Danal, another mobile payments company, launches
Danal, a company that wants to let young people use cellphones to make payments without owning a credit card, is about to launch in the U.S. with a separate subsidiary, according to the WSJ. — It lets you buy downloadable music or other digital goods …
Context & Ripple Effects
Danal is entering the United States the way the Wall Street Journal frames it: a Korean payments company little-known stateside, launching through a separate subsidiary rather than its home-market brand. The wedge is demographic — young people who want downloadable music and other digital goods but hold no credit card, so the handset stands in for the card at checkout.
Same-day pickup from both VentureBeat and the WSJ gives this launch unusually broad distribution for a company with no prior footprint in this corpus. What is being tested in June 2007 is whether phone-based billing can reach the buyers the card networks do not serve, starting with digital goods where no physical fulfillment is needed.
First-order effects
- Teens and young adults without credit cards get a working way to buy downloadable music and digital goods at launch, with Danal's U.S. subsidiary — not the Korean parent — carrying the brand.
- Merchants selling digital goods gain a checkout option aimed at exactly the demographic card issuers most often decline.
Second-order effects
- Card issuers and payment networks face a small but pointed competitor for under-18 spending they capture poorly; if phone-billed purchases scale, digital-goods merchants gain negotiating leverage over card fees.
- Whoever sits between the buyer and the merchant — the carrier or the subsidiary operating the billing rail — controls the customer relationship and takes a cut, making the U.S. operators potential gatekeepers in this market.
Third-order effects
- If the pattern holds, the phone becomes a payment credential in its own right, decoupling small-dollar digital spending from credit underwriting and shifting identity and risk checks toward the operator of the billing rail.
- A structural split could emerge between card-based wallets for banked adults and carrier-adjacent rails for minors and the unbanked — the segment boundary Danal is probing with this 2007 launch.
The trend: Mobile handsets are becoming a payment credential that reaches buyers credit underwriting excludes, positioning whoever operates the billing rail — carrier or intermediary — as a new kind of financial gatekeeper.