Note: If you are looking to send payment links by SMS to allow your customers to pay remotely by card, see our articles on payment links. The article below is about paying for goods, services or products via a text message sent from a mobile phone.
With the SMS (Short Messaging Service) payment system, purchasers send a text message to pay for an item or service. This text message is sent to mobile payment providers. The provider clears the transaction between the purchaser and the vendor.
The cost of the purchase is added to the monthly phone bill or deducted from a prepaid balance by the mobile phone operator. By using SMS payments, mobile phone users can securely, quickly and safely pay merchants, buy goods or services (real or virtual) as well as make deposits or send remittances.
Many businesses are looking at harnessing the power of SMS payments to make life easier for their customers. Using SMS payments, people can buy Coca Cola in Europe, postage stamps or books in Denmark, burgers in Finland and travel tickets in Tokyo, Paris and Rome.
Today, SMS payments are largely used by charities as a quick and easy way to get people to donate. For more information, see “Who uses SMS payments?” and “SMS payments and charities“.