This is just the beginning for payment by text message

By Peter Bredgaard, CEO of Unwire

In recent years, making payments by mobile telephone - so-called mPayment – has become a reality in the Nordic countries. And whether it involves buying a train ticket or a parking ticket, initial experience shows that the public is more than keen to pay by text message.

The reason that mPayment is so popular is, first and foremost, that text messaging is such a powerful form of communication. Over time, just about everyone has acquired a mobile phone and, as a rule, most people always have it to hand, so sending a text message is quick and easy.

13 billion text messages a year
Nevertheless, the text message has always been underestimated. When the mobile phone made its first humble appearance 15 years ago, nobody dreamt that the text message would develop to become the powerful medium that it is today with an increasing number of text messages being sent every year in the Nordic countries. In Denmark alone last year, approximately 13 billion text messages were sent to friends, family and colleagues near and far!

And now, users have also started to pay by text message – and how! This has caused some text message sceptics to change their mind and reluctantly praise the medium. And indications are that mPayment will be overtaken by other technologies such as Near Field Communications, NFC, which makes it possible to pay for goods by holding a mobile phone with a special in-built chip over a payment plate.

In the meantime, text message sceptics are forgetting several of the advantages of mPayment. First and foremost, payment by text message is extremely easy. As opposed to technologies like NFC, mPayment does not require pre-registration and users do not have to start off by paying money into an account. All they need to do is compose a brief message and send a text message and they have completed their purchase. And as technological developments have proven time and time again, it is not always the most technologically advanced devices that win in the end. Rather, it is the technology that is easiest to use and consequently has most users.

Text messages can be sent from any mobile
In addition, anyone who has a mobile phone can send a text message. It does not require - as it does with NFC – acquisition of a new mobile that is able to handle the special technology or which has a special in-built chip. Taking into account the current reluctance of people in Denmark to replace their mobile phones, it would take at least five years from the time of introduction before all mobile phones will be able to handle a new technology like NFC.

In the meantime, anyone can send a text message, and a great many people are already doing so when they pay for goods. Week after week, statistics are showing that companies who offer their customers the opportunity to make purchases by text message are setting new records.

So, let’s not be too hasty about writing off text messaging just yet. Because even though other technologies will appear, text messaging will remain the most significant form of communication when it comes to paying for purchases made without cash or a credit or debit card for a number of years to come. And just wait and see – this is just the beginning for payment by text messaging!