Premium SMS billing while being very simple and quite widespread service today is still not a preferred payment option chosen by consumers who continue rely mainly on plastic cards, banking accounts and payment systems when they initiate any transactions online. Ecommerce Journal decided to compare the advantages and disadvantages of SMS billing versus those of payment systems or e-currency services.

In fact premium SMS billing is a very convenient method to make remote payments as long as it does not imply any sophisticated procedures for buyers and it is very attractive for sellers because the penetration of mobile phones is very high if compared to the accounts opened with banks and payment systems.

While Western countries are well aware and familiar with premium SMS billing services the sector is led by Asian countries where the level of SMS billing penetration is the highest in the world.

Among the most recommended premium SMS billing services there are such providers as GoLive!Mobile, Easy Bill Online, mBlox and SMSCoin.

So, here we present you a comparative analysis of the features where SMS billing is better or worse than payment systems.

Registration

While using primary SMS billing services you don not need to fill in and submit any registration forms almost all payment systems require to create a special account from where you will be further conducting your transactions. Creating accounts with payment systems may be boring and work-some as long as some of such services require identity verification when a user is required to send photocopies of relevant documents. Moreover, the necessity to provide your personal information which might be compromised is a certain disadvantage of e-currency services and payment systems.

Accessibility

In light of high penetration of mobile communications all over the world SMS billing has a high level of accessibility for consumers from every social group because the number of people having cell phones is much greater than the number of people having a credit card or an account with some payment system across the globe.

Coverage of services

As long as short numbers where users send SMS to make payments for the certain content they purchase accept only limited amounts up to $10 premium SMS billing is convenient only for sellers of content such as ringtones, documents, pictures, short video trailers, animations as well as cards and small gifts at social networking sites. Meantime payment systems like PayPal have a far wider coverage as they allow customers to purchase almost anything on the Internet. Even the same media content in some cases is better to buy through a payment system than via SMS billing service. It is more convenient to pay for a subscription with PayPal and download heaps of favored music tracks than type a message on your mobile phone each time you need to download a song.

Cost-effectiveness

Well, premium SMS billing though used for small transactions may turn rather expensive as long as actual price of the item you download is much cheaper than the fee charged to your mobile bill. This is explained by the fee mobile operators take for allowing social networks and content providers to sell their services. Sometimes the commission charged by the wireless operator may reach as much as 60%. Besides, it is a user who also pays a VAT for the item purchased. If for example you buy a file that costs $1 and the VAT in this country stands for 20% you will be charged $1.20. Again it more cost effective to purchase a monthly subscription and pay a one time fee through a payment system than being charged for each music file.

Security risk

Inasmuch as you don not use your credit card or special identification tools to initiate a transaction when you use premium SMS billing service the risk of data breach or money loses is low or almost absent. As for payment systems even despite the latest information security technologies hackers manage to compromise accounts and steal personal information along with credit card data. And existence of such sings as PCI DSS compliant and SSL secured does not necessarily mean that the payment service you use will never be hacked and you will never be among those whose account was hit by criminals.

Conclusion

Actually we cannot say that premium SMS billing services are better or worse than payment systems or e-currency services. There cannot be any assertion that SMS billing or a payment system is more useful. Each of the methods plays its important role in its own niche. SMS billing service is mainly for those people who have little or no access to Internet connection and the most optimum way for them to pay for the download of a picture or a ringtone to their mobile phone is to send an SMS to the short number. Besides, it is very convenient to pay via SMS for sending a card to your friend through the Internet if you have no account with a payment system and you do not need any as it is not very often you make any transactions online. Moreover, though payment systems allow you to pay for monthly subscriptions or downloads of batches of files in fact there are many people who do not want heaps of pictures or music files and they need just this or that file only in a single exemplar. Actually Internet users can combine both methods and use them according to the situation and their current needs and circumstances.