Although Conrad Sheehan thinks he has come up with a way to provide the mobility factor in the formula for ecommerce success, he's an unlikely dot-com entrepreneur at age 41. Neither a programmer nor a propeller-head, he is soft spoken and chooses words carefully. He and his wife have four children, and the oldest is seven. So why would he leave a position as senior vice-president with a decidedly traditional financial institution to start up a mobile-payment service called Mpayy?

"I had spent many years working in transaction processing and payments in particular," he explains from the Mpayy's company headquarters in Chicago. "At J.P. Morgan I ran the consumer payments business. The principal drive for growth was electronic payments in online commerce. The payment model there was credit card retrofitted: consumers used credit cards to pay, but without the card being physically present. I knew there must be a better way."

One obvious problem with the online credit card payment system is security. Paying with a credit card only requires single-factor authorization. Most merchants don't check the address the buyer gives against the account holder's address. And some don't even ask for the CVV number on the back of the card. Neither of these really tackles the fraud issue. Another problem is the convenience factor: it's difficult to type account numbers, expiration dates, names, and addresses on the keyboard of a tiny phone or other handheld electronic device.

In contrast, Mpayy's system is intended to be much more streamlined. Even more important, Sheehan worked with U.S. Bancorp (one of Mpayy's founding investors) to build a secure and highly managed system. Customer data is protected with triple-DES encryption, among other things.

"We want to offer people a choice outside of their credit card," says Sheehan. "Right now 85 to 90 percent of all transactions on the Net use credit cards. That's not real choice, and there is a lot of credit card debt out there." As word spreads, more people are choosing Mpayy. Since going out of beta earlier this summer, Mpayy has grown to nearly 2000 members.

One reason might be that many people are already familiar with PayPal, which Mpayy resembles in some ways. But Sheehan says Mpayy is less expensive and easier than PayPal; accounts can be set up instantly and offer 100 free person-to-person payments per month, for instance.

Free is always good, and there's no charge to either buyers or sellers to set up an Mpayy account. To complete a transaction, both parties need to have accounts with Mpayy. You supply data to identify yourself and the account you want to debit, such as a checking account or credit card. ("We do robust ID verification to reduce the level of anonymity," said Sheehan.)

Once you have registered, you sign in to Mpayy's system with a user ID (cell phone number or nickname) and password you created earlier. You then transfer money to a recipient based on his or her cell phone number or nickname. For buyers, two kinds of accounts are available: one is linked to a checking account and the other (designed for teens) is not.

The money goes into their Mpayy account, which is held at U.S. Bank. They can move their balances out to a linked checking account at any time for free from www.mpayy.com or https://mobile.mpayy.com.

Sheehan said the service is a real deal for buyers: there's no cost for using the system, and they receive 1 percent cash back on purchases over $50. Sellers who open a small-business account are charged per-transaction fees of 2 percent of the sale price, plus a $.20 flat fee. Online retailers and charities are priced below that.

Mpayy already works with online auction payments, and in mid-September it will launch as a payment service on the iOffer.com marketplace.

Mpayy is perfect if you're buying an item on the popular online classified service Craigslist, Sheehan said. "We barely turned the lights on in the first quarter of 2008, and someone was using Mpayy to process a Craigslist payment." Although Mpayy just went out of beta phase in July 2008, it recently became the first payment system authorized for payments on MySpace.

Asked for examples of how Mpayy works, Sheehan said, "I can pay for something I buy at a concert, book fair, or flea market no matter where I am as long as I have my phone."

Sheehan expects the list of clients both online and off-line to grow dramatically. Already sites like LawbooksforLess.com offer Mpayy for payments, and the Alliance for Lupus Research (lupusresearch.org) uses Mpayy to solicit mobile and social network donations on Facebook and MySpace.

"Shopping will always be hard on the small screen. But we see more digital content like music, movies, games, and tickets being sold online," he comments. "Purchases can happen instantly over the phone or Web. Download a song, enter your cell number and your password, and you're done."

Other entrepreneurs have tried and failed to set up online payment systems. It is possible that Conrad Sheehan has been successful precisely because he has never thought of himself as being an entrepreneur. "It's been an enormously challenging undertaking. I wouldn't go so far as to say that it has been risky. But maybe it is a bit unorthodox," he says.