State of Texting 2021

Introduction

Business communication was put to the test in 2020.

No matter the size, location or industry, nearly every business in the country was affected by COVID-19 and other crises that unfolded over the year. As challenges mounted, however, businesses continued to stay connected to their customers and employees through it all.

Businesses were tasked not only with the enormous responsibility of keeping their customers and employees safe from the spread of the coronavirus, but also with the pressure of quickly innovating areas of their daily operations and services to keep themselves afloat. Maintaining thoughtful and efficient communication of any changes was crucial.

For many businesses, COVID-19 was also the unexpected catalyst to their digital transformation—the integration and re-imagining of digital technology across a business that positively affects processes, culture and customers. To adapt to a global health crisis, businesses shifted services from in-person to online or re-examined how existing digital practices could better suit employees or customers.

Communication was a major component of these strategies, and texting shined as an effective tool for direct interactions. Texting was a preferred way to get in touch with customers before the pandemic and has maintained its popularity during this time of crisis, offering fast, visible communication across multiple use cases.

Worker wearing covid mask

In this edition of Zipwhip’s annual State of Texting report, we surveyed over 2,000 businesses and consumers to gain perspective on how they were affected by the difficult year. We asked questions surrounding mobile habits, challenges they experienced, texting use cases, communication preferences and much more.

We encourage the re-publishing of text, data and graphics in this report, as long as all uses appropriately cite and link back to the original report. If you’d like access to the raw data, please text our press team at (206) 816-3605 or email press@zipwhip.com.

2021 Key Insights

Texting is the fastest way for a business to reach the majority of its customers.

Fifty-eight percent of consumers say texting is the fastest way to reach them, making it a strong alternative to emails and phone calls. Fifty-four percent of businesses say they have a difficult time getting a hold of customers, and 78% say they play phone tag with customers “somewhat” to “very often.”

Read more here

More businesses adopted texting in 2020 as COVID-19 created a need for better communication.

Seventy percent of businesses now use texting to reach customers and employees, up 3% from a year ago. Thirty-four percent of businesses adopted SMS because of the pandemic, and 77% of them say they’ll continue texting post-COVID.

Read more here

The pandemic prompted consumers to send more texts than usual.

Fifty percent of consumers said they’re sending more texts than usual during COVID-19, with the majority (87%) saying they’re checking in with family and friends. Forty-nine percent are using SMS to keep in touch with their colleagues or employer and 44% are using it to schedule appointments.

Read more here

Texts about appointment reminders and shipment updates were most valuable to consumers in 2020.

Sixty-four percent of consumers said appointment reminder texts were the most valuable, while 48% said updates on shipments and 29% said discounts on products or services. Businesses should take note of the types of texts customers want to receive to ensure they’re providing value.

Read more here

Businesses lack awareness around TCPA best practices.

Forty-four percent of businesses that text are unfamiliar with the Telephone Consumer Protection Act, which safeguards consumers from unwanted calls and texts. Not complying with TCPA rules, like obtaining opt-in, can result in big, often expensive penalties for businesses. More than a quarter of businesses admitted to sending texts in 2020 to customers that hadn’t opted in.

Read more here

Text payments may be a missed opportunity for businesses.

Nearly half of consumers say they would like the option to pay a business by text if it was done securely, yet only 29% of businesses say they would consider accepting payments by text. As digital, contactless payment options grow more popular, businesses should be mindful of their customers’ preferences.

Read more here

COVID-19 and natural disasters had major impacts on businesses in 2020, but their outlooks are optimistic.

As a result of the pandemic, businesses had to make major changes. Forty-seven percent of businesses added new safety procedures, 36% saw a decrease in their revenue and 31% had adjusted hours. On top of that, 25% of businesses were impacted by natural disasters or other property damage. Despite those challenges, the average business rated their optimism for 2021 at 3.46, with 1 being not at all optimistic and 5 very optimistic.

Read more here

Thoughts from our CEO

We sat down with John Lauer, CEO and co-founder of Zipwhip, to get his reactions to our new data and find out what he thinks it means for businesses in the year ahead.

