How to donate to Haiti by text message?

On Tuesday January 12, 2010, Haiti was hit by a catastrophic magnitude 7.0 earthquake. US government and people show great sympathy to their poor Caribbean neighbor (the world does the same thing). A new phenomenon in relief effort, different from tsunami 2004 relief effort, is that people use text message to make donation to Haiti.

How can we make a donation to Haiti by text message? It's very simple. Send HAITI to 90999, then you make $10 donation to American Red Cross relief effort in Haiti. It was reported that until 1:00p.m., January 17, 2010, text message donation to American Red Cross relief effort had reached $7 million. An impressive number!

American Red Cross does a great job to make this innovative way to raise fund. Verizon spokesman Jeffrey Nelson commented "These are donors who are typically the hardest to reach: young people. They're reacting to something that affects them and realizing their few dollars can make a difference. Texting has opened up a whole new world for philanthropy." American Red Cross also does a great job to market this donation method. Over the weekend when I watched the football game, I saw the advertisement on both CBS and Fox about text messaging to make donation to American Red Cross many times. TV audience know and execute this method extremely easily.

I searched around and could not find other humanitarian aid organizations such as Mercy Corps make similar donation push using text message. I hope that they will adopt this method soon.

$10 donation will show up on your mobile phone monthly bill. In Can we use mobile phone to pay?, I discussed that there will more and more chances that we need to use mobile phone to make payment. Right now, mobile phone carriers just passively put these donation payment on the monthly bill. It is actually a golden opportunity for carriers to make the new mobile payment service besides the voice and data service.

On TV, I saw some helicopters in Haiti drop package down. Even in poor countries, many people have cell phones now. Maybe donation cash can be distributed to these poor people directly through cell phone directly so that the cash can be delivered to people in great need. It is a direct donor-to-donee donation.

Update on January 18, 2010 : The WSJ article Quake Sets Back Haiti's Efforts to Improve Telecommunications reports that 35% of 9 million people living in Haiti have mobile phone, up from just 5% in 2006. So the mobile phone may play a role in donation such as the aforementioned direct donor-to-donee donation.

Can we use mobile phone to pay?

A year ago, I watched some videos which show in South Korea, people use mobile phone to pay in shopping malls. Mobile phone works as an ATM card. This case shows that mobile payment is possible in rich countries. On September 24, 2009, the cover story of magazine Economist is the Power of Mobile Money, which reports the extensive usage of mobile phone in the poor world. Mobile minutes work as currency in some area. But in USA, people have not use mobile phone to pay yet. I expect that it will change soon.

With popularity of smart phones like iphone and Android-based phones, more and more transactions are made through the mobile phone. So mobile payments is needed. Paypal has an app on Android market. It has a simple interface. Some reviewers complain that users need to log in every time they use it. I think it is for security reason. I do not mind this small inconvenience. Think about the consequence if the cell phone is lost and some one somehow passed the security pattern.

There are some mobile payment startups which make mobile payment without banking account or credit card. Instead, they make mobile payment show up on the monthly cell phone bill directly. Boku and Zong are two rivalry in this mobile payment arena. I expect that mobile payment will become more popular in USA this year. But it depends on how people accept the mobile payment and how smart phones and mobile apps usage grows quickly.