Not sure how many noticed it, but yesterday's Hindu and Times of India newspapers announced a new service that enables transfer of funds to any bank account in India via mobile phone. 

http://www.thehindu.com/business/Economy/article905970.ece?homepage=true

We are all aware of the successes of mobile remittances in countries like Kenya (recall M-Pesa:  http://www.bbc.co.uk/news/business-11793290) and Philippines (recall G-Cash: http://www.mobile-financial.com/node/4502/Mobile-payment-provider-Boku-partners-with-Philippines-telco-Globe-for-mobile-payments).

However, these services require either an app to be downloaded and installed on a mobile phone or (b) some arrangement with operators to use the SIM card balance as a store of value. It is difficult if not impossible to install app where there is no internet connectivity/data plan and the phone is a low-end phone. Working with an operator has its own set of challenges.

What caught my attention in the news article in the Hindu was that it mentioned:

"In case of a lower-end phone where the application cannot be installed money can be transferred through SMS. "

This is an interesting angle to explore for us as well as for all the developers of SMS-based applications. This opens the field for creation of payment-related SMS apps. More importantly, it would allow developer of any SMS app to have a payment functionality to start monetizing independent of operator or any other third party ..similar to what PayPal enables for say iPhone app developers (http://mashable.com/2010/10/26/paypal-mobile-express-checkout/)

Interesting area for all of us to explore and contribute ideas to as this is such a nascent and rapidly evolving field where the rules of the game are yet to be written.

Manish