SMS payments are becoming one of the growing alternatives for making payments in business transactions. As a result, it is necessary for small and medium-scale businesses to consider this viable option. In this article, we will discuss everything needed to know about SME payments and how businesses can leverage it in their payment operations.
What Are SMS Payments?
SMS is the abbreviation for Short Messaging Service. SMS payment means making payments through text messages. While few businesses are already using this payment method, many others are new to the idea. An SMS payment is when a customer sends a payment via text. It is also when the business sends a purchase invoice to the customer by text.
In SMS payments, a link is attached to the message. This link redirects to a payment form where the transaction details are entered and confirmed. The process is secured, relatively easy, and makes purchases convenient for both the buyer and the seller. It is basically a contactless payment procedure. If a business is interested in SMS payment system, it should know how it works.
How SMS Payments Work
SMS payments are quite easy and fast compared to other payment systems. Although SMS payment service providers operate differently, there are some basic processes they all generally possess. When it comes to how it works, below is what every business should expect from a typical SMS payment process:
- To start an SMS payment system, the business needs to enable the SMS payment option with an SMS payment service provider. The SMS payment service providers integrate messaging with the payment-compliant feature.
- The business texts a shortcode number to the customer’s phone number. The code contains a link that shows the purchase invoice. The customer can also initiate the sale procedure by sending a shortcode text containing the link.
- The link redirects to a secured payment system where the customer can fill the required details and finalize the sale procedure.
- The customer approves the payment. They can also save their debit card information to ease subsequent payments.
- Depending on the SMS payment service provider, the customer may receive a unique code to complete the procedure.
Some SMS payment service providers operate credit card systems. So if the business is already working with a credit card facilitator, it can also inquire if there is an SMS payment system available. It makes the messaging-payment integration faster. A purely SMS payment service company can work too.
Benefits Of SMS Payment Systems
SMS payments offer some benefits that may not be available in other payment systems. These are the reasons why some big businesses now make the payment alternative available to their customers. Below are some of the advantages SMS payments have over other systems:
- All Devices Are SMS-Enabled: Virtually every phone has access to mobile text messaging feature. This means texts are easily received and read quickly.
- Quick Payment: Since texts messages are read quickly, payments are also made fast. So generally, SMS payments make payments delivery more efficient and time-saving. This is a very good leverage if the business has a lot of customers in the payment queue.
- Contactless Payment: There is contactless buying where the buyer orders online and receives the package at their doorstep. It only makes sense that there is contactless payment. SMS payments offer contactless payment, which became more popular during the coronavirus pandemic.
- Invoices Are Read Quickly: Customers can read the invoice quickly when received via SMS. This also means payment can be made immediately. It is fast and convenient for both the seller and the buyer.
- Limits Fraud: SMS payments are a way to curb fraudulent transactions and fake credit card payments. It also prevents counterfeit cash payment since funds are sends virtually through a secured channel.
- Multiple Payments Types: With SMS payments, there are several payment types depending on what the business requires or what the customer wants. For instance, there are credit and debit card options, ACH payments and also digital wallets options (PayPal, Google Pay).
- Convenient Initiation: SMS payments can be initiated from anywhere. There is no need for any hardware purchasing instrument like POS.
What To Consider Before Choosing An SMS Payment System
To be safe when choosing an SMS payment system for any business, below are some considerations that should be made:
- The SMS payment service provider must be PCI compliant and possess high data security levels.
- The operation of the SMS interface and all other functions must be easy to navigate.
- Backup systems to ensure data are saved and transactions are recorded.
- The provider should provide a unique dedicated number for the business which can be used by the business and its customers only.
- Check for provider that boosts of high quality connection to ensure messaging is trouble-free.
- Compare the subscription fees of the providers.
Popular Text-To-Pay Services For Businesses
There are a few SMS payments service providers. However, it is best to get started with the provider that offers what fits your business. Service providers are unique when it comes to functionality and fees so it’s best to go for the one that works well with your business operation. Below are some popular SMS services for businesses.
- Paysley: This service integrates messaging-payment through text or email. It also allows POS by scanning a QR code linked to the payment. Text and email fees are different and are charged per message.
- PaymentSavvy: This service uses multiple payments options all in one SMS payment package. Customers can also store their payment information here for future use.
- Relay: Formerly Rhombus, this service uses Stripe to initiate payments through debit and credit cards. The service also attaches marketing and customer service features to its functionality. Relay fees are charged monthly with specific number of “tickets” given.
- Everyware: This service pairs with Visa’s CyberSource to provide credit card functions with SMS payments. It is a new, growing system SMBs are using.
- Podium Payments: PP combines marketing features, automated messaging, debit/credit cards processing, and customer service system. The service operates a robust system that large businesses can work with.
Is SMS Payment Option Good For Your Business?
SMS payments are a good payment option for all businesses. They are fast, reliable, and secured. Every business should find the SMS payment that works with its processes. An effective SMS payment service helps the business connect with its customers and makes payment easy and convenient.