C. Janine Hodge

Amazon has long been a force with which to contend in the world of online retail. Now, they are trying to step things up a notch, apparently by competing with Paypal. One of Amazon’s newest venture is the new payment service TextPayMe.

The TextPayMe FAQ description opens thusly:

The TextPayMe service is powered by Amazon Payments and allows you to send and receive money through both your mobile phone and the TextPayMe website. Once you have registered with the TextPayMe service, you can make secure payments from your mobile phone and the website to any US mobile phone or email address. There is no cost to you or the person you send the payment to when you send a payment using TextPayMe.

I recently decided to test drive the TextPayMe service, and experienced mixed results. The upsides included a relatively familiar user interface similar to Paypal’s, reasonably intuitive navigation, and the fact that funds in your account can either be transferred to your bank or to an Amazon gift certificate. The downsides are that withdrawals to your bank account must meet a $10 minimum, sending payment via cell phone requires a specific SMS code (better hope you remember it!), and there still seem to be a few technical support snafus.

Could TextPayMe become a strong competitor in the realm of online payment processing and receipt? It has a chance, given Amazon’s ubiquity and TextPayMe’s unique value of easy conversion to Amazon gift certificates. However, before that happens, a few changes will need to occur. For one, the interface is familiar, but could still use more polish. The navigation is fairly intuitive for a person who is experienced with the Internet, but may not be so easy for a person who is relatively new or limited with the Internet - this may discourage use by many older or less experienced users. Mandatory minimums for bank withdrawals may be undesirable to casual users (although the low minimum will not likely impact potential business-class users). The most important change will be improving the access to relevant technical support.

Over the long haul, internationalization will be requisite for TextPayMe to compete with the Paypal juggernaut. Another issue that may prevent them from strong competition is the current lack of bank affiliation - Paypal offers debit cards that tie into your account; TextPayMe does not. And if Paypal ever decides to offer conversions of balances to gift certificates, TextPayMe will lose its unique value proposition. So there are some fairly significant obstacles involved if TextPayMe is going to run with the big boys.

With all that said, TextPayMe appears useful and worthwhile for certain niche markets. If you are interested in the service and you reside in the U.S., you may also be interested in their promotional $5 sign-up bonus. (Please note: If you are like me and have a U.S. residence and bank account, but use a Canadian cell phone - or a U.S. one not in their list of providers - don’t expect to take advantage of the bonus.)