Mobile commerce is expected to reach $31 billion by the end of 2016 and grow at a rate of 40 percent each year for the next five years, according to a report published by Forrester Research.
Coca-Cola, for example, is currently testing the use of vending machines that accept payments via mobile device with SMS, eliminating the need to carry coins to make a purchase.
With these machines, consumers can simply walk up and text in to buy a beverage. Consumers do not have to register or download an application to use this form of payment, and the cost of the beverage is charged to the consumer’s mobile phone bill. The brand also benefits by using the SMS data to send special post-purchase offers to consumers, and therefore drive additional purchases.
Doug Busk, head of mobile brand strategy for global connections at Coca-Cola Co., said: “What we’re seeing in a couple of use cases is that this increases purchasing frequency … Any time you take friction out of the system, you increase frequency.”
Payment by SMS text is also now accepted and widely used by major nonprofit organizations.
Many charitable organizations, including the American Red Cross, Feed the Children, St. Jude Children’s Research Hospital and United Way have started to integrate text-to-give tactics as part of their fundraising campaigns. By texting a specific number or phrase to a short code, consumers are able to donate funds. The micro-donation is simply added to the donor’s phone bill.
