Are SMS-based bitcoin transactions the key for emerging markets?

In many emerging-market countries, most average people are still too poor to afford relatively expensive items like computers and smartphones. Even if they can afford such luxury items, access to reliable internet providers can be just as elusive. In fact, the only piece of modern technology that has significant market penetration in these comparatively poor countries are cheap, non-“smart” cell phones. For bitcoin to live up to its promise of easy digital payments to the billions of “unbanked” in the world, those same “outdated” cell phones might prove to be a powerful channel for adoption.

In the first practical implementation of this concept, Singapore-based payment processor and merchant solution provider CoinPip has partnered with U.S.-based startup 37coins to provide SMS-based bitcoin wallet services to countries across Asia. The “SMSwallet” uses well-established technology to allow users to execute simple commands from any SMS text-capable device.

After signing up for the service and connecting their phone number to their account, users can simply text queries and commands to CoinPip’s hosted wallet. By sending “BAL” to the number, for instance, a user would be sent a reply text with their current account balance in mBTC. Users can also view past transactions, view their own bitcoin address, and send bitcoins directly to another user via phone number or bitcoin public address.

Speaking with CoinDesk, CoinPip co-founder Anson Zeall explained:

The mobile market in Southeast Asia is massive but the usage of smartphones is still lagging. So QR code scanning is not that useful. Thus the collaboration with 37coins is going to make payments more convenient for everyone else.”

Zeall says CoinPip is planning to expand their services into new markets in coming months. The company already offers Android-based wallet and point-of-sale systems in Hong Kong and Indonesia.