WTG, CPS

With all the hype surrounding the auto manufacturers last week, this news item got short shrift. Nonprime indirect lender Consumer Portfolio Services has launched a pilot program that enables borrowers to make their monthly car payments via cell phone.

The system is straightforward: CPS customers sign up for Western Union’s Bill Alert Text Message Service, then enter their CPS account numbers and payment information. When payment is due each month, they receive email alerts through VeriSign. Then all they need to do to pay is text “yescps” to initiate a Western Union transaction (for which they’ll pay an extra $10).

Ahhh, finally an auto lender that understands the benefits of mobile technology. Sure, the average CPS customer is 41 years old, but even among that age bracket, text messaging is climbing. Here are some recent stats:

* More than 1 trillion text messages were sent or received in 2008, almost triple the volume from 2007 (363 billion).
* On average, more than 3.5 billion SMS messages are sent or received per day.
* 82% of adults 18 to 24 are avid text message users.
* Of the 25 to 49 age bracket, 72% use text messages.
* In all, 53% of those who send and receive text messages are at least 35.

Needless to say, the concept is certainly on target. I would add, though, that cell phone payments should have been part of the auto finance industry for years now.

Tags: cell, cps, mobile, sms, text

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Comment by JJ Hornblass on May 4, 2009 at 2:21pm: What I find interesting is not that CPS sees its age demographic as finding this service valuable, but that CPS projects the payment tool as finding value within its credit-score demographic. The convention wisdom has always been that the demographic with lower credit scores is not as technological sophisticated or "adventurous" as prime borrowers. Based on the adoption rate of this product, we'll see whether that convention wisdom is still correct.

Comment by Michael Smitka on May 4, 2009 at 3:29pm: Cell phones usage:

The US may not follow global trends, but ... in some parts of the world cell phones are used primarily for texting rather than for voice. Some of this is pricing, you can get "as used" phone contracts. But you can text in public, whereas phone calls in mass transit or restaurants are frowned upon (or worse). My sense is that it is growing in the US, which typically lags the rest of the world in cell phone usage, and that as in the rest of the world this not specific to higher-income/sophistication users.
In Japan, many consumers in 2007 (when I last lived their) used their cell phone as their primary internet browser. Web advertising & retailer web sites were geared towards that, including with sites specific for cell phones with their more limited graphics resolution. Again, I observe a minority of students and others whose usage is leaning in that direction, the iPhone crowd.
There may be some "real estate" for web developers ... and the software may be there already, in other markets, ready for localization to the US context.