SAN JOSE, Calif.-PayPal quietly launched a service allowing users to make purchases or send money to other users from a mobile phone.
The world’s largest supplier of online payment services is testing the offering, which allows users to send a text message indicating the amount of money to be sent and the recipient’s phone number. The sender then receives a call from PayPal requesting a PIN number to complete the transaction.
The company hopes to drive usage of the service with a “Text to Buy” marketing campaign hawking CDs, DVDs and other goods in print, on the Internet and through TV commercials, according to its Web site. Ads will include an item code that can be sent via text to purchase goods.
“PayPal does not charge you to send money by phone, or to receive money into a PayPal Personal account,” according to the company’s site.
The service, which is being tested, was unveiled by tech bloggers who found links describing the service on PayPal’s site. The offering includes a voice option for those who opt not to send a text message.
PayPal, which is a subsidiary of eBay Inc., boasts more than 100 million accounts.
Like other PayPal services, vendors would share revenues with the online payment company on every purchase. Retailers could ship products to an address stored in a user’s account after receiving payment.
The service may bring a compelling new twist to the concept of a “mobile wallet,” according to James L. McQuivey, a professor at Boston University and former Forrester Research executive.
The need for expensive point-of-purchase payment systems has been a major hurdle for the wireless industry, which has struggled to create a place in the retail value chain by using Near Field Communications and other short-range technologies to consummate transactions. While the service doesn’t enable contactless payments, it may give m-commerce a much-needed boost.
“PayPal’s step to enable mobile payments jump-starts mobile retail in a big way,” according to McQuivey. “And all of this is riding on the back of the retail systems we already have, meaning almost no new investment by Wal-Mart is required to make it work.”
