With mobile commerce sales rising quickly every year, businesses are finding creative ways to create a seamless shopping experience for today’s active smartphone users. If you want to be a brand that’s ahead of the curve, SMS payments should be the next solution to set your sights on.
Text messaging is a highly effective communication channel that boasts an impressive 98% open rate. With plenty of people around the world always within arm’s reach of their mobile phones, this channel is an excellent way to get your message read, so you can get the sales you need.
We’ll dive deeper into what an SMS payment is, how it works, and when you can benefit the most from this payment option.
What is an SMS payment?
SMS payments, otherwise known as Short Message Service payments, are a modern alternative to traditional payment methods—such as cash, checks, and credit cards—that allow users to pay with a simple text. It occurs when a purchase is initiated via SMS and completed on a customer’s smartphone.
Instead of requiring consumers to log into a website or wait in long checkout lines, this mobile payment method enables them to complete transactions quickly on a device that’s likely already in hand. This text-to-pay option minimizes the number of actions and channel switching necessary for any buyer to convert, buy again, or pay what they owe.
Even as SMS payments make successful purchases possible in 160 characters or less, they’re still highly secure transactions. Your customers will never have to share personal data (including account details) directly in their text messages, so they won’t be susceptible to any unexpected risks.
How do SMS payments work?
The SMS payment process always begins with a shopper sharing their phone number with your business. Whether you’re using an automated lead-capturing tool or manually requesting and collecting contact information, this first step is necessary for you to reach out.
After a customer has provided their phone number and opted into texts, your job is to initiate a payment. Digital tools like Podium Payments guide your customers toward a purchase allowing you to text them a short link to a secure payment processing platform.
After tapping on this link, the buyer can view their invoice and pay by simply entering their account information. That’s all there is to make a new sale or bill payment happen. Your business may then follow up by sending a receipt to the customer.
In particular, Podium’s SMS payment system allows you to further customize this process by branding your invoice and adjusting the payment methods you accept. For example, you may enable credit card and mobile wallet payments, but prohibit direct transfers from bank accounts.
Benefits of SMS payments
SMS payments are one of the easiest ways for customers to send money in exchange for a product or service. No matter what type of company you own, it can speed up the checkout process and build an easy and efficient customer experience. Text message payments can also push shoppers through the sales funnel before they become disengaged.
Compared to mailed bills, emailed invoices, and other traditional methods of initiating payments, the SMS payment process can create faster results by meeting buyers through a more convenient platform. It can also broaden the number of payment methods you accept and empower your customers to use their mobile wallets.
For brick-and-mortar businesses, SMS payments allow your customers to skip the checkout line with just a few taps. You’ll also be better equipped to avoid counterfeit cash and fraudulent credit card payments, without manually verifying your customers’ identities or using money markers.
Once you’ve sealed the deal on a purchase, text payments allow you to seamlessly continue the conversation with your buyers and build customer loyalty. As a result, your average customer lifetime value may steadily rise along with your present profits.
When to use SMS payments
Businesses can take advantage of the perks of SMS payments in a variety of situations. Because texting is such a popular channel for today’s tech-savvy shoppers, it makes an obvious (and versatile) option for mobile payments. Below, we’ll describe a few situations in which SMS payments will become your business’s best friend.
1. Getting paid for your services
Customers can easily let an invoice slip past them if it’s sent through a more traditional channel. After all, not everyone gets through their inbox or checks their mailbox every day. By making SMS payments available, you drastically increase the odds that your customers get the message.
Once the buyer receives your text message, they can easily—and immediately—pay you, whether you just fixed their windshield, finished a logo design, or performed any other service. And they can do so from anywhere. Paying through text messages can be a cashless and card-less experience that leaves little reason for customers not to send what they owe quickly.
Your SMS payment system can also simplify recurring payments, including those for subscription services, phone bills, and various software.
2. Chasing a past-due bill
Your customers won’t always stay on top of their bills, even when they have the best of intentions. Sometimes, a little payment reminder is necessary to get them back on track.
Using an SMS payment solution, you can check in on your customer, send an invoice, and provide a link to a secure payment platform all through the same channel. If the buyer is having an issue that’s causing payment delay, they can simply respond, and you can showcase your stellar customer service skills without changing channels.
Podium Payments can help you keep track of multiple customer accounts, so you’re not scrambling to figure out who you need to follow up with.
3. Extending your SMS marketing efforts
If your company is already engaged in SMS marketing—which we highly recommend—text payments are a natural way to close out sales and make conversions happen faster.
For example, if a furniture store is answering a customer’s questions about a dining table’s measurements via text, they can offer to send an invoice as soon as the shopper confirms their interest. In this example, the store might be able to close the deal before the customer even shows up at their location.
SMS payments can be an extension of your ongoing relationship-building and customer service efforts, with the bonus of driving faster results for your bottom line.
Make texting your billing channel
With mobile phone users making up a huge fraction of American consumers, texting has become one of the easiest ways to reach your target audience. But while many of your competitors may be limiting their SMS use to marketing messages—if they’re even texting at all—you can provide a stand-out experience for your customers through SMS payments. With this payment option in place, you can simplify online and offline shopping for anyone with a smartphone.
As you start implementing a text message-based solution like Podium Payments into your business strategy, your marketing and payment processing efforts will meld together into one seamless experience. Learn how payment processes have evolved and get a demo of Podium’s platform to see how it can help your business grow.