Consumer Mobile Habits During COVID-19

Consumers were glued to their mobile phones, which was intensified by the pandemic

Mobile phones, particularly smartphones, have been an important part of our lives for years. When COVID-19 emerged and began to transform everyday life, consumers turned to these devices even more.

Woman with face mask going through check list on smart phone while buying in supermarket.

To understand how the pandemic impacted the amount of time consumers spent on their cell phone each day, 64% said they spent more time, 30% reported the amount of time had not changed and 7% said they spent less time.

When we drilled down to find out how much more time consumers were spending on their phones, 39% reported spending an additional 1-2 hours a day, 35% spent an additional 3-4 hours a day and over a quarter (26%) spent more than four additional hours a day.





Understanding how consumers think about the communication channels available to them leads us to the next question. We wanted to know what drives their behavior in terms of how they choose to stay informed. We asked survey participants how soon after waking up in the morning they check their personal cell phones.


The top answer was “immediately,” with 34% of respondents choosing that answer—a 62% increase from the previous year. The next highest percentage was 33% who check their cell phones “within 5 minutes,” a 14% increase over the previous year. When we combine the percentages of these groups, 67% reported checking their phones within the first few minutes of starting their day. Think about your own mobile habits during the pandemic. Did you find yourself waking up with an urge to read the news or check in with friends and family? For many of us in 2020, this became the norm.


Of the remaining consumers in the survey, 20% said they check their phones within 30 minutes, 8% check them within an hour and 4% wait over an hour, which is down 71% from the previous year, showing that fewer people are waiting for this extended length of time before checking their phones.

When it comes to messaging tools, the texting app is one of the most frequently used features on a cell phone—even outpacing phone calls.

As noted earlier, consumers are spending more time on their phones as a result of changes in their routines due to the pandemic, with a majority checking their phones within five minutes of waking up. Because of this, we wanted to find out which messaging tools consumers use most.

An overwhelming majority (63%) use the default texting app on their phone. A much smaller percentage, 15%, use Facebook Messenger followed by WhatsApp (8%) and Snapchat (5%), with a handful of other chat services trailing behind with 1%-2%.

Has COVID-19 affected the texting habits of consumers? Clearly, the pandemic has impacted how we interact with others in our personal and professional lives. Face-to-face contact has been greatly reduced—if not eliminated entirely—and replaced with Zoom calls for many companies and organizations.  

Texting has also helped fill that in-person void by enabling individuals to communicate quickly and easily whether texting with one person or a group. 

Less frequent personal contact with others led to more texting for many cell phone users. When we asked about the number of texts consumers are sending during the pandemic, 50% said they’re sending more than usual, 14% reported sending fewer and 36% said the number of texts they send has not changed. 

The reasons why consumers are sending or receiving texts vary depending on the person and their life circumstances. When given multiple answers to select from, 87% chose “checking in on family and friends” and 49% chose “communicating with colleagues or my employer.”  

The other most frequently selected reasons include “scheduling appointments” (44%), communicating about home deliveries (43%), “curbside pickup of restaurant orders, groceries or other goods” (39%), “updates from schools” (28%) and “COVID-19 testing updates” (22%). 

Businesses continued to use texts to communicate with customers throughout 2020 

Eighty-three percent of consumers received a text from a business last year. As the graph above shows, deliveries and curbside pickup were important reasons for texting as in-store shopping and restaurant dining declined as social-distancing measures were put in place.  

Asian woman with take away orders during corona virus outbreak

Not only was texting a convenient way for both parties to communicate, but it ensured that the safety precautions businesses set up were communicated to customers, which kept employees and the public safe. 

Ensuring that business continues as normal, or as much as possible during a pandemic, is a testament to the power of the technology and how it helps facilitate commerce while positively affecting our lives. 

We wanted to find out who traditionally makes the first move when sending texts. It turns out that many businesses take the initial step when texting customers. In 2020, only 34% of consumers proactively texted a business. Perhaps many of them were unaware that the companies they do business with have a text line they could contact.  

Businesses that offer texting should make it clear that they can be reached by text as well as their other communication channels. They can use their website, social media pages and even employee email signatures to simply yet effectively spread the word that consumers can contact them by text.  

