Pick up the tab with your mobile

A US company has launched a service that lets customers pay restaurant bills by text.

Feed Tribes launched its service this week in a restaurant chain called Noodles & Co, in three Boulder locations.

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Consumers sign up through the company's website, establishing an account that's linked to a bank account. When customers are ready to pay the tab at a Noodles & Co (or at another merchant offering the Feed Tribes service), they punch in a short SMS code for Feed Tribes. A PIN number is used to access the customer's account, and a few minutes later, a code is sent to the phone from Free Tribes which is good for 15 minutes. Then the customer gives the code to the cashier, who enters it into a machine which debits the account.

Executives from Feed Tribes said their text-based payment method is not only convenient for consumers but also allows merchants to have a closer marketing relationship with their customers. Noodles & Co, for example, can send marketing messages to customers who opt to receive them.

Feed Tribes CEO Rod Stambaugh said in a statement: "The convergence of the cell phone at the point of sale allows merchants to build interactive loyalty with their customers. You may not read the newspaper or look at a billboard but you will definitely use your mobile phone each day."

Feed Tribes said Noodles & Co is the first chain to use its service. But the company isn't the first that allows businesses to accept payments from mobile phones. Throughout Asia, mobile phones have been used for several years to pick up the tab.

In Japan, mobiles with embedded computer chips allow people to hold up their phone to a sensor to buy everything from a train ticket to a bottle of Coke. The technology is spreading to other regions, as well. Some towns in Germany are testing the technology to let people buy electronic bus tickets and loyalty cards. It's also being used to offer discounts at some stores.

Motorola announced earlier this year that it is building handsets equipped with a specific chip to pay bills. The M-Wallet service will initially allow mobile phone users to do banking chores and to pay bills at participating retailers.

But there are security and privacy concerns. Critics fear that hackers could pickpocket electronic wallets. They also say that using phones to make purchases gives phone companies, merchants and marketers too much information about people's spending behaviour.

Marguerite Reardon writes for CNET News.com