Skype Adds SMS Service, Cleans Up Payment Process

Popular VoIP and instant messaging service Skype has rolled out a new SMS gateway for its users and launched a beta program to accept PayPal payments for its SkypeOut service.

Using a gateway service provided by Connectotel, Skype users can send SMS messages to mobile phones. The users first have to add the user "smsgateway" to their Skype contact list, then await authorization from the gateway. Once authorization is received, the gateway contact will accept SMS messages from the user's Skype client.

Last month, the company rolled out a service that allows SMS users to send messages to Skype clients. With the addition of the outbound service, Skype users can reply to messages more easily. More details are available on Connectotel's Web site.

Responding to widespread problems with its payment processing, the company also introduced PayPal support for its customers earlier this week. In a message on the Skype discussion forum, a staffer described PayPal support as "beta," but said tests with U.S. users had been satisfactory.

Skype has been under fire from its user community for several months thanks to problems with its credit card clearing house. Users in several countries reported problems getting the site to accept payments, then noted transactions on their bank statements that initially seemed to indicate that they'd been charged for service Skype had failed to provide. In some cases, users complained to fraud departments, compounding the company's difficulties with credit card processing.

In response, the company attempted to provide an alternative to credit card payments by directing users to the Moneybookers service, but users complained of poor responsiveness, extra charges, and byzantine verification procedures on the part of that firm.

Skype provides free VoIP service between its users, but charges €0.2 per minute for its "SkypeOut" service, which allows Skype users to call conventional telephones.