Adding a Click-to-Text” button on their website or placing the words “Text or Call” next to their text-enabled phone number is an immediate way to raise awareness that a business offers texting. It also provides an automatic opt-in for customers to provide their consent so a business can start texting them.  

For businesses looking to build their SMS subscriber list, marketing their texting capabilities on the home page of their website and other high-traffic pages is a good place to start.  

How often a business texts its customers will likely depend on the type of services it offers. Businesses that operate exclusively online may send fewer messages than those that provide in-person services where appointment confirmations and reminders are a common practice. Instead, online companies may use texts to send shipping updates or communicate about customer service issues.  

When we asked consumers how often they texted with businesses in 2020, the most frequent answer was “sporadically” (34%), followed by “once a week” (28%), while an equal percentage (14%), said “once a day” or “once a month.” 

With close to 60% of consumers saying they text with a business “sporadically,” “once a month” or “never,” we see an opportunity for businesses to better inform consumers about their texting capabilities.  

Some consumers may have wanted to reach out to a business but chose not to because the thought of calling and being placed on hold or waiting up to 24 hours for an email reply was unappealing. How much consumer engagement might have occurred if a quick text could have been sent instead? 

Customers Want to Text Your Business

Consumers text their friends and family because messages are seen almost instantly and responses can be sent just as fast. Over time, the convenience of texting has naturally resulted in their desire to use the medium with businesses.

Today, 58% of consumers say that texting is the most effective way for businesses to reach them quickly. And their preference for texting was more important than ever in 2020 due to the influx of COVID-19 communications that businesses sent to customers. Email inboxes were overwhelmed with messages from CEOs and business owners explaining closures and service changes that accommodated safety mandates. And additional time was spent on the phone cancelling appointments and offering refunds among other time-pressing issues.

While email and phone calls were important during this time, businesses were using them excessively, which may have made it harder to get in touch with customers right away. Many customers could have been reached directly over text message where the noise wasn’t as loud. And as our survey results show, a text would have been preferred.

For example, 64% of respondents said that an appointment reminder was the most valuable text they received from a business last year. “An update on the status of a delivery or item shipment” (48%) was also helpful to consumers and “a great discount on a product or service” (29%) rounded out the top three.

Traditionally, appointment reminders are sent out over email or done over the phone, while shipping and delivery notifications and discounts are communicated over email. These use cases may have become more pertinent to the text message in 2020 because keeping track of so many emails was difficult.

Online shopping skyrocketed due to COVID-19, which meant we had multiple tracking links in our inboxes at any given time. And because the high volume of online orders caused shipping delays throughout the year, many of us were likely revisiting those emails to check on the shipment status. Finding that one link can be a struggle with so many emails piling into our inboxes every day. A text is much cleaner and easier to access.

An appointment reminder text message makes sense for the same reason. A reminder is a timely communication that should be seen right away; sending it over email risks it being overlooked. A text reminder will be opened almost immediately and likely stay at the top of a consumer’s messages when they revisit their text inbox.

As for marketing messages in 2020, businesses tried to lure customers back throughout the year with discounts and deals on their products or services. These messages can be easily overlooked in a customer’s email inbox, but those who opt-in to text messaging from their favorite restaurants, retail brands and other services are the first to know of a discount when it becomes available.


But as useful as text messages are to consumers, they don’t find all content helpful.

Texting was widely used in the 2020 general election, but only a third of consumers said they found political texts useful—66% said they did not feel more informed about politics and candidates from text messages they received throughout the year.

Just a quick Google search of the term “political text messages” mostly results in pages that detail how to get rid of them. Political text messages can be incessant, and any registered voter in the U.S. would have likely received these text messages, especially if they lived in a battleground district.

A popular (and effective) use case for political texting is collecting donations. A text that follows an email increases the likelihood of a donation by 21% according to the Democratic National Committee. But perhaps consumers would regard political text messages differently if content was varied and more closely matched their interests. Campaigns may be able to retain subscribers by offering more content about candidate policies, for example, and even by reducing the number of texts sent throughout a campaign. Our text message inboxes are personal and too many messages from one sender can feel invasive.

