Premium SMS (or PRSMS) is popular form of charging consumers for products and services. But what exactly is it and how does it work?
Let’s start with an explanation about short codes. Generally you send consumers a short code via text that they can use to participate in marketing campaigns or to pay for goods. These short codes (e.g. 12345) is specific to each country’s and also specific to that country’s mobile operators. This entails that a company has to enter into an agreement with either a mobile operator or short code aggregator in order to obtain this service.
You can attach a certain tariff (that the user has to pay) to the short code, so you can have different short codes for different products.
Premium SMS Billing is a specific type of interactive SMS service that allows consumers to pay for something they want (content, services etc.) simply by sending a message to a short code, or by replying to an incoming SMS message. To make it more effective, a business can identify a keyword befitting of their campaign that the consumer can send to the short code instead of just replying “yes”.
The money is then deducted from the consumer’s phone bill or air time.
Just like ordinary mobile billing, it’s a great way for consumers to make purchases without the hassle (and security risk) of giving away your credit card info or banking details. Businesses also benefit from this because it is easy to set up, run and can be used as an income generator. It also takes away the negative “spam” connotation that people sometimes have with bulk SMS, because if you aren’t interested, you simply don’t have to participate – no harm done.