SMS vs. barcodes in the mobile charity arena

Here’s an interesting one – GoMo News published a piece yesterday on how 2d barcodes are getting into the mobile charity space. Mobile giving has become much more high-profile this year, since it was so useful in Haiti. Since we published the story yesterday, we’ve been in contact with Canadian barcode provider Mobio – which feels there’s a lot to be said for using barcodes instead of SMS when it comes to giving.

What’s the deal?

At this point, I want to state very strongly that no one is trying to start a fight here. I simply got into a chat with one of the guys at Mobio, and we discussed ways that barcodes can outperform SMS. We’re not saying that SMS aren’t a valuable tool for mobile charity – you can see all the pro’s of text as a charity tool in our earlier articles about Ezetop, the Mobile Giving Foundation and the mobile charity “supergroup” that formed around SMS.

But Mobio claims that it has gotten some bad feedback about SMS from the actual charities that work with providers. Complaints include: high monthly running costs; small donations ($5-10); long processing times for the donation to actually arrive (120-180 days, depending on the operator); anonymous contributors; and 30-40% operator cuts from the amount donated.

The “operator cut” didn’t apply in the case of Haiti, where carriers allowed 100% of the donations to go through – but it would seem that in the case of less high-profile emergencies (like a local hospital, for example), the operators want their piece of the action.

What are the advantages of barcodes?

Mobio is using barcodes to help people donate to an Ottawan hospital – as part of an annual telethon run by the hospital, a barcode will be displayed on the screen. Snapping that barcode will allow the user to donate any amount they like to the hospital. But what are the advantages to SMS?

The SMS model works through the operator. The Mobio model works through the credit card.

Pros: Users register a credit card with Mobio, and each transaction uses a one-time password for authorisation. And vecause it’s a credit card transaction, the payment is received within a day or two.

Cons: People can be very wary of giving ANYONE their credit card details. One of the advantages of doing things through SMS is that it works on the mobile bill, so no details are sent to anyone.

The Mobio model allows larger transactions.

Pros: SMS donations are rarely larger than $10. And, as mentioned above, the operator can sometimes take $3 or $4 off the top of that. Credit card transactions through a barcode allow for larger donations.

Cons: the “small donations” aspect of SMS is one of its draws. A lot of people who wouldn’t have otherwise sent anything will send $10 by SMS. Small donations aren’t a good idea with credit cards, because you get hit with the credit card fee.

What we think?

There’s an interesting pay-off here. If you do mobile charity by SMS, you’ll get more people to donate – but the amounts will be smaller, and they’ll take much longer to arrive. If you do it by barcode the amounts will be larger and will arrive almost immediately – but you’ll hook less people.

And, of course, there’s one final MASSIVE pro when you’re talking about SMS – there are 4 billion people in the world with SMS capable phones. The amount of people who can and will use barcodes is far smaller than that.

Overall, though, I would say that a barcode charity drive is a much better option for local drives and campaigns. It’s more flexible and faster – SMS is a clunkier, more awkward process that only really works on a grand scale.