What are the ins and outs of a short code (sms) texting system with billing
February 7, 2011 3:11 PM   Subscribe

TelcoFilter: What are the ins and outs of a short code (sms) texting system with billing?

If I wanted to start a service that required short code signup (ie text SIGNUP to 23234) and bill the user's cell provider once they confirmed they wanted the service:

1. What cut do telcos take of a $5 signup (not recurring)? I have heard it as much as 40%---
2. When is the user charged (I am assuming its upon confirming the service) and then when would I be paid?
3. What API or software can handle managing users/billing/etc through short code signups? I googled and found mbill, but any recommendations?
4. What FTC laws and regulations are on this industry as far as marketing practices, sign up age, etc?

I know its a lot of questions, so an answer to any of them would be a step in the right direction :)
posted by schindyguy to Computers & Internet (3 answers total)
1) 40% or more depending on the country/ operators involved. Around 40% would sounds right for lower volume in US -- basically you'd go through SMS integrator (mBlox, etc.) to get coverage across operators. There are some set-up fees and monthly minimum commitments.

2) User's mobile account is debited upon completion of the SMS transaction and she then pays it on her phone bill (or has pre-paid).

Expect major delays on getting paid. Operators are very slow to pay the money out -- can be end of users billing cycle + 90 days + whatever time your aggregator takes. Might have improved somewhat in recent years, but not by much. Different users within network have different billing cutoff dates, so it's impossible to know for any specific transaction when you get the money. Also expect major differences across operators, or within subgroups of one operators (ex-Nextel vs. Sprint vs. Virgin Mobile customers).

3) The interfaces are SMPP or XML -- shouldn't be anything too complicated. Check integrator websites for more details.

4) Integrators can give you information on the rules and regulations relating to the content, target audience, allowed services, etc. In the US all the major operators and players are part of Mobile Marketing Association and more or less abide by their rules. Expect that double opt-in is required -- i.e. user needs to approve the transaction with another SMS.
posted by zeikka at 3:36 PM on February 7, 2011 [1 favorite]

Response by poster: @zeikka,

what other major SMS integrators are there besides mblox? preferably ones based in the US?
posted by schindyguy at 6:15 PM on February 7, 2011

Bango, OpenMarket, mopay, ...

There are lot of options -- but Bango and mBlox have been around for awhile. Have worked with both at some point in the past, but not lately.
posted by zeikka at 5:38 AM on February 8, 2011

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