Friday, January 22, 2010

Text donations for Haiti?

It is wonderful that so many people have been inspired to make donations to Haiti and this has brought a lot of attention to the use of Mobile Payments to achieve this. (I made a donation the old fashioned way via my charitable trust account which will probably be paid by check to the Red Cross.)

In some ways this latest phenomenon reminds me of the people that lined up to give blood after 9/11. The problem was that sadly, not much blood was needed and a lot of it went to waste and with no crisis at hand, we are back to the mode where the agencies that collect blood have to beg people to come in for donations. Yes, I give blood regularly! (& if you can you should too).

The point here is that I wonder how much of that $10 is getting to Haiti? Normally payments by text messaging methods cost the receiver ~50% off the top and take 6-9 weeks to be received since the carriers wait to pay out until they collect from the consumer. Now, I have heard that at least in the case of Verizon, they were not going to wait. But, I have not heard if the carriers are waiving their fees or most of them?

The credit card industry has surely taken some criticism, some deserved, some not, over the last year or two. But, compared to mobile payments, they are much more cost effective and efficient. The fees are generally ~2-3% and the funds usually get to the merchant within 2-4 days. And of course, the dinosaur of all payments, checks, well we won't even go there. Those are close to free and if using the ACH almost as fast (wonder why PayPal tries to get you to use this as a funding mechanism!!)

1 comment:

SKlebe said...

Add'l details - just read that all the major carriers have agreed to accelerate the payouts to immediate on 80% of the value. It appears they are waiving the costs associated with the TXT message but I have not seen anything about waiving their normal processing fees for the payments themselves? The major credit card brands are waiving their processing fees.