Western Union Co. has developed a text-message bill-payment service that could help billers collect more easily from subprime borrowers.

The Englewood, Colo., remittance company said Thursday that it is testing the service with a subprime auto lender.

Observers said consumers are increasingly interested in managing their finances with their mobile phones, and that delivering payment notices to phones could make the bills seem more important to the recipient.

Lori Beck, a product management director in Western Union's payment services unit, said the service went live Wednesday with the indirect auto-finance lender Consumer Portfolio Services Inc. It is available to CPS' 290,000 borrowers, and Western Union plans to offer it to other billers.

Users can charge the payments to a credit card, standard debit card or prepaid card. The funds are sent through Western Union's SpeedPay bill-payment service, and the remittance company charges consumers a $10 fee for each transaction.

Fred Brothers, the managing partner of the technology consulting firm eCom Advisors in Dublin, Ohio, said the mobile payment option can help move the lender to the top of the borrower's list of things to do.

"This is a pretty smart service, especially considering who CPS is," he said. The lender's Web site says it focuses on "individuals with past credit problems, low incomes or limited credit histories," and Brothers said its borrowers "are people who may be a little less rigorous about sitting down with their bills and paying them."

Sending a billing reminder to a customer's phone can improve the lender's position in the hierarchy of payments that need to be handled, Brothers said.

"When you're lending to people who are a little more credit-challenged, the whole issue is getting the money as soon as you can," he said. The borrower is "going to process this immediately."

Beck said borrowers enroll by calling a toll-free telephone number or visiting the CPS Web site, providing their mobile phone number, account number and payment account data.

Five days before a payment is due, Western Union will send a text-message payment request to the borrower's phone. Borrowers can authorize the payment by responding "yescps" to the text message.

Beck said Western Union eventually plans to offer the text-payment services to other billers, though she could not say what kinds of companies or consumers might be interested in it.

Bruce Cundiff, a research analyst at Javelin Strategy and Research, said the mobile payments business offers a considerable opportunity for billers. "We're seeing increased consumer desire to be able to engage in bill-payment activities in a mobile setting," Cundiff said.

He compared Western Union's service to expedited payment services available from many banks, which typically charge a fee. "I certainly see that as a major hook, and in the early going as a source of return," he said.

Western Union is pursuing other strategies for transferring funds by mobile phone. It announced a pilot program in December that lets people in the United Kingdom send funds directly to mobile phone users in Kenya. It also began working last year with mobile network operators in the Philippines.

Other companies also see the the mobile handset as a bill-payment device. The lockbox-software vendor Wausau Financial Systems Inc. said in October that it was planning to test a text-message bill-payment service with the software vendor ClairMail Inc.

Pete Daffern, ClairMail's chief executive, said the Wausau pilot project has been delayed by changing priorities in a struggling economy. Though he was not familiar with Western Union's service, he said he was not surprised. "I expect a whole bunch of competition."

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