Mass political texts can serve as an example to businesses of the unintentional misuse of texting. To prevent customers from unsubscribing to text communications, only send them the content they want to receive at a preferred frequency.

Is your business keyed in on what your customers want from you? Let’s take a look at how businesses fared in 2020.

The Challenges Businesses Faced in 2020

From a pandemic to natural disasters to social issues, 2020 was a challenging year

It would be hard to identify any business that hasn’t been impacted by the pandemic in some way, as well as the social and environmental issues that affected the country in 2020. Companies had to adapt quickly. They needed to find ways to protect not only their employees but their customers as well.

Some changes took effect immediately while others required more planning and time to implement. To gauge how companies were most affected, we asked how businesses changed as a result of COVID-19.

The most common response was that they added safety procedures and requirements (47%), followed by a shift to more contactless engagement, such as moving some services online (40%). Over a third (36%) reported a decrease in revenue and 31% reported a change in their hours of operation.

African American couple in masks doing business calculations of restaurant and checking bills. Calculating spends and damages. Reopen after lockdown. Counting at laptop computer Small entrepreneurship

One of the most visible changes, with 31% of businesses reporting it, was employees now primarily work from home, a trend that is expected to continue to varying degrees even after the pandemic has been contained. Just over one-fifth (21%) reported that their business reduced their headcount. Conversely, 21% of businesses said their revenue increased in 2020 and 9% of businesses reported hiring more workers.

In addition to the emotional, physical and financial toll COVID-19 has had on the country, 25% of businesses said they were also impacted by natural disasters or sustained other forms of property damage last year.

When companies face an emergency like a natural disaster or deal with the prolonged challenges of a pandemic, it highlights the need for streamlined communications. Many businesses are still struggling to effectively reach consumers.

Fifty-four percent of businesses said it was “very difficult” or “somewhat difficult” to get a response from customers. A smaller percentage (36%) said it was “somewhat easy,” while only 10% said it was “very easy.”

Phone calls are becoming a less effective way to connect with customers

Calling customers and not getting an answer or having the call go to voicemail is becoming increasingly common. When asked how often they find themselves playing “phone tag,” half of businesses say they do so “often” (29%) or “very often” (21%), with the latter being a 133% increase from the prior year. This indicates that phone tag is getting worse, which isn’t surprising given that 97% of consumers admit to ignoring calls from businesses and unknown numbers1. Additionally, 28% of businesses say they play phone tag “somewhat often” while only 22% replied “not often.”

One way for businesses to avoid phone tag is by texting. Texts simplify and streamline communications and they can be highly effective in combination with other contact methods, such as phone calls and email.

A text can be a message that updates a customer about an issue that’s important to them. But a text can also be used to schedule a time for a phone call when both parties will be available to talk, eliminating the back of forth of missed calls and multiple voicemail messages.

A text can also alert a customer that an email from a business is waiting in their inbox. Perhaps it contains a form that needs to be reviewed or filled out and emailed back to the company. Rather than relying on the customer to check their email, a text lets them know immediately that the document has been sent.

Using texts in combination with phone calls or emails can save time when communicating with customers.

To learn more about how consumer communication preferences are changing, download our free e-books:

COVID-19 Pushed Businesses to Try Texting

Seventy percent of businesses used text messaging to communicate with customers or employees in 2020, up 3% from the previous year.

The increase could be in part due to COVID-19 as 34% of businesses surveyed said they adopted texting because of the pandemic, an ongoing crisis that generated the need for quicker communication, often to many customers at once. Our survey also indicates that these businesses are having a positive experience with texting—77% say they will continue to use it after the pandemic ends.

Adopting digital tools like texting was an unexpected consequence of COVID-19, and it led to accelerated digital transformation for many businesses.

Digital transformation refers to how technology can be used to improve business performance and deliver value to customers, and for years, experts have urged the importance of early adoption. Businesses that hadn’t prioritized digital transformation practices across their organization were left with little choice once faced with a global crisis.

