SMS Pays Off: The Power of Pay-by-Text
Mobile payments are all the rage lately—just look at Apple Pay or Square. It’s an exciting development that’s changing the face of mobile commerce–as long as customers have an iPhone 6 or access to a card reader for smartphones.
But what if customers could pay without downloading an app? What if they could pay for things over text messaging?
SMS lets customers pay using their mobile phone without the need of an app, and without needing to be at a payment terminal. Currently, methods like ApplePay rely on near field communication (NFC) to transmit credit card information from the customers’ phone to a terminal.
Tapping your phone to a payment terminal is supposed to be the easiest way to pay, but what if you didn’t even have to be at a store to do it?
One of the best things about SMS payments is that it doesn’t require a fancy card reader or the newest phone. It’s truly mobile because customers can carry out these transactions anywhere, anytime, on any cell phone. Plus, it takes almost no time at all.
Letting customers pay by text increases time and cost savings for companies and customers. For example, a customer who had to renew a magazine subscription would typically receive a letter or email from a company with a reminder, and the payment process might take a few days or weeks.
However, renewals or any sort of quick transactions can be expedited with text payments. Instead of engaging in a lengthy back-and-forth about renewing a magazine subscription, customers could get a quick outbound text that looks something like this:
What makes outbound texts like this so potentially powerful is the fact that texting is a channel customers use often and prefer. Texts have a 98% open rate, a stat other channels could only dream of. Marketing texts also have an extremely high response rate of 45%: over ten times higher than direct mail or email.