5 Things Banks Can Learn From the American Red Cross

With the help of mobile payments, Americans are rallying to support Japan in the aftermath of the March 11 tsunami.

Japan is not alone as it faces the aftermath of an 8.9-magnitude earthquake and the ensuing tsunami that hit its shores March 11.

For many Americans, though a world away from the tragedy, doing their small part to help out is as simple as sending a text message. Since the 2010 Haiti earthquake, The American Red Cross text to donate campaign has been a popular means for the organization to raise small donations from a large volume of people. Sending $10 to Red Cross — billed through the mobile carrier — is as easy as texting REDCROSS to 90999 (message and data rates may apply).

While none of this relates directly to banking technology, it demonstrates the power of simplicity in mobile transactions, and shows that people aren't so hesitant to use their mobile device to spend money when it's for the right reason.

A spokeswoman for mGive, the Colorado company powering the American Red Cross' campaign, couldn't share the number of donations made by mobile phone to the Red Cross (SMS accounted for some $32 million in donations in the aftermath of Haiti's earthquake). But she did have a few thoughts as to why text-message donations were so effective:

The platform is pervasive - most people have their mobile phone with them every waking hour

Availability - the mobile phone and SMS give people the ability to take immediate action

Instant gratification - wherever they are, whatever time it is, the user can make an immediate impact

Ease of use - all it takes to make a payment is one initial text message to initiate it, followed by an affirmative confirmation to an ensuing message (in the case of Red Cross, after a person texts the keyword to 90999, they receive a follow-up message asking whether they're sure they want to make the payment; by responding with a yes or no, the transaction is complete)

Easy to learn, easy to share - Text REDCROSS was a trending topic on Twitter following the tsunami; most anyone can figure out how to make a payment via SMS, and they're happy to share the idea with others

People want to help out in a time of crisis. But the sheer volume of people using the technology — in the millions after Haiti, with millions more likely joining in for Japan — show that, when made simple, mobile money is something people in America might be willing to adopt.