PayPal has rolled out PayPal Mobile, a text-message-based service allowing consumers in the U.S. and Canada to make purchases via mobile phones using their PayPal accounts. PayPal account holders also can use the service to transfer money and to contribute to charities.
PayPal Mobile opens a new direct-to-consumer channel for merchants, says Kevin Dulsky, director of strategic global business strategies.
The Text-to-Buy feature of PayPal mobile allows consumers to purchase items featured in advertisements by sending a product code from the ad to PayPal via text messaging. The consumer enters the code, a one-word product description, and hits Send. PayPal then uses automated voice response to contact the customer, asking for a personal identification number to confirm the process.
“We’re giving consumer brands the ability to add into their advertisement a very simple call to action—‘if you like what we’re advertising, simply send a text message to us identifying the product and you can buy it right now,’” Dulsky says.
To participate in Text-to-Buy, retailers need to set up a PayPal Mobile account either online or through their PayPal account representative. The PayPal Mobile account is separate from a regular merchant account. Fees for mobile transactions are higher than for regular PayPal transactions, Dulsky says, but declines to give details.
Merchants initially participating in Text to Buy program are 20th Century Fox Home Entertainment, Bravo, MTV, and the NBA Store.
To use the mobile payment service, a consumer must have a PayPal account and register a phone number and PIN with PayPal.
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