SMS key to European payments success

Europe is now ripe for SMS-based mobile payments to take off, after a trial in Sweden proved consumers are willing to pay for goods from their phones, Ericsson IPX claims.

The payment and messaging equipment provider says the trial on seven vending machines in two Stockholm underground stations resulted in a 20% increase in sales at those machines, while also boosting carrier’s ARPU through increased SMS traffic.
 
It is now preparing to launch commercial services in Sweden, and is set to begin fresh trials in Oslo, Norway, by end March.
 
Donya Ekstrand, head of marketing and communications at Ericsson IPX, says the Swedish trial was successful because consumers are familiar with how SMS works, and using that technology provides a clear revenue stream for carriers.
 
“MNO’s are beginning to have an inkling [about] how they can monetize [mobile payments],” Ekstrand told telecomseurope.net. “The market is more ready now.”
 
Although Ericsson hails the trials as a success, partner firm Mobivending was unwilling to discuss how many people had used the service in Stockholm.
 
CEO Katarina Lowenberg explained it was up to the carriers to discuss usage, but said that individuals spent around 50% more when paying for goods via SMS because it was more convenient than fishing around their pockets for change.
 
“There was an overall sales increase in volume and individual transactions,” she said.
 
The service uses short-codes on the vending machines to initiate a transaction. Users enter the code, the product, and amount they want to spend, and receive an SMS confirming the purchase.
 
Ekstrand says that return SMS can be customised by the vending machine owner, and so could be used for advertising.
 
“We’re constantly looking for new ways to help [carriers] monetize their product,” she said, adding that operators are already working out new business models for SMS payments.
 
Although the firm is focussed on the Norwegian trial in the near-term, Ekstrand says the aim is to deploy the service globally in the long run.
 

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