Serious adult hipster male using smartphone while sitting at bar counter of cafe in daytime

Classic in-person services, such yoga or cooking classes, were transferred to video-streaming spaces; brick-and-mortar shops created e-commerce sites for the first time; and many businesses set up new payment options to eliminate unnecessary contact. For example, 45% of businesses said they started offering contactless payment options because of COVID-19.

The pandemic may have proved to many businesses that an overhaul of resources isn’t necessarily required to implement digital transformation practices; change can start small. Perhaps now that they’ve experienced how these practices have positively impacted their daily operations (and their customers), businesses will continue to build on their digital transformation strategies post-pandemic.

The Most Common Business Texting Use Cases

Businesses use texting primarily for scheduling and customer service

When we look at texting use cases for businesses, some remain popular across the board. The top two categories are “scheduling and reminders” and “customer service and support,” a repeat of last year.

Sixty-three percent of businesses selected “scheduling and reminders,” followed by 44% that selected “customer service and support.” The next most popular use case was “alerts” (38%), then “internal communication” (30%), “marketing and promotions” (25%) and “inbound and outbound sales” (22%).

Portrait of a friendly male doctor or nurse wearing blue scrubs uniform and stethoscope sitting at desk with laptop in hospital checking mobile phone

Businesses save time by using texting to schedule appointments and then send confirmations and reminders. It often reduces the need for additional support staff as an employee using texting software can send messages from a computer or laptop and reach customers more quickly than calling or sending emails. Texts can also be scheduled in advance, enabling an employee to handle the task during non-peak hours.

Customers rated texts relating to scheduling appointments and confirmations and reminders as highly valuable. Likewise, businesses rated being able to confirm appointments by text as valuable to them. They help reduce no-shows, which is important because missed appointments can be costly for companies, especially small businesses.

Here are some examples of how texting is commonly used in the following industries.

Healthcare

  • Send appointment confirmations and reminders to ensure attendance.
  • Improve onboarding by having patients text a photo of their insurance card to speed up the process.
  • Use scheduled text reminders to eliminate appointment no-shows.
  • Quickly reach employees or physicians who refer patients to you.

Fitness

  • Schedule class reminders and personal training sessions easily with text templates.
  • Use auto-reply messages to ensure clients get a response, even when you’re away.
  • Connect prospects with free trials and generate leads by prompting interested individuals to text a specific word to your text line to receive a free workout.

Insurance Claims and Distribution

  • Send appointment reminders, share claim status updates and next steps.
  • Allow policy holders to text photos of VIN numbers, property damage and declaration pages to save time and eliminate room for errors.
  • Schedule appointments with new customers to discuss policy options and existing customers to update their coverage as life circumstances change, such as adding a new teenage driver to their auto policy.

Staffing and Recruiting

  • Send job descriptions to groups of candidates with BCC text messages to share openings with more people in less time.
  • Use texts to schedule interviews, confirm appointments and send reminders to ensure candidates arrive on time.
  • Texts candidates after interviews to get feedback and gauge how the meetings went.

Financial Services

  • Schedule appointments to discuss loan options.
  • Accelerate closings by having applicants send photos of needed documents using their mobile device.
  • Reduce charge-offs by connecting with delinquent borrowers to collect payments discreetly.
  • Use templates to standardize text messages that are sent frequently.

Restaurants

  • Inform customers they can make a reservation by text. Once confirmed, use a scheduled message to send an automated reminder, allowing them to respond immediately if they need to cancel.
  • Improve the experience of walk-in customers by sending an alert when their table is ready if they’re waiting outside the lobby.
  • Send confirmations for curbside pick-up and provide instructions for what customers should do when they arrive.

It goes without saying that 2020 was not a typical year as the coronavirus dominated much of it. As businesses learned, time is of the essence when dealing with a public health emergency. Some businesses turned to texting, realizing that it’s a convenient and rapid form of communication they could use to inform others quickly and easily. Research shows that 83% of texts are read within 30 minutes; however, many texts are seen and read within three minutes2.

We wanted to find out if businesses have been using texts to notify employees or customers of potential COVID-19 exposure. Thirty-eight percent of businesses said, yes, they’re currently using texting for this purpose, while 22% said they weren’t but they’re considering it. Twenty-one percent said they’re not using texts to notify others and they don’t plan to, while 19% said they weren’t sure.

