March 23, 2006, 12:00 AM

PayPal tests mobile payment service using text messaging

Online payment provider PayPal is in the final stages of testing a service that will enable consumers to make purchases or transfer money via text messaging on a mobile phone.

 

Online payment provider PayPal is in the final stages of testing a service that will enable consumers to make purchases or transfer money via text messaging on a mobile phone. PayPal expects to roll out PayPal Mobile initially in the U.S., the United Kingdom and Canada within the next few weeks, the company says.

Using the Text-to-Buy feature of the mobile service, a customer could purchase an item featured in an advertisement by sending a product code from the ad to PayPal via text messaging. The consumer would enter the code, a one-word product description, and hit Send. PayPal then uses automated voice response to contact the customer, asking for a personal identification number to confirm the purchase.

“It’s a two-step process,” a spokeswoman says. “Text and confirm with a PIN.”

PayPal then notifies the merchant of the payment and the item is delivered to the shipping address on the customer’s PayPal account.

“This gives merchants a whole new channel to reach out to customers and it also gives them a direct response,” the spokeswoman says. “If you are texting in for something you saw in an ad, the merchant knows directly how effective that ad was.”

The PayPal Mobile service also can be used to send money to individuals as well as for contributions to charitable organizations, she says.

To use the mobile payment service, a consumer must have a PayPal account and register a phone number and PIN.

PayPal, an eBay subsidiary, has more than 100 million accounts in 55 markets worldwide.

 

 

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