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Singapore: M1 to pioneer payment via SMS

Run out of coins for the drinks dispenser? MobileOne (M1) customers can now use short message service (SMS) to pay for their canned drinks.

Run out of coins for the drinks dispenser? MobileOne (M1) customers can now use short message service (SMS) to pay for their canned drinks.

SINGAPORE--Local telco M1 and drinks manufacturer Yeo Hiap Seng Ltd (YHS) today announced the launch of a mobile payment system enabling M1 subscribers to buy canned drinks from two trial YHS vending machines.

The machines are located in M1's headquarters at International Business Park and in the basement of shopping arcade Paragon.

To buy a drink, the user keys in "BUYV1" as an SMS message on his mobile phone and sends it to the number indicated on the vending machine.

Once the amount payable on the dispenser's digital display switches from "0" to S$0.50, the user can make his drink selection. Upon successful completion of the transaction, he will receive a confirmation SMS from M1 on his phone.

The total amount payable will then be charged to the user's next handphone bill.

At the press conference, Don Gadsden, YHS president for Food & Beverage, said the company is freezing the price for the first 5,000 canned drinks in the two vending machines at S$0.50, instead of the usual S$0.80. He expects the drinks to be consumed over "a few months".

"This showcase is a good opportunity to test public reaction and to give the public time to become familiar with using mobile phones to buy and pay for goods and services," said M1 chief executive officer Neil Montefiore at the media conference.

According to Gadsden, the SMS micropayment project took four months to implement, during which M1 and YHS worked with German-based GAP Technologies on the GSM modules for the drinks machines, and local firm EdgeMatrix on the micropayment platform.

Montefiore went on to say that an extension of the exclusive partnership between M1 and YHS will depend on the results of the pilot scheme.

Should M1 and YHS continue their project beyond the initial 5,000 canned drinks, YHS may equip 30 to 40 percent of its 1,500 drinks dispensers around the island with the payment system. Singapore reportedly has about 6,000 drinks dispensers.

The criteria for which vending machine will be outfitted with the micropayment facility will depend on where the most customer traffic is expected.

YHS's Gadsden declined to reveal the cost of the project, but said implementing the mobile payment system is expected at S$2,000 to S$3,000 per machine.

The investment will be shared equally between the two partners, affirmed Montefiore.

M1's CEO also added that the telco may look at a similar mobile payment system for other services such as carpark coupon payment and MRT ticketing.

SMS micropayments are not new--this method of mobile commerce has been implemented in Finland where travelers can purchase beverages via their mobile phone. However, M1's pilot program is believed to be the first of its kind in Singapore.