PayPal Mobile Payments Official

Amid a flurry of announcements at CTIA today, PayPal officially rolled out PayPal Mobile, calling the SMS payment system the first of its kind.

Then they corrected themselves, admitting there may be some smaller companies with similar services already available.

But they don’t really matter, PayPal said. And analysts agreed.

First introduced last month, PayPal Mobile allows users to send a text to “PayPal” (729725) from their phones and enter the dollar amount they want to send to a particular vendor, charity or user ID number.

PayPal will then contact the mobile user to confirm and complete the transaction.

Forrester Research analyst Sucharita Mulpuru is enthusiastic about the service.

“Conceptually, it’s a great idea,” she told “It’s the easiest system I’ve seen. Before if you were going to pay on your cell phone, you’d have to get a lot more pieces involved.”

Dana Stalder, PayPal senior vice president of business operations, gushed at praise like that.

“Nobody has really built or offered the product that PayPal is bringing to the market today,” he told, but soon remembered that TextPayMe started offering SMS payments in December.

“I think from a basic function standpoint, there are some similarities [between the two products],” he said.

Then he presented the differences.

“The fundamental difference with PayPal comes in first and foremost with the power of the network,” he said, “[Our] 100 million accounts fundamentally change the utility of the payment system.”

It’s true that TextPayMe does not have 100 million accounts.

“It’s not near 40 million,” TextPayMe spokesperson Phillip Yuen told “We have a decent amount of users and it’s growing at a nice rate.”

Mulpuru said the disparity in subscriber numbers is enough to make PayPal different.

“PayPal has 100+ million accounts. It’s got eBay. And it’s got that name recognition,” she said.

What’s more, Mulpuru said, 100 million accounts is enough to make a mobile payments system matter.

But right now, they don’t. At least not in the United States. Here, consumers think of their mobile devices as phones alone.

But by offering PayPal Mobile for free, Mulpurua said, PayPal can change those habits.

“They are leveraging their backbone, the 100 million accounts they already have,” she said. “They are getting people used to this technology on a very small scale.”

Exactly, Stadler said.

“I think that [perception] is changing, has been changing, and will continue to change,” he said. “I think that it is great customer-oriented use cases like PayPal Mobile that are going to be the driver behind those changes.”

And that’s something even underappreciated TextPayMe can appreciate. Sometimes it takes a big player with 100 million accounts to change consumer expectations.

“They’ve done some good things,” Yuen said, acknowledging competition. “They’ve actually brought us a lot of attention through this.”

News Around the Web