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.



    putting to much in 2 one semi secure device might be not such a great idea...

    Kinda makes stealing someones phone a little more enticing really...??
    Spend all their money via texts and then sell the phone...bigger profit :)

    Novel, but surely it's quicker and easier to just swipe your card and move on.

    Don't know what the point of fumbling with your phone is for something that is already as unobtrusive and convenient as it can possibly get.

    A few take aways near me have this.

    You have to register on the SMS Payment companies website, charge up the payment system with your CC, and then use an SMS to pay.

    Exactly how is this easier than just paying with eftpos or credit card? The tiniest appeal is that you usually get a small discount using this system, however these purchases are so small I couldn't care about a 5% discount.

    It feels like buying pre paid mobile credit to me.

      One thing I see is that if you're using it for a regular service -- like coffee from your fave coffee shop -- then the ability to fire off a pre-order can be a nice bonus.

      It clearly requires direct regular association between you and a provider you use often, but that's a potential benefit should adoption spread widely enough that you have that kind of relationship available.

    An Australian company might of come up with the
    An Australian company might 'have' come up with the

    The ANZ bank already has a version of this. I can SMS anyone including anyone in my phone book, any amount of money and the other person gets a SMS from the bank with the instruction he puts his bank details in and a code to receive the money. Great way to transfer money to friends


      Doesn't sound like it would be open to fraud or scams, either.

      If people actually reply with their bank account details they probably deserve to have their accounts emptied by fraudsters.

    NOOOO this is bad, phone companies will get to charge crappy excess

    This has been done for years now over in the Philippines. There's even a service called Smart Money that does a mash up of mastercard debit and SMS payments. There's also a service called GCash (owned and managed by a Filo telco called Globe) that's looks like banking done via SMS

    This is so old. New Zealand has had parking meters in place for 10 years that you can text to pay. Very handy if you dont have change.

    Dear fellow commentators,

    Hopefully the moderator will allow this post by way of a right-of-reply to some of the comments on what seems to be an interesting discussion topic.

    Points taken re above but remember we are not seeking to be all things to all people...

    One area which was not well addressed in the initial about mHITs is the application to the QSR industry (QSR = Quick Service Restaurant). Basically this means take-aways like McDonalds, Boost, Subway etc....

    For this market, texting and ordering ahead in the one simple SMS is a killer application as it allows customers to text and order ahead - beating the queues. The "walk off" phenomenon in busy peak times for QSR's is a massive problem and represents a significant revenue loss.

    This is one market where mHITs is particularly suited. See our Q-Jumper service which is specifically targeted at set-menu QSR's.

    You can't order ahead just with a credit card on its own. You need to build a whole shopping cart system around it.

    If you want to know more about our strategy, check out our recent Sky News Business interview:

    The question we all have is!

    Let me tell you!
    Why haven't we adopted the mobile payment system yet?

    I can give an example. For Mhits - QJumper the problem is, if I visited a subway and the line wasn't busy I don't want to sit there on my mobile trying to type up a txt when I could speak to the checkout chick and have already ordered.

    So overall the business model is not sufficient enough and the consumer can see that.
    Also the Australian consumer is still not ready for change BUT by the time the consumer is ready and trusted, just about everyone will have a smartphone and transactions will be adopted using android/iphone softwares therefore SMS will be out of the question and classed old hat and maybe not fit the exact banking profile.

    We are currently going through a TRUST stage with mobile devices and doing the odd social thing on them.

    No matter how much money you through at a business saying it will work if you had missed the ball and haven't got 20 million in the bank with some big backers don't even go there.

    I am in the business and I see SMS great for coupons and gift vouchers but for a mainstream payment device. maybe not.

    Some websites that have adopted the SMS gift vouchers and coupons are and and are doing quiet well in the market.

    Time will tell, Peace out fellow mobilers.

    I use the mHits service for coffee. Txt B4 I leave Home/Office. Walk in, Say g'day & pick up coffee, walk out. As Seamus pointed out, Seems to work best in frequently attended establishments where the staff know you and you know them.

    Credit cards systems don't let you order ahead. Also, like Sonys recent hack showed, not having to lodge your credit card is a important benefit. I load my mHITs account via BPAY which is plenty secure. All you nay sayers just dont want to back new ideas....

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