What Is Pay by Text? A Beginner’s Overview
Pay by text is a convenient way to pay for products, goods, and services using a cell phone. Working in the same way as a regular Short Messaging Service (or SMS), this payment method is quick and simple. The purchaser simply sends a text paying for the service or item. This goes to the user’s cell phone payment provider. The provider will clear the transaction. Then, the purchase price will appear on the cell phone’s monthly bill. In the case of prepaid balances, there is a deduction made in the payment amount. SMS payments allow cell phone users to quickly, safely, and securely pay merchants, send remittances or make deposits.
With so much potential, it is no wonder that more companies are harnessing this handy payment system. Not only do companies reap the benefits of speedy payments, but customers benefit from an easier way to pay. Today, pay by text is popular with charities that see it as a simple and rapid way to receive donations. However, other companies are benefiting from it as well.
Why Adopt an SMS Payment System?
There are numerous advantages to adopting an SMS payment system. These benefits are for both the customer and business alike.
- Ease of use
- Speedy of use
- No need to enter bank or card details
- No need to have a bank account
- No need to recall usernames or passwords
- Very secure
- Ability to accept payments from billions of cell phones around the world
- Ability to accept payments from customers with no credit card or bank account
- Building on customer loyalty through SMS marketing strategies
- No need to verify customer identity
- No need to chase after payments or deal with declined cards
- Billing is entirely handled by cell phone operators for extra convenience
- Simple to use
Is Pay by Text Still Relevant?
With the popularity of modern online web portals, businesses often wonder whether pay by text is still relevant. Well, companies can rest assured that it certainly is. Research has shown that SMS payments are on the rise. They are currently worth more than $380 billion in revenue.
Therefore, for any company that does not offer SMS payments as an option, adding it to its portfolio could help. Payment by SMS is easy and safe. Consumers also like using a pay-by-text service since there’s no need to remember usernames and passwords. They don’t even need their card to be present, or to have a bank account at all. They only need to text to the specified number to complete their payments. Payments take under a minute and there are no concerns about security.
How Does Pay by Text Work for Users?
There are two ways to implement SMS payments.
Customers who want to make SMS payments access a website. Then, they are given their own code, as well as a telephone number. They send their code to that specified number. Once the telephone number receives their message, they will receive a text. This will confirm the website has received the payment.
The other way of implementing an SMS payment involves entering a cell phone number on a web page. The provider will then text the cell phone with a specific code. The phone owner will use the supplied code to gain access to online content.
For both methods, users will already have entered their credit card or bank details with the organization they are paying. Since the company already knows the payment details, the text serves as an authorization to transfer funds.
There is a third way to pay via SMS message. This is to pay via a cell phone company. The cell phone company will pay the recipient. The company will then add the cost of the payment plus an extra fee to the user’s bill. Usually, the phone company does this with smaller purchases. However, the phone company can also use this method to make larger payments. SMS payment providers will take their revenue share before passing the remainder to the organization that supplied the service.
BillingTree’s Pay by Text Service
Many companies are finding that SMS payments are a useful addition to their offerings. It is paramount these days to find as many ways as possible to facilitate simple payments. When consumers have more choices, they are more likely to pay in full and on time.
Consumers appreciate pay by text since it is simple to use and highly secure. Companies appreciate SMS payments because they keep cash flowing. BillingTree offers a pay by text service as part of our Payrazr Portfolio. You can easily add SMS payment capability to your company’s online payment offerings. This will improve your customer relations and boost your profitability. You can find out more about the benefits by calling BillingTree today.