SMS for Dummies

Marc Jarrett
Editor's Note: The ongoing woes facing many adult webmasters searching for stable billing mechanisms leads many to consider "alternative" billing mechanisms. For the non-US market, one of the most attractive options is Premium Rate SMS. Here's a closer look:

The fact that SMS (Short Message Service) was almost added as an afterthought when the GSM cell phone standard was first conceived, makes the phenomenal popularity it enjoys all the more remarkable, with more than a staggering 20 billion SMS being sent each month – and it's still growing...

GSM (Global Standard for Mobile communications) is the standard used by 80% by the world's cell phone users, however, it was not adopted by the USA, resulting in the following situation. Europe: Many different countries, one standard. USA: One country, several standards. This is why SMS, otherwise known as text messaging, never took off in the States.

In the early days, the GSM cell phone operators even had a "gentleman's agreement" to terminate each other's SMS at no charge. Hence the abundance back then of free web-based SMS Services. Now data traffic accounts for an increasing proportion of the network operator's revenues.

SMS' popularity can be attributed to the fact that it's direct and immediate. No waiting for hours while you wait for someone to return your voice message. Furthermore, it's discreet - unlike loudly talking into your handset in public. It's also generally cheaper than a long phone call.

The 'product' itself is spectacularly unspectacular. Only up to 160 characters of text. Unless, that is, it is used to carry small amounts of data – hence the popularity of the hugely successful ring tone and logo "cell phone tuning" market.

Part of this can be attributed to the ease of purchase. The customers pays via their phone bill (i.e. on credit), and product delivery is immediate. A neat billing/delivery cycle – all with no charge backs!

The good news is, you can now capitalize on SMS' popularity by using it as a billing mechanism for surfers to gain access to your website(s). This way, the cheap tour takers who never converted before will actually become paying customers, and they will love you for it – no more messy credit card details (if they have one) – and, above all, their anonymity is maintained.

This way you could offer, for example, 24 hours of access to your member's area for €4 – a good solid currency nowadays! If they like what they see, they can sign up with your current credit card processors in the normal way.

This is achieved via the Premium SMS (PSMS) billing mechanism. This can be compared to a 1-900 number.

To use PSMS, the end-user 'texts' his or her order reference number to a five digit short code, which is charged at a premium. They immediately receive an SMS back containing the new reference number needed to 'unlock' your members area. You remain in full control, and dictate both the price points and the length of access that the customer will receive.

Unfortunately, PSMS is not yet a viable billing option in the USA, but is supported in most other developed markets.