Phone-based payment is popular in many countries where credit cards aren't as common, or are more tightly regulated. Usually it works by submitting your phone

Phone-based payment is popular in many countries where credit cards aren't as common, or are more tightly regulated. Usually it works by submitting your phone number, being texted an authorization code, and then submitting that code back to the merchant. The situation in the U.S. is a holdover from the heyday of 1-900 phone numbers and phone-based home shopping, where customers genuinely wanted to be able to purchase things from a vendor over the phone. Credit cards weren't quite en vogue, and provided a stopping point where the customer could have a chance to bail. The phone company was more than happy to get some revenue off of a service that both the vendors and consumers genuinely wanted, but they didn't really think the details through. Nor did they expect that cheap internet and mobile phones would magnify a non-optimal payment system into a massive factory for scams.