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Follow UsBy Eric Auchard and Sinead Carew
SAN FRANCISCO/LAS VEGAS - Online payment company PayPal on Thursday said MTV and the National Basketball Association and others will accept payment from its new service offering purchases by mobile phone text message.
The move by PayPal, a unit of online auctioneer eBay Inc., marks a big step in further bridging the worlds of electronic commerce and brick-and-mortar stores, by giving consumers a pay option via telephone.
PayPal Mobile lets consumers instantly buy goods and services, such as compact discs, DVDs and apparel, by sending product codes via text message.
PayPal signed up News Corp.'s 20th Century Fox Home Entertainment, NBC Universal's Bravo, Viacom Inc.'s MTV, and the NBA Store for its Text to Buy service.
"The promise of mobile commerce has never been stronger," PayPal's chief Executive Jeff Jordan said as he introduced the service in a keynote speech at the CTIA wireless show.
Jordan cited the popularity of online payments and the prevalence of mobile phones as reasons why consumers are more open to making payments using their cellphone than eight years ago when PayPal first tried offering a mobile payment service.
PayPal had turned to online payments when it realized the mobile idea was before its time.
"Moving money this way was more cumbersome than carrying cash," Jordan said, describing PayPal's plan to offer a mobile payment service via Palm personal digital assistants.
Gartner Inc. analyst Avivah Litan said PayPal has taken years to deliver a mobile version of its online payment service, fearing that without specific uses the format would fail.
"It was never a question of PayPal not having the technology to do this," Litan said. "It was always an issue of having the right applications," she said.
Litan said mobile text message payments have a natural U.S. audience among 18- to 30-year-olds, who spend their days texting one another and often use PayPal because they don't qualify for credit cards and eBay because it's cheaper than retail prices.
PayPal has more than 100 million customers.