networks should snap it up. I'd go this route personally. Fighting those credit card behemoths has never worked; they're monopolies and can crush anyone messing with the model. Feels like trying to dethrone Coke or Pepsi in-store isle end-caps or something. That said, maybe the fight is just the thing the doctor ordered.

Existing payment infrastructure and models are literally archaic. I'd love to see a new way. Paypal conquered the online/email payment space, and it'd be great to have a new brick-and-mortar payment scheme. For the record, I've tried a dozen or so mobile Paypal implementations over the years, and I literally have never gotten a single one to work. I probably need to give them another shot, but it's been an utter waste of time thus far, and Paypal, at least so far, isn't going after the same space Mocapay is (apples to oranges).


It's been tried before, and failed.

  • Culturally, the US is becoming more and more accustomed to SMS as a communication's means. "The kids are doing it."

Retailers incur too much IT overhead.

  • This is a monster challenge. I've noticed two types of retailers: one, computerized POS systems, and two, $150 manual cash registers. The retailers with POS installed have a 95+% success rate in completing my transaction. Even if the person behind the counter hasn't heard of Mocapay (yet they support it; this happens at least 50% of the time), when they go to cash me out, generally there's a "Mocapay" button they hit and the rest flows pretty smoothly. The retailers with the additional Mocapay terminal (a traditional credit card swipe looking machine) fail the transaction 95+% of the time. Either the "system is down," connections aren't setup correctly, or the front-end employee has no idea how to run the machine. This latter point is so true, that I can walk into a Mocapay retailer and guess at whether or not the transaction will work with extreme accuracy: if POS, it'll work, if manual machine, it won't. This poses a massive challenge to Mocapay. Those POS systems/terminals are very expensive and many retailers don't/won't buy them. Setting up and training employees of manual scenarios is expensive and hard. Furthermore, not enough customers use Mocapay to get the counter people used to going through the steps. So, while training may go well, a month later when someone comes into use Mocapay, the counter person has forgotten what they need to do. Clearly, the manual scenario either needs to be dropped from Mocapay's strategy, or the setup/install/use process needs to be fleshed out better.

SMS is still young in the US

  • While culture is changing, SMS is still young and getting people to use it for transactions is a hurdle. This will go away with time, and if I have anything to do with it (I'm a prolific SMSer) I may single-handedly convert at least my friends and family.

Chicken and egg

  • Retailers and Mocapay need more users to truly realize the value.

In summary:

The Good

  • Mocapay yields discounts on products I buy/use everyday.
  • Mocapay makes me feel like I'm not spending money.

The Bad

  • Manual terminal systems effectively always fail the transaction for one reason or another.
  • Not enough retailers using it yet.
Jud Valeski

Jud Valeski

Parent, photographer, mountain biker, runner, investor, wagyu & sushi eater, and a Boulderite. Full bio here:
Boulder, CO