PayPal users get to buy by text message

eBay-owned internet payments outfit PayPal has announced it is venturing into the world of mobile payments.

PayPal Mobile will launch in Canada, the UK and the US over the course of this month. Any PayPal user will be able to access the service once they've registered their mobile through their online account.

PayPal Mobile will allow users to send money to each other using their phones or directly to businesses. The service won't internationally, according to a PayPal spokeswoman - for the text payment to go through, both buyer and seller must be in the same country.

The system will be based around short codes, the five digit numbers used for text voting, competitions or subscription-type applications.

Companies accepting payments will be able to place their own product codes in advertising next to products for sale, alongside PayPal's short code phone number: 62226. Users can then text the product code to PayPal to pay for their item.

For person-to-person transactions, users will need to text the amount of money and a recipient's phone number to the PayPal short code.

Once the number is texted either to a business or an individual an automated system will ring back the PayPal user and prompt them to enter their PIN.

With some 10 million users currently signed up with PayPal in the UK, the payments company is hoping it can convert its online customers into mobile users.

According to a report by Juniper Research, m-commerce will be worth more than $40bn by 2009.