Text-to-Pay: A Complete Guide to SMS Payments

Text-to-pay payments have become one of the growing alternatives for making payments in business transactions. As a result, small and medium-scale businesses should consider this a viable option to accept payments. This article will focus on what SMS payments are, how they work, and what are the benefits to merchants who employ them in their overall payment strategy.

What is a SMS Payment?

SMS (Short Messaging Service) or text-to-pay are payments made through text messages. An SMS payment is when a customer sends a payment via text or when a business sends a purchase invoice to the customer by text.

In text-to-pay payments, a link is attached to the message. This link redirects to a payment form where the transaction details are entered and confirmed. The process is secure, user-friendly, and makes purchases convenient for both the buyer and the seller. It is basically a contactless payment procedure.

How Do SMS Payments Work?

Merchants can work with their current payment processor or a standalone SMS provider to retain these types of payments. Although these providers may operate differently, there are some basic procedures that every business should expect from a typical SMS payment process:

  1. To start an SMS payment system, the business needs to enable the SMS payment option with an SMS payment service provider. The SMS payment service providers integrate messaging with the payment-compliant feature.
  2. The business texts a short code number to the customer’s phone number. The code contains a link that shows the purchase invoice.
  3. The link redirects to a secured payment system where the customer can fill the required details and finalize the sale procedure.
  4. The customer approves the payment. They can also save their debit card information to ease subsequent payments.
  5. Depending on the SMS payment service provider, the customer may receive a unique code to complete the procedure.

How Does Text-To-Pay Benefit Merchants?

  • Devices are SMS-Enabled – Virtually every phone has access to mobile text messaging feature which means reaching more customers.
  • Multiple Payment Types – With SMS payments, merchants can offer more payment options based on what the business requires or what the customer wants (credit, debit, ACH, digital wallet).
  • Payment Speed – Text messaging is immediate which shortens invoice payment times and queues.
  • Contactless Payment – Pay-by-text allows buyers to order and make payments online and then receive the package at their doorstep. No contact necessary.
  • Limits Fraud – Payments are sent virtually through a secured channel, preventing fraudulent transactions.
  • No Need for Hardware – SMS payments can be initiated from anywhere. There is no need for any hardware purchasing instrument like POS.

Learn More About Axia’s Payment Solutions:

Contact us online or call 1-877-875-6114 x3.

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