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PayPal Mobile – buying via text

Posted by Michael Bloch in ecommerce (Friday March 24, 2006 )

PayPal, who recently surpassed 100 million user accounts globally, has announced Paypal Mobile – a service which will allow users in the USA, UK and Canada (initially) to send funds and purchase items via SMS and voice.

It’s my understanding that while there’s already content published on the PayPal site, the system won’t be fully live for a couple of weeks.

Sending funds

After activating a phone for use with PayPal Mobile, which you can do during this pre-lauch period, it appears that sending funds will be a very simple task.

A user will enter a text message such as “send 10 to 12345678” (meaning send $10 to the owner of that number) or “s 5 t” , then transmit that message to 729725, which is “Paypal” on a handset keypad. PayPal will then call that user back, requesting their PIN to confirm the transaction and once that is done the recipient will be notified by phone or email.

For anyone wanting to give it a go, here’s an exercise for you:

s 1000 t


When first reading about this, I thought great, I’m the world’s slowest SMS’er so it’s not for me. But wait, there’s more :). If you’re handset keypad challenged, you can also just use a voice system that PayPal will be offering.

Purchasing items – Text to Buy

Items that can be purchased via merchant sites using this system will have the words “Text to Buy” next to them. The shopper then texts the item code to the number provided by the merchant. Paypal then calls the user back to confirm the order, the merchant is then notified of the order and the item is then shipped to the address in the users’ PayPal user account.

Paypal is also offering a handy little cheat sheet (PDF) that you can cut out and store in your wallet.

Even though I’ve been involved with cell phone services since 2001, personally I’ve never really gotten into them; to me they are more of an annoyance in my own life. My phones are always hand-me-downs from other members of the family who are more into the latest and greatest gear. Paypal Mobile is going to change my thinking somewhat…. once it’s available in Australia.

If you sell items that are geared towards a younger market, my suggestion is that you seriously consider Text to Buy as soon as it’s available. I can see that demographic taking to PayPal Mobile like a duck to water as many of those consumers are already well trained in the art of SMS and purchasing ringtones etc. via phone.

PayPal charges nothing to send money by phone, but carriers may charge fees for sending/receiving text messages. As transactions are protected by a PIN number, security is good, even if your phone is lost or stolen – unless of course you’re silly enough to store your PIN on the phone :).

The PayPal Mobile site is still a little scant on content, and I wasn’t able to locate any information for merchants about utilizing Text to Buy or the costs involved, but no doubt that will change very soon – stay tuned.

Other Paypal trivia

PayPal commenced in 1999, accumulating 12,000 accounts and $235,000 in transactions by the end of that year. During 2005, PayPal processed more than $27 billion in transactions and topped $1 billion in revenue!

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