Opinions: Beem - the SMS Payment System

I hate cash. I hate carrying it. I hate going to cash points. I hate losing it. I hate touching it. I do however, enjoying putting it up my nose, as anyone at Wil Harris' stag do will contest. But, this nasal interaction aside, I've been living a fairly cashless lifestyle for quite a while. If somewhere doesn't take card, I simply vote with my feet and find somewhere that will. I find I spend less, I can track my spending better and invoicing for expenses is a hell of a lot easier. I've also managed to downsize my wallet to something the size of a credit card.

But paying by card isn't perfect. “Beem” is a new venture here in the UK that has a slightly different approach that they are hoping will catch on. This isn't aimed to take on PayPal, VISA or Barclaycard – it's considered to be something entirely separate, more a replacement for cash itself. The money doesn't earn interest, but doesn't cost anything to user either – so it may as well be stuffed in your virtual mattress.

There is no denying that Beem is primarily aimed at teenagers and students. In many respects it's a little like PayPal – you have a virtual account which you (or someone else) adds funds into. This can be used in similar ways – transferring money to friends, as well as paying for services and bills. Unlike PayPal however, there are no fees to the end user. I successfully transferred 90p to a friend without problems – it was instant and free. PayPal has always been severely limited when it comes to micro payments. Someone once “donated” 10p to me as a joke and the entire 10p was taken as a fee. All the fees are covered by the businesses that accept Beem.

Your Beem account is controlled entirely by SMS. You have a single number you store in your phone and you text this number various commands which are unfortunately reminiscent of a coding function.

Let's take this as an example - you're at a bar and you want to pay for a drink. First, you SMS “mypassword balance” to Beem, where mypassword is obviously your password to access Beem. This will return you an SMS telling you if you have enough cash in your account to run off and buy your drink of choice. So you ask your bar person for a drink and offer to pay by Beem. At which point you tell the bar person your phone number. Then using a computer kept behind the bar, the bar staff simply put in your phone number and the amount requested. You then receive an SMS saying that the funds have been requested, to which you then reply “mypassword beem bar 10.40” where “beem” is the action, “bar” is the reference code set by the pub in question and “10.40” is the amount. Then the bar person waits for the computer screen to refresh and tell them that the funds have been accepted, before handing over your drink.

There are several reasons why I don't like this process. Number one, you have to tell the bar person your phone number. I might be happy doing this, but there are a lot of attractive women who won't feel entirely happy handing over their number to a barman.

The second issue is that you are dependent on having a phone that is charged, having enough signal to receive SMS and enough credit to reply – as most teenagers are no PAYG.

The third issue is that texting after even a single drink gets tricky and the text messages required are a little complex and annoying. This adds the security risk that you will probably end up with a dictionary based password (to help with predictive text) or having your password stored in your custom dictionary – which could easily be read.

Then finally, of course, there is the security aspect that SMS is NOT transmitted in an encrypted form. Monitoring the airwaves for activity isn't that tricky. On top of this, your password will be stored in your outbox every time you send an SMS. Remembering to delete Beem e-mails from your inbox is one thing – but who clears their outbox? Beem may well be locked to your phone number, but once you've got the password – it wouldn't be difficult to start tracking the phone and getting hold of it at the right opportunity.

There are plenty of plus sides to Beem. Distance purchasing is actually more secure than using a card – as the only detail you ever hand over is your phone number. Equally, getting sent “cash” whilst out and about is merely a text message away from annoyed parents bailing you out.

Right now the number of businesses supporting Beem is limited and the only way this will even have a chance of kicking off, is if it has support from some major players. And a lot of this will depend on the fees to the business – will they be cheaper than currently charged for credit card terminals? Will they have to invest in a netbook for processing that data? Will there be stand alone machines that are less volatile to being abused for other uses?

As a way of quickly transferring money between friends, I think it's great. But Beem needs people to use this money to buy products for Beem to have a business model – and right now it's too complex, slow and under utilised.

The chaps at Beem are really nice guys and very enthusiastic – I want them to succeed, but in it's current incarnation I really don't see it happening. They have lots of ideas on how to improve it, and some of my issues have already been raised and they are working on them, but realistically this is the sort of product that needs to work right first time, or it will never be taken seriously.

Paying by card at a bar is still easier and quicker, and anyone over the age of 16 has access to a debit card. Payment methods do need a re-think, with a number of alternatives such as BarclayCard's OneTouch hitting the market, to take micro-payments, fast payments and online payments into account. Right now, I'm not sure Beem is the answer... yet.

So let's set the record straight. I hate cash too; however it is a necessary evil. We either don't have it when we need it, or don't have the right denomination of it, at the most inconvenient times. Ever been stuck at Paddington Station in need of 20p for a pee? Or stuck in a very long queue, behind that sweet little old lady while she spends an eternity searching through what appears to be a very small purse on the outside and is obviously the size of the Tardis (one for the Dr Who fans) on the inside?

We have all been there. Beem was never intended to be seen as a replacement for cash, credit/debit cards, or PayPal. It's just another way to pay that will suit some people, in some circumstances, on some occasions. It's what we call "Beem Moments". Those times, occasions, or circumstances when you can literally put a Beem on some ones face, by sending a much needed tenner (that is not swallowed up by their overdraft), donate to charity (without up to 40% of it being nicked in "admin charges" or simply top-up a loved ones mobile phone (independent of network operator) and as an added bonus if you want to track your expenditure, you can go to your online control panel at beemme.co.uk and see all of your transactions, and download them to an Excel spreadsheet - all at the press of a button, and if you wish you can transfer the balance back into your standard bank account.

Beem is about choice and discovering those moments in time where a simple text makes life that little bit easier. With regards to the bar experience you referred to, we agree and the "Bar Tab Product" is in the lab ready to go. There's always room for improvement, so thank you.

Last but not least whilst we hope that you continue to use Beem, we do not recommend that you try using the cash in your Beem account with your phone placed up your nose, apart from the fact that you may find this painful, you may also find it difficult to press the right keys

Regards,

Kerl @ Beem UK

I like creativity and Beem and OboPay are being very creative exploring the world of moving money using a mobile phone and I'm sure there is a need but I doubt its ever going to replace cash in the form its in now.

A recent meeting with Justin Billingsley (Orange UK Brand man) highlighted that the operators are marching down the path or replacing your wallet and your keys ... as he said "today you leave home with your wallet, keys and phone and we are working to remove the need for a wallet and keys".

Oyster cards included in the phone and the BMW keyless ignition system also included and you have it done, so technically its a simply step.

The bigger challenge is that VISA, Mastercard, Amex and Diners will lose control of the credit market, it will become Orange, Vodafone, T-Mobile and 3 ..

It was even discussed whether thumb-print recognition or iris scanning would be included to double check its you who has the phone ... even my Sony Ericsson W910i antique (but thin) phone has an additional camera facing forward (for video calls apparently!! ... as if... ) so that is a simple technical step too.

Also note that the FCC 911 law now mandates that cellphones have to include GPS and with companies like Air enabling "always on" low power GPS in battery powered devices this is already happening.

Here's a thought, will the credit card companies buy the mobile operators or a mobile operators by the credit card companies? ... or will they figure out how to coexist?

Spode, I would not be surprised if in the not too distant future you'll have to find something else to stick up your nose as I too suspect it will be tough to press the right keys ... but at least we'll know its you and we'll know where you are if you do try it with your phone!

Maximus