Businesses Still Text from Cell Phones Despite the Risks

A majority of businesses (66%) text their customers from either company-provided or personal cell phones.

Conversations over text message should take place on a centralized platform using business texting software, either installed on a desktop or on a mobile device. Without texting software, businesses and customers are left open to a few risks and inconveniences:

  • There’s an increased risk of data exposure. Personally identifiable information (e.g., mailing or email addresses, phone numbers or health information) is often exchanged over business texting interactions. Many native texting apps have security limitations, which can leave messages vulnerable to outside parties. Using texting software with encryption technology in transit (to ensure that data is being transmitted through secure connections) and at rest (to protect your local data storage) will keep messages safe.
  • Managers don’t have oversight of their team. Management can’t monitor conversations between employees and customers when they’re taking place over a mobile phone’s native texting app. They’re unable to track, for example, customer service practices or whether employees share consistent messaging that aligns with company policy. Management traditionally monitors every other aspect of business operations; customer-employee conversations over text should also be included.
  • Work and personal contacts aren’t separated. Texting software typically comes with a mobile app that lets teams use their business phone number on their personal phone, allowing them to easily keep work phone numbers separate from friends and family. There’s also less risk of accidental texting since employees won’t mix up customer names with personal contacts.
  • Client information may get lost. Business texting software provides a centralized platform to store messages and contact information so that management won’t lose access to contacts if an employee leaves the company.
  • It’s harder to apply TCPA best practices. Businesses that text their customers should already be familiar with the Telephone Consumer Protection Act (TCPA), a set of regulations that protect consumers from unwanted phone calls and text messages. Before sending the first text to customers, obtaining their consent (opt-in) is a must. And customers should always have a clear option to revoke that consent, too (opt-out). Manually keeping track of customer consent isn’t advised as there’s more room for error. Texting software can provide automated opt-out tools that block employees from texting anyone who no longer wants to receive texts.

Home Office Concept, Young female freelancer working remotely from home sitting with her shiba inu dog on arms using laptop computer and stylus drawing sketches on touchpad for graphic designers

Texting is a casual medium, but it shouldn’t be treated as such when it’s used for business purposes. Companies should review best practices, implement company guidelines and educate employees about protecting privacy for their customers and the business itself.

Protecting Consumers: The Need for Better TCPA Understanding

Businesses should understand that some text messages can be considered spam

Business texting falls under the Telephone Consumer Protection Act. It’s subject to the same regulations as phone calls to protect consumers from things like invasions of privacy and scams. The Federal Communications Commission reported that unwanted calls, both illegal and spoofed robocalls, are their top consumer complaints. While less common than robocalls, spam text messages do exist. And they’re just as frustrating for consumers.

As noted in the previous section, the TCPA requires businesses to obtain opt-in consent before texting customers. To gauge how familiar businesses are with this legislation, we asked about their familiarity with it. Only 22% of businesses said they are “very familiar” with the dos and don’ts of the TCPA. A larger percentage (35%) said they are “somewhat familiar,” yet the largest group (44%) reported being “not familiar.”

Spam text messages are unsolicited and unwanted. Consumers often wonder how the sender got their phone number to begin with. Spam texts might be part of a marketing campaign a business sends to reach as many customers as possible with a promotion. Or the spam text might be the equivalent of “junk” mail.

One of the most important distinctions when determining if a text is considered spam relies on user consent. Did the recipient consent to be texted by the business? Can they easily opt-out of the messages and have that choice be honored?

We asked businesses if they ever sent a text to a customer in 2020 who hadn’t opted in. While a majority (53%) responded “no,” 27% replied “yes,” and 20% reported that they were “not sure.”

Being ignorant of the law is no defense. There is a need for businesses to have a better understanding of the TCPA. Failure to abide by government regulations could have negative consequences for businesses, including expensive penalties. The good news is that compliance is not difficult. But it does require putting opt-in and opt-out procedures in place before texting with customers.

Zipwhip published an e-book on TCPA Compliance as it relates to texting to help businesses follow best practices3. Download your free copy today.

