According to Zipwhip’s 2020 State of Texting report, consumers prefer texting over other communication channels like email or voice. Texting has been widely adopted for everyday communication reminders like doctor’s appointments, banking alerts, and marketing promotions.
There is now an emerging trend in business texting where consumers also prefer to pay by text directly from their smartphone. According to the Worldpay Global Payments Report, in 2020 the biggest trend in consumer payment continues to be the rise of mobile payments. They make shopping online easier than ever and already lead e-commerce payment preferences with 42% of spending in 2019—up from 36% since 2018.
What are text payments?
Text or SMS payments allow anyone with a smartphone to pay directly by text for products or services after receiving a secure payment request from the provider via text. The secure links can include both text-to-pay options by credit card and other mobile payment applications like Apple Pay and Google Pay or the payment can be added to the customer’s cell phone bill. For consumers and merchants, this is an instant and non-disruptive way to make and confirm payments.
Common use cases for text payments
- E-commerce transactions
- Insurance premiums
- Utility bills
- Auto finance payments
- Loan payments
- Membership fees or dues
- Rent payments
- Co-pay or medical payments
- Service and collections
Zipwhip’s 2021 State of Texting report found that 46% of consumers would like the option to text payments to a business if they could do so in a secure way. Yet currently only 2% of businesses offer paying by text, which shows a huge opportunity for merchants who implement a pay-by-text option to increase customer satisfaction.
Why are text payments trending up?
The global pandemic has driven an increase in e-commerce transactions and the need for contactless payment options. With 81% of the population now using smartphones, a study conducted by Jupiter Research predicted that the number of digital wallet users would double from 2018 to 2020, and recent times have made that prediction seem low. According to a new J.D. Power survey, one in five respondents said they are using mobile payments more often in 2020 due to COVID-19.
What are the benefits of offering a text payments option?
Consumers continue to show a preference for texting. Since 95% of texts are opened by the recipients within 3 minutes, merchants can take advantage of the speed and high response rates of the SMS channel by offering a way for consumers to pay by text.
The process is simple; the customer receives a text with a secure link to either add their method of payment or make a payment and complete their transaction using a mobile wallet.
Customer engagement rates and satisfaction will increase. Once consumers have opted in to receive SMS messages there are additional opportunities to communicate special discount offers or product promotions to that consumer. Adding this functionality to your workflows via API is easy and inexpensive.
If you are a payment platform or a merchant seeking to add a texting payment option here are some things to consider:
Consumers prefer A2P texting. An A2P (application-to-person) text is a message sent by a business using conversational software. It includes automated tools that send two-way alerts and notifications such as a payment reminder or transaction receipt. It also includes accurate delivery notifications, so the sender knows that the payment message has been received.
Security and reliability are extremely important in payment systems. Make sure that you select an SMS provider that is established and known for their security, reliability and safety protocols. Your customers will want to know that their payment information is being sent in a secure environment.
Toll-free 800 numbers are a viable option for the texting payment use case
Here are four key reasons:
- 800 numbers are easily recognized and trusted by your customers
- Speed: toll-free delivers delivery provides faster throughput than other A2P texting channels
- Message delivery receipts are provided to the actual handset
- Toll-free numbers are inexpensive and can be set up quickly for texting payments
How Zipwhip can help
Zipwhip is the leader in business texting and provides both software and a high throughput API for A2P texting. Our API allows businesses to easily integrate text messaging into any business application. Zipwhip has invested heavily in creating a network where brands can communicate safely and reliably with their customers.
Zipwhip is the only texting provider that all Tier 1 and 2 wireless operators trust to manage their network level connectivity for high volume commercial traffic. Zipwhip controls the network capacity, safeguards and is SOC 2 Type 3 compliant for security, the industry standard for SaaS providers.
Text payments with TXT2PAY
Zipwhip also offers TXT2PAY, which makes it easy for Zipwhip Premium customers to leverage the power of text payments in their day-to-day accounts receivable workflow. It allows businesses to enable more paperless billing and spend less time reaching out to customers.
TXT2PAY creates a faster way for your customers to complete requested payments without the need for an email or phone call. The secure TXT2PAY link allows the customer the freedom to add any payment method that is most convenient for them such as credit or debit cards, even ACH like Apple Pay or Google Pay. However, there’s not a way for a transaction to be added to a phone bill.
To learn more about accepting payments by text, check out our TXT2PAY integration page.
If you’d like to learn more about the benefits of using toll-free numbers to pay by text as well as a part of your overall business communication strategy, we’re offering a free trial of Zipwhip. For information on how to use business texting, including common use cases, etiquette tips and text templates, download our free e-book: The Ultimate Guide to Texting Your Customers.