Back in June, I wrote a blog about mobile commerce and using your phone to pay for services, or using your phone to enable mobile banking. These are all huge growth opportunities for the industry.
I wanted to follow that up with some comments about how this works. Some of the payments will be made using the internet, that is, the mobile internet. Since a smartphone is an on-ramp to the internet, then the same mechanisms to pay via the internet can apply. This is a little cumbersome since we’ve all likely done this in airports with our laptop – we’ve had to put in our credit card numbers, etc. To make this easier there might be specific applications downloaded to the smartphone to better enable this. And there is the concept of near field communication where the phone can be waved near a reader to enable payment.
However, a substantial subset of mobile payments will be made using SMS or USSD, which involves SS7 signaling. One method of payment would be to charge your mobile phone. You can say a lot of things about mobile phone companies, but one thing they DO know how to do is to bill you. In this case, that is an advantage. You simply add the charge to your mobile bill. All of this activity would be accomplished via text messages or USSD codes that request and confirm payment. While this may not stem the tide of pending SMS doom (see last week’s blog), it expands the role of SMS.
Mobile payments. It exists today. It’s easy. It works. It’s there. Smartphone not required. Thanks to that crafty SS7 protocol suite.