But in those cases you don't have to sign up for it, or create an account with SMS verification. That should be totally unacceptable.

Imagine going to a grocery store and when you want to buy your pack of soda and chips, they tell you: Woah there, pardner! You need an account with MyPaymentProvider before you pay for those groceries! Oh, and you'll need to set up a password and give them your mobile number...

Yeah, I don't love it. Forcing phone numbers is the worst, as I've practically never needed to call or be called about a purchase, but it's a de facto ID.