

Ask HN: Why is it so expensive to accept payment via SMS in North America? - bnchrch


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bjourne
Because of exorbitant fees? :) It is just as expensive in Europe as in NA so
it's not a case of Americans getting shafted this time. You have multiple
parties that want to get a cut of the action.

First the content provider that is actually offering the customer something of
value. Then you have the payment processor that are delivering sms:es. They
need have to have separate agreements with each operator to charge their
customers so that the purched items actually shows up on the customers phone
bill. Each operator may have a different method of charging payment
processors. Some charge a higher percentage per transaction, others a higher
base fee and so on.

Then you also have lots of shady content providers, who wouldn't think twice
about gouging their customers if they can get away with it. That leads to a
pricey dispute resolution procedure because someone has to answer when the
customer disputes a sky high telephone bill and arrange for chargebacks and so
on.

But mostly it's the operators at fault. They charge payment processors a lot
for access to their customers and it is not like it is a free market. If you
want to accept sms payments from Verizon customers then you have to have an
agreement with Verizon no matter what the cost is. They know it, and they
charge what they can get away with.

