Prepare for the Future: SMS Payments

One of the fastest growing technologies for making mobile payments is SMS. SMS stands for “Short Message Service” and is also commonly referred to as a "text message". With SMS, you can send a message of up to 160 characters to another mobile device. Most smart phones support this type of text messaging.

According to research conducted by, SMS accounts for a majority of financial transactions conducted worldwide. Mobile payments conducted through SMS will experience a year-on-year growth rate of over 28% and total $385 Billion in revenues.

If your online payment options don’t include a method of paying by SMS, you might want to consider adding it to your offerings. SMS Payments are one of the easiest and safest ways to make payments. Users like to use it because they can make payments without the need to remember passwords or have access to their credit card or bank details. All they need to do is text a premium message to a designated phone number and their payment is complete.  In most cases it takes less than a minute and they don’t have to worry about anyone getting hold of their bank or credit card details.

How do SMS payments work for the users? There are two ways in which SMS payments can be implemented:

  • Via a website and a code. The consumer who wishes to make a payment accesses a web page for SMS payments and is given a code and a phone number to which to send the text message. The user then sends this code to the specific text phone number.  When the message is received they receive another text allowing them access to their content or confirming that their payment has been made.
  • By entering their mobile phone number directly onto a website. The SMS payment provider then texts this number with a code. The user then uses this code to access online content.

In both cases the user has already entered their bank or credit card information with the company to which they are making the payment. Since the payment information is already known to the collection agency, a text message is authorization to make the transfer of funds.

A third method of payments through SMS is payments made through a mobile phone company. In this case the phone company makes the payment to the intended recipient and then adds the cost of the payment plus a fee onto the user’s bill. These are used primarily with small purchases, though, and will probably never be used to pay down debts.

The SMS payment provider takes their share of the revenue and passes the rest onto the company that supplied the product or service.

The advantages of SMS make it an attractive addition to an agency’s offerings. The consumer appreciates it because of the ease of use, and at no time are the customer’s financial details revealed to anyone but the mobile phone operator. This is why SMS payments are safe, easy and secure.

BillingTree payment solutions have SMS capabilities that can be added to your online payment options. To learn more contact BillingTree or call us at 877-424-5587.