Pay now, or pay later. Pull out the wallet, or pull out the smartphone. Consumers have many options in terms of how they make payments and transact. In terms of convenience, ease, and personalization, few options are quite as easy as text-to-pay. In this blog post, we’ll take a closer look at why text-to-pay makes so much sense for consumers and businesses alike.
What is Text-to-Pay?
Text-to-pay technology allows people to make and accept payments using Short Messaging Service (SMS) on mobile devices. For consumers, SMS payments and invoicing capabilities provide yet another choice for contactless payments. For businesses, this technology can streamline payment acceptance, improve customer satisfaction, and drive channel sales. The four AppTech patents, allow secure mobile payments using simple text messaging protocol. That means people can make and accept payments without an internet connection or data plan. 
How Text-to-Pay Meets Consumers’ Wants and Needs
Without question, consumers are in the driver’s seat. And what do people want? Speed and convenience. Knowledgeable help and friendly service—at least according to research from PwC, in which 80% of American consumers said these “are the most important elements of a positive customer experience.” So, why is it that pay-by-text fits the mold for contemporary consumer expectations so well?
Consumers Want Choice When It Comes to Making Payments
You might remember a time when checks were accepted at the cash register. Everyone carried cash (if they had it). Checks, cash, credit and debit cards. While those forms of payment still remain, they’re joined by far more convenient choices. Choice is exactly what customers want when it comes to making payments. Instead of cash or check, more than 50% of American consumers now use contactless payments. By some estimates, 35 percent of customers are willing to pay by text. While text-to-pay is still a growing technology, adopting it now could give businesses a significant advantage over competitors. is certainly there for businesses who want to acquire new customers tired of old options.
Consumers Want Convenience, Too
Different payment options present different levels of perceived friction. There’s a reason that most people pay with card or contactless payment at the cash register—you insert or tap, enter a , and you’re off. Cash requires a few more steps (counting, issuing change, etc.). Checks? Well … You get the picture. But even the most ubiquitous contactless payment options aren’t quite as convenient as the pay-by-text method. If you’re like most smartphone users, you’re checking and responding to texts all day. It’s the most convenient way to quickly communicate. It’s also quite convenient for making payments. Here’s what that flow might look like:
- You receive a text from a business (your utility service, for example, telling you the balance due on your monthly utilities bill).
- Text your reply (1 = “pay now,” for example).
- Transaction is completed using your connected payment card or bank account.
That’s a lot easier than logging into your provider’s website or app, then tracking down the payment section and completing the payment. In many use cases, text-to-pay comes to the consumer by way of text message, which they see in the flow of something they’re already doing all day (texting). Text-to-pay:
- Doesn’t require a login
- Eliminates the need for customers to remember account and invoice numbers
- Reduces security risk, as the business never sees or touches credit card and account numbers
Text-to-Pay Can Enrich the Customer Relationship
Payment is no longer strictly a transactional step in the customer journey. It can be a critical part of the user experience. Another touchpoint. A potentially repeatable opportunity to build a relationship and drive brand affinity. Text-to-pay creates opportunities for more friendly, seamless marketing, too. Think appointment reminders, special offers, etc. Rather than getting reminders about bills in one place, offers in another, and appointments in another, text messaging streamlines that communication into a single, highly visible thread. This can be a game changer in a world where our attention is pulled in numerous directions.
What’s Good for Consumers is Good For Business
Beyond enriching the customer relationship, text-to-pay has operational and strategic advantages for businesses. As a channel for sales, renewal, and marketing, SMS boasts impressive engagement. We know, for instance, that 70% of recipients check a new text message within five minutes and 90% respond to texts within 30 minutes. According to the same research, text messages are opened and read almost 138% more than email. It’s no wonder that many companies are making text messaging a core part of their customer communications mix. The business benefits are myriad:
- Reduce time and money spent tracking down late payments, bounced checks, etc.
- Request payment immediately upon completion
- Cut down long billing periods
- Eliminate follow-ups by phone calls, emails, and letters
- Increase renewal rate for subscriptions
Text messaging can also help businesses diversify their payment flows. In the period The Forrester Wave™ evaluation of merchant providers, Forrester analysts underscore the importance of new forms of payment acceptance (subscription management, disbursements, and so on). If you’re a subscription-based business, for example, text messaging might help improve renewal rates, for example, or reduce late payments. In terms of use cases, we briefly mentioned monthly utility bills as a use case for pay by text. Indeed, utility and telecommunications companies are finding that, beyond improving payment collections, pay-by-text is helping to reduce the costs of printing and sending paper bills. The same pay-by-text model can be applied to other industries. Healthcare, for example. By some estimates, healthcare service providers must collect 20% to 35% of their total revenue directly from consumers. What’s more direct than text-to-pay? Healthcare providers can enable one-click payments and reminders, payment scheduling, and even installment programs.
Here to Stay and Only Getting Better
Is text-to-pay the future star of omnichannel commerce experiences? Possibly. The trend line is certainly pointing upward, with more businesses and industries finding new ways to integrate this payment method. In our view, the organizations that can seamlessly integrate pay-by-text into their existing payment channels, while continually learning and optimizing based on the data, will win the biggest. Because the preference for pay-by-text isn’t going anywhere. It’s how well organizations can personalize and perfect this payment method that will make all the difference for customers—B2C, B2B, or otherwise.