Mobile payment: with chip or by sms

Pay by mobile chipEarlier this month, European mobile operators (represented by the GSM Association) and European banks (represented by the European Payments Council) have reached an agreement to collaborate on mobile payments.  Together they want to look for an easy way to link a mobile phone to a bank account. 

Mobile payments would be made possible with Near Field Communication (NFC) technology, which means the mobile phone has an integrated NFC-chip which can be scanned to make a payment.
The collaboration is an effort to create a standard for mobile payments, which now knows many different technologies and services.  But first banks and operators have to come to an agreement on the financing of NFC-networks.  Second obstacle is that all consumers need a mobile phone with the NFC-chip.

Personally, I don’t think a hardware solution should be used for mobile payments.  Of all current mobile payment solutions, SMS payment still seems the easiest and most effective one.  Mostly because sending SMS messages is so easy, common and popular.  Everyone can do it and everyone does.

So I’d rather encourage initiatives like the one of Rabobank, who introduced their service RaboSmsBetalen.nl

With this service, everyone can open a mobile wallet which can be credited with a certain amount of money.  To make a SMS payment, you just send a SMS to the shortcode 6689, including the mobile phone number of the recipient, the amount you wish to transfer and a description.  The recipient can use the transferred money to create his own mobile wallet or he can transfer it to his own bank account (though a fee is asked here).

The recipient can be a web shop but also an other individual.  And Rabobank especially wants to target the latter.  A practical exemple are friends in a bar: one of them pays the bill and instead of having to count their coins, the others can pay him back by SMS.  This way, the need to have enough cash in your pocket disappears.  So maybe we can finally get rid of those annoying bronze eurocents…

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