How Texting Could Change the Future of Payments

Helping businesses and consumers understand the benefits of paying by text

Soon, texting could change the way businesses accept payments. Text or SMS payments allow anyone with a smartphone to pay for products or services after receiving an invoice by text with a secure link from the provider. The secure links can include both text-to-pay options by credit card and other mobile payment applications, like Apple Pay and Google Pay.

The responses to our survey indicate that many people are open to the idea. When we asked consumers if they would like the option to text payments to a business if they could do so in a secure way, 46% said “yes.”

For consumers and merchants, this type of transaction is an instant and non-disruptive way to make and confirm payments. Some common use cases for text payments include:

  • E-commerce transactions
  • Insurance premiums
  • Utility bills
  • Auto finance payments
  • Rent payments
  • Medical payments

Male customer with protective mask paying bill by cell phone in cafe

However, there’s a bit of a mismatch between what consumers want and what businesses plan to do.

The chart below shows that only 29% of businesses would consider accepting secure payments by text message. A little over a third (36%) said they would not consider it at this time. While 33% said they didn’t know if the business they worked for would consider it, it could be that some will adopt the practice as they learn more about the safe options available to them.

Due to COVID-19, contactless payment options such as Apple Pay and Square are becoming more popular. But the real opportunity for businesses is to accept payments by text because the buyer and seller can be in separate locations, a benefit that will be appreciated long after the pandemic is over. It enables businesses to have conversations about purchases or bills and instantly send and receive payments by text. Customers can make payments without ever leaving their texting app, providing a truly contactless communication-and-payment solution for businesses and consumers.

Consumers continue to show a preference for texting. Merchants can take advantage of the speed and high response rates of the SMS channel. The process is simple: the customer receives a text with a secure hyperlink to make a payment either with a secure form fill or a link for a mobile wallet transaction.

As smartphone technology advances, additional forms of text-based payments will become commonplace. The expanded rollout of 5G and RCS (Rich Communication Services) technologies will play a larger role in how consumers and businesses communicate. Eventually RCS will enable text payments and we believe they’ll become customary.

Read on to learn more about the future of texting technology.

The Future of Texting Technology: 5G & RCS

Both 5G and RCS generated a lot of buzz in 2020.

5G is the next generation of wireless technology, and its faster speeds will greatly improve the user experience on RCS (also known as the 2.0 of SMS). Aside from providing stronger RCS functionality, 5G is expected to bring its own separate set of benefits for both businesses and consumers, including:

 

The technology’s positive impact to mobile users wasn’t highlighted nearly as much as the range of rumors and conspiracy theories that surrounded it in 2020; among them were general concern over radiation and that 5G towers were linked to the spread of the coronavirus. Given the negative perception around how 5G affects one’s health, we were curious how many consumers are currently using the technology and how many plan to use it in the future.

Only about a third (33%) of consumers are using 5G on their personal phones today. 5G rollout has been slow, and it’s estimated that it will take years before there is widespread availability. There is also a barrier of device compatibility as not every mobile device can support 5G.

For those not using 5G, 18% said they were “somewhat” to “very unlikely” to use it when it becomes available to them.

The top reported hesitation around 5G adoption was not due to health concerns, however (as only 6% cited that). Instead, consumers said there was “no need” to upgrade (28%) or the price of 5G-enabled phones was too high (20%).

RCS may not have faced the same scrutiny as 5G did in 2020, but it did experience a major shift in availability to some mobile users. Google announced that RCS rollout via its Android Messages app had been completed, giving millions of Android users worldwide access to RCS messaging features.

The excitement around RCS has been building for years as SMS technology has long been overdue for an upgrade. SMS is an effective tool for businesses, but customer engagement is limited to the technology’s basic features of plain text and small multimedia file support. While other messaging apps have adopted advanced features (such as iMessage’s large file sharing, location sharing and read receipts), SMS has been largely left untouched.

