| There's been a lot of buzz lately about mobile | | | | some type of authorization and notification |
| payments and the next killer app that will suddenly | | | | mechanism, being able to "push" messages to the |
| have Americans using their mobile phone to buy | | | | payer and/or payee is absolutely critical in building a |
| everything from their next latte to their next Lexus. | | | | secure and robust service. |
| There appears to be no doubt that we're well on this | | | | If a mobile payment solution is to utilize text |
| path to financial mobility. The cell phone has already | | | | messaging, then it should conform to the guidelines |
| evolved from a basic communication tool to a | | | | established by the Mobile Marketing Associations |
| complete lifestyle device integral to a person's | | | | (MMA) and use a commercial short code. A short |
| messaging, information, and entertainment needs. | | | | code is a special telephone number that is usually 5 or |
| Extending the mobile phone to act as a wallet and | | | | 6 digits long. They were created to be easier to |
| ultimately turning it into a payment instrument is the | | | | remember than regular phone numbers, especially |
| next logical step in this evolutionary process; | | | | when sending and receiving text messages to |
| however, how and when it gets there is still anyone's | | | | businesses. If you've ever texted a vote to |
| guess. | | | | American Idol or texted a donation to the Red |
| While there's a lot of debate about which mobile | | | | Cross, the number to which you sent that text |
| payment solution will ultimately succeed in the | | | | message was a short code. |
| marketplace, one fact is indisputable: the solution | | | | Obtaining and enabling a short code is a rigorous |
| must allow any mobile phone to participate in the | | | | process that requires strict adherence to industry |
| payment transaction. A service that allows users to | | | | best practices and individual certification by every U.S. |
| exchange funds using only a specific phone or that's | | | | Carrier. Therefore, messages sent to and received |
| restricted to a specific carrier immediately excludes | | | | from a short code provide a measure of assurance |
| itself from the vast population of users not using | | | | that you are in fact communicating with a legitimate |
| that device or mobile operator. That will disincentivize | | | | enterprise and not a fly-by-night operation. |
| business owners from accepting that particular | | | | Aside from compliance, however, the greatest |
| technology which, in turn, will ultimately hinder its | | | | benefits of using a short code are security, speed |
| mass adoption. | | | | and volume. Since by using a short code a business is |
| Currently, the U.S. has approximately 280 million | | | | essentially directly connected to the carriers, it |
| mobile phones - only 45 million of which are "smart" - | | | | greatly reduces the risk that a text message sent to |
| that operate on a number of different carriers. To | | | | one of its customers is intercepted or tampered with |
| succeed, a mobile payment solution must be able to | | | | in some way. The direct connection also increases |
| function on the majority of these devices. Since | | | | the speed that messages are delivered to both the |
| currently the only technology that's common across | | | | business and the end user, which provides a better |
| all mobile phones is text messaging (a.k.a. Short | | | | user experience for the customer. Finally, any service |
| Messaging Service or SMS), the solution must use | | | | that uses a regular 10-digit phone number for text |
| SMS on some level. There are 3 intrinsic features of | | | | messaging is going to be limited in the number of |
| SMS that make it a natural fit for a mobile payment | | | | messages it can process at any given time. A short |
| solution: | | | | code, on the other hand, allows a business to |
| | | | process potentially thousands of messages a second |
| 1. It's a native "application" that's already pre-installed | | | | which would enable them to service a large and |
| on basically every mobile phone in use today. | | | | growing customer base. |
| 2. It's a universal service, meaning that a text | | | | In summary, a short code is a necessary component |
| message sent from one phone on one carrier can be | | | | of any mobile payment solution that hopes to service |
| received on a different phone on a different carrier. | | | | the majority of the population. If a company offers a |
| 3. It's a push technology, meaning that a text | | | | mobile payment service that utilizes text messaging |
| message can be sent to a user without the user first | | | | but does not use a short code, the caveat emptor |
| contacting you. Since a payment solution requires | | | | (let the buyer beware). |