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Will That Be Cash, Credit, Or SMS?

Bankers, mobile network operators, and retailers have all come together to offer a text message-based payment program to the citizens of Belgium. Unlike near-field communication, which requires a handset equipped with an NFC short-range radio, this program will let every cell phone user complete retail transactions from their phones.

This is how it works. You walk into your favorite Jiffy Mart, select your items, take them to the register, and then tell the teller you want to pay via SMS. As long as both you and the retailer have Belgian bank accounts, you can proceed. The seller sends a payment request to the buyer with a text message. The buyer then keys in a PIN to approve the sale and responds to the seller's SMS. Once the transaction is complete, both parties receive an SMS receipt.

Of course, there are some drawbacks. Transactions must total more than 6 euros ($7.98) and the sale also will cost both parties a small fee -- 33 cents for the buyer, 65 cents for the seller.

Unlike NFC, which requires specific retailer-based loyalty program accounts or credit cards, the Belgium trial will allow any regular bank account holder to send money.

The idea may sound cool in concept, but according to some time trials, the transactions take 18 seconds or longer. Personally, I can't see it moving even that quickly. As a tool that's meant to replace cash, there's no real time-savings here. And compared with the 500 milliseconds it takes to complete an NFC-based transaction, 18 seconds is an eternity.

The one thing I'll say for the trial is that it actually brings all the pieces -- banks, network operators, and retailers -- together at once. The trial isn't limited to one carrier or one bank, meaning it's more widely available and has a higher probability for success.

Whether or not it will catch on is a different story.

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