Paying Via SMS? Is It Time To Ditch Paypal?


An Australian company might have come up with the next big idea in paying for things: with SMS. Okay, I’m kidding – the idea isn’t necessarily new per se, but getting people to used to this kind of payment service in Australia could prove quite the challenge.

It’s an interesting idea: pay with your phone using SMS, instead of needing to download an app and paying via your credit card. And the more merchants who choose to offer it (and thus register the number into their database as a customer), the easier it would get I presume. It’s also probably best suited to ‘micro-purchases’, those which are under $3.00 and usually too small for most people to care about paying with via credit.

From what I can tell, the company, known as mHits, works kind of like an alternative version of Paypal, but instead utilises SMS as the payment gateway and thereby makes it easier to purchase items like food in advance before you pick them up.

All purchase commands are done in the phone, while funds can be topped up online or by SMS. To be honest, it all seems very 1990’s, when the appeal of messaging technology was still quite new at the time. And they’re not the only ones pursuing the idea out there either: in 2006, Google filed an SMS patent for a similar technology called “GPay”. Check out the images below to see how that patent was supposed to work:

Another competitor, Dao Pay is already in 200 countries, so it remains to be seen how big the market gets before it can expand and afford to handle more competitors.

For now, the mHits service (which unfortunately sounds like a pool knockoff of a video hits TV show) has only has one shop offering the payment system in Sydney and a small handful of coffeshops in the Canberra region. Like most of these alternative payment systems – the key is having enough people use it to be most effective. Given the choice between credit, cash and SMS, would you prefer to pay with the latter? Let us know below.


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