Text To Pay: Is It the Next-Gen Payment Solution for Businesses?

Text To Pay - Next-Gen Payment Solution

Many first-time business owners tend to assume that accepting any type of payment from customers is a good idea. After all, regardless of the method, you still get paid. However, startups must understand that this also sets a dangerous precedent, especially since some methods aren’t valuable enough to take the risks that they carry. For starters, as it is now, accepting cryptocurrency as a payment adds an unnecessary risk to your small business. In other words, you shouldn’t jump on the wagon too early whenever a new payment method is introduced, and that’s probably why you’re here.

As you may already know, numerous organizations are starting yet another trend concerning a new payment method that they call text to pay or SMS payments, assuming that it’ll be the next-gen payment solution for businesses. Is it true? Should you start using it as well? To answer these questions, this article will guide you through the advantages of text to pay to customers and businesses. But before that, you have to understand how SMS payments work first.

How Does It Work?

While the name ‘text to pay’ sounds simple enough, there’s much more going on around this payment method. As the name suggests, with this payment model, customers are required to send a text message to your business if they want to purchase an item or a service. This text message is then sent to mobile payment providers, which would differ depending on what company you’re working with.

Once the customer has confirmed their purchase, it’ll add the price to their monthly phone bill, or if they have a prepaid balance, it’ll be reduced from their balance instead. From this explanation alone, you should be able to make some guesses on its potential advantages to customers.

Advantages Of Text To Pay For Customers

From the many payment options available to customers, the text to pay model is perhaps one the most loved method among customers, and for many reasons:

Quick and Easy

Perhaps the most apparent advantage of using text to pay for customers is that it’s quick and easy to use. Considering how most SMS payment models typically require customers to send messages like YES or NO, it only takes a few seconds of their time to confirm a purchase.

Convenient

Since the purchase cost is counted onto their remaining balance or bill, customers no longer have to enter their bank details or credit card number for every purchase. They don’t even need to have a bank account. Furthermore, unless the customer is currently situated in a place with no reception, their confirmation should push through most of the time, as opposed to other payment methods that require the internet.

Secure

Trojans, viruses, phishing, and denial of service attacks are some of the most common threats on the internet. While there are ways to protect oneself from these threats, it doesn’t completely eliminate the possibility of cyberattacks. However, since text to pay transactions lack any connection to the internet, these ‘threats’ are no longer a threat.

text to pay

Advantages Of Text To Pay For Businesses

Of course, text to pay doesn’t only cater to customers. It also carries numerous benefits for businesses that deal with commercial transactions. Here are a few examples:

Numerous Options

Due to the growing popularity of the text-to-pay model, more and more agencies are offering to set up the model for startups. Hence, you have several options to choose from if you ever decide to implement text to pay for your business.

Seamless Implementation

Unlike many other payment methods, implementing a text-to-pay system is relatively easy, especially since your provider deals with most transactions.

SMS Marketing Integration

Businesses already using SMS marketing tactics can benefit significantly from text to pay by integrating discounts and coupons, thereby building customer loyalty.

Efficient

Text messages have the highest open rate among the many channels of a business. For your reference, SMS has a 98% open rate, while emails have a 20%. This would mean that your customers are less likely to forget about their purchase, which is a surprisingly common occurrence. 

Presents New Opportunities

Not every person has a credit card or a bank account, but that doesn’t mean they can’t be one of your customers. Since text to pay doesn’t require these two essentials, you’re essentially opening up your business to millions of prospective customers.

How Can You Set It Up?

Before you can accept payments thru text from customers, you must first set up an account on a company that enables SMS payments. You have several options for this, considering how the payment model is becoming more popular. Once you create a partnership with a company, there’s nothing else for you to do. Of course, you have to pay for the service. There should be a monthly fee in addition to the fee for every payment your business accepts.

Wrapping Up

Text to pay is just one of the many payment solutions available for businesses. Although it certainly has its charms, it would barely work as a standalone payment method for businesses, let alone a startup. Hence, your best bet is to incorporate the text-to-pay model into other payment methods, such as digital payments, credit cards, and more.