Due to the COVID-19 pandemic there have been worldwide changes when it comes to transactions. The digital age pulled through in ensuring that both businesses and consumers have ways in which to transact safely, without too much contact between them.
Digital Payments, while already existing worldwide, were suddenly thrust into the limelight as the world battled with lockdowns and strict curfews. Online payments using debit and credit cards, bank transfers, direct debits, e-wallets, payment links, were among the few that suddenly became the go to payment option for everyone.
SMS Payment is one form of digital payment that increased in usage during the past years. But what is it and what is it all about?
SMS PAYMENT Systems
SMS stands for Short Messaging Services, or most popularly known as text messaging. People usually use this service to send messages or talk to other people using their mobile gadgets. But did you know that today, SMS can now be used as a means to send and receive payments?
Through the SMS Payment system, purchasers need only send a text message in order to send payments for various transactions, this also allows businesses to receive payments from their clients or customers that they have currently transacted with. Using SMS Payment systems will ensure both the customer and business that the transactions are quick, easy, and safe. Additionally, SMS Payment systems can be used for deposits and remittances.
Through this type of payment channel, the customer is able to send their payment when the business or merchant sends through text message to a customer the invoice, and they respond by either a reply to the text message, or clicking on a link that then sends transaction information to the business or merchant’s payment processing gateway.
How the SMS Payment System works
It is actually a pretty straightforward process. And while there can be variations with each business or merchant that offers an SMS Payment system, generally, these are what one would usually expect as one of the elements of this kind of system:
- A business or a merchant will send a text message to the customer’s phone number, or it is the customer who sends one first and this officially initiates the sale transaction.
- The business will then send a link to the customer to a secure, easy and quick payment form.
- The customer or client fills up the payment information given to them. Through this stage, the customer or client can choose to have their information saved on file should there be other future payments.
- The customer gets a unique code sent to their number and gives it to the business. The transaction will push through in a matter of seconds.
While the exact process will vary depending on the business and phone company they use, there will be similarities in the steps provided above.
How can SMS Payment help a business?
There are several ways that SMS Payments can help a business, here are several of them:
- Using SMS Payments widens the reach of the business in terms of payments; it can now receive worldwide payments from customers able to text worldwide.
- The business can receive payments from customers who do not have bank accounts, credit cards, or any other means of digital payment like an e-wallet. This actually presents the business to a whole new set of customers or clients.
- This is also one way of being able to build customer loyalty through SMS Marketing messages, coupons, and offers.
- The business on the receiving end need not verify the identities of the customers or worry about the customers cards being denied.
- The billing is handled directly by the phone company the business is using.
- It is quite easy to set up and often costs a minimal amount.
For businesses, the main advantage of SMS Payment is that it is easy, quick, and secure. This is also a good way to invest in the business without costing too much money from its cash flow.