Why Premium SMS?

Perfect for micro transactions, super safe, and 100% cellphone coverage

There's no doubt that credit cards and digital wallets are today the primary method of collecting payments for digital transactions. However, a growing amount of people (young audiences and underbanked in emerging markets) do not have access to these payment methods. This means users want and digital merchants need to implement alternative payment methods, including Premium SMS.

What are the main differences between card-based payments, 3rd party digital wallets and Premium SMS that should make it relevant for you and your customers?

There are more mobile connections today than the world populations.

Cellphone penetration globally is increasing from time to time. In the emerging market (such as Indonesia), data shows that active cellphone numbers are 1.5x more than country population it self! Yes, 1.5x more.
How about credit cards and digital wallets? Credit cards only available on only 5% of population in Indonesia (with active transactions are much less), while digital wallets are still fighting each other, trying to grap as much users as possible.

No internet, no problem!

Technically, when you need to purchase digital content oe services using credit cards and digital wallets, it depends 100% on the availability of internet connection.
Internet is part of data package that some mobile users need to buy separately. More over, internet coverage play a mojor role to be an obstacles of internet based payment service.

This creates a huge gap between users who are able to access digital content from their mobile devices, but are unable to pay for it. Premium SMS resolves the problem by making online payments available to any phone owner, both prepaid and postpaid, without the necessity for internet connections.
Premium SMS running on the legacy 2G, service penetration could reach almost 99.9% compare to newest generation connections (3G/4G).
Users don't have to download any apps to be able to send and receive SMS!.

Every Premium SMS purchase requires physical access to the device which means identity theft is significantly more difficult.

Even today, most digital transactions which use 2-ways authentication still use SMS to send OTPs.

In the United States, 6.5% credit card owners fall victim to identity theft each year. In these cases, consumers can dispute payments and demand their money back. This is a risk for the merchant as it puts them at risk of having their account closed.

Chargebacks can also be costly as the fees for each chargeback can be above 20%. There is also a chance that after identity theft users request chargebacks even for purchases which were made prior to the identity theft, resulting loss in revenues for services that were purchased legitimately.

Premium SMS requires users to physically confirm the payment on their device and simply having their phone number is not sufficient to commit fraud. As a result, fraud rates with carrier billing are much lower than with bank-based payments.

Prefect for micro transactions, and activitity-based monetisation

Imagine as a digital platform, you have a very cheap - only 500 IDR - digital content, or in order get some feature in your digital platform, users have to pay as low a 500.- IDR.
There are no other payment method that can provide easiness user's experience accept Premium SMS.
Other examples of activity based monetisation are:

• 2-ways authentification when user first install your apps. You can get 1000 IDR for each OTP SMS. (Usualy, merchant have to buy Bulk SMS to send OTP SMS).
• User have to pay 2000 IDR each time they want to upload a content (such as video)
• As a social-media platform, you provide a way for your content creator to monetise each of their content. User's could set 500 IDR for other user's to be able to see the content.
• Create online SMS polling, you will get 1000 IDR each time user's for each SMS sent.

People are more responsible in paying (or topup) their phone bills than their credit cards, even their digital wallets

Bad debt means that a customer purchases something with a credit card or carrier billing and does not pay the money owed. Depending on the month in 60% to 70% of the markets where SMSMOO operates, bad debt does not occur at all. In countries where it does happen, the bad debt rate is usually below 1% of the total transaction volume.

In case of prepaid SIM card users, money is loaded to the mobile account in advance, which means bad debt can not happen (think of it as a prepaid gift card, only available to everyone).

There are no hidden costs with Premium SMS

SMSMOO works with a transparent flat revenue logic: out of each transaction, the mobile operator pays a certain amount to us. We take our fee for providing you with the platform, mobile operator integrations, operational support and fraud management, pay the taxes on your behalf and pay your share out to you. We do not need to hide costs because we do not have hidden costs: chargeback fees etc. are not relevant with Premium SMS.

If you have any further questions about Premium SMS billing, do not hesitate to reach out to us at cs@smsmoo.com.