As RCS becomes more ubiquitous, 5G adoption will be important. 5G will help businesses best experience the advanced, interactive features offered by RCS, including:

  • Read receipts (confirms the text message was opened)
  • Improved images and media (supports larger images and lengthy videos, for example)
  • Typing indicators
  • Ability to make payments over text message; and
  • Chatbot automation

These features will transform the customer experience via text. For example, chatbot features will let businesses automate responses and offer suggested replies to customers (e.g., if the business asks a question to the customer, a few reply options can be presented so the customer has a quick way to reply with just a tap).

And making payments within a text message will add ease and convenience to commerce. A customer will have the option to seek assistance, shop and make a payment without ever leaving their native texting app. Downloading a branded, third-party app to engage with the business wouldn’t be necessary.

RCS is an exciting prospect for businesses but many still have a lot to learn about the technology itself and how it can benefit them—61% say they’re not familiar with it. The rollout of RCS to consumers faced many delays and Apple’s plan for adoption remains unknown, so it’s not surprising that general awareness of the technology is low. But Android does make up a large share of mobile users in the country, so awareness may accelerate this year now that RCS is available to them.

The Year Ahead

Despite the challenges they continue to face, businesses on average feel optimistic about their future in 2021.

Their outlook could be influenced by a few changes expected this year. The end of the COVID-19 pandemic is in sight as vaccinations are now rolling out to the public, and as a new administration steps into the White House, additional financial aid could be on the way.


Another reason for their optimism could be due to the digital transformations they’ve made as a result of COVID-19 and the positive impact those changes have had on their business. While the year was stressful and scary for many, the pandemic pushed businesses to try new things that improved customer experiences or helped employees better get their jobs done—all while keeping their communities safe.

For example, some businesses embraced remote work, which showed that employees can still be productive and engaged while working at home. And fewer employees in the office meant that businesses could save money on things like commuting expenses, rent and utilities, cleaning services and food.

Businesswoman at home having a video conference call with colleagues. Woman greeting coworker during a web conference.

Others shifted their entire business from in-person to online, which expanded their customer base. A class that was once restricted to locals, for example, can now be taken by anyone, no matter their location.

And new tools like texting were adopted to safely and conveniently communicate with customers during a crisis. Texting is the preferred way to get in touch with businesses for many consumers, which means they’ll be more likely to see and reply to a message. It’s a win-win solution for businesses and their customers.

We were also curious about support for smaller businesses in 2020. Small and local businesses have felt the impact of COVID-19 the most, and in many cases their local communities rallied around them, purchasing gift cards, ordering takeout and embracing online experiences. Thirty-six percent of consumers said they now shop more with small and local businesses during the pandemic. This could be, in part, due to the appeal of new services or communications that businesses have offered as a result of COVID-19.

Happy business owners

While businesses are itching for a return to normalcy, business as usual may not be the right move for everyone at the end of this global crisis. Many of the remote and contactless offerings necessitated by COVID-19 have proven to be convenient and sometimes more profitable. To build loyal customers and keep employees happy post-pandemic, businesses should permanently add any changes that customers and employees have come to appreciate and continue to embrace digital transformation strategies that make it all possible.

Methodology

For the purpose of this report, Zipwhip surveyed over 2,000 businesses and consumers. We surveyed each participant individually and blindly from a purchased panel sample through SurveyMonkey. All respondents are from the United States and followed a census breakdown of gender and age. The survey was run in December 2020. No participants were compensated for their participation.

Appendix

1. Why Your Customers Don’t Answer the Phone Anymore

Methodology: In May 2019, Zipwhip partnered with SurveyMonkey to poll 500 consumers to learn more about how they use phone calls to communicate today and how consumer sentiment toward phone calls has shifted.

2. 2019 State of Texting Report

Methodology: In Dec. 2018, Zipwhip partnered with SurveyMonkey to poll 2,000 businesses and consumers about their communication preferences and current uses of texting. Key takeaways were highlighted in the first-ever State of Texting report.

3. TCPA Compliance E-book

This e-book helps businesses learn how to minimize legal risks when texting their customers. When selecting a business-texting solution, companies must consider the potential for legal exposure under the Telephone Consumer Protection Act of 1991.

Previous Years' Reports

Looking for another version of our annual State of Texting report? You can find them here:

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