SMS payments: what are they and what are the benefits for businesses?

As a business, the easier you can make it for your customers to pay the better. And what could be easier and more convenient than paying through your mobile phone?

SMS payments benefit merchants and consumers alike. Merchants have a quick, efficient, and highly accessible way to accept payments, and consumers can avoid much of the friction that comes from other payment methods.

Although offering SMS payments can provide convenience and speed to customers, it is crucial for merchants to ensure that these transactions are secure. With the recent surge of Whatsapp scams and the like, it is essential for merchants to educate their customers on how to identify legitimate SMS payment requests and to avoid scams.

With that in mind, let’s explore ways merchants can offer text to pay and what the benefits are.

What is text to pay?

Text to pay, also known as payment links, is a mobile payment functionality that enables merchants to accept payments from their customers via a link in an SMS message.

You can use SMS payments to collect both recurring and one-off payments. For recurring payments you need to enter into a contract by ticking a box and then you get a link that takes you to a payment screen.

How do SMS payments work?

One of the most convenient SMS payment options for both merchants and consumers is payment links. Here’s how text payment links work:

• You build links for individual or multiple customers, and determine exactly how long the link is valid for before expiry
• Your customer opts in to SMS prompts
• You send an SMS message to your customer containing a payment link
• They open it and click ‘pay’ to be redirected to a mobile-friendly payment page
• They enter their card or wallet details or other payment method to complete the transaction and can choose to save their card details to make future payments even easier
• They’ll receive either a text confirming that their payment has been successful or they get redirected to a confirmation page from the payment links page.

Benefits of text to pay for businesses

Here are the key benefits of text to pay for businesses:

• Reduce friction - SMS payment links deliver maximum convenience for your customers by giving the option to pay when, where and how they want. As simple as responding to a message with a few taps on their phone, and with no need to login to anything or enter details, text to pay reduces many of the pain points that can cause customers to abandon a purchase
• Accessible and efficient - on top of that, 85% of US adults own a smartphone and SMS messages have an open rate of 98%, making text to pay a highly efficient and accessible payment option for both you and your customers, and far more likely to be seen than an email pay prompt. In some cases, like PayTM in India a mobile phone number is used instead of a bank account.
• Unlock new channels - text to pay is one of the easiest ways for merchants to accept payments without even having to set up a website
• Secure - compliant with PCI DSS and can be protected with 3D Secure authentication
• Reduce admin - text to pay takes a lot of the manual work out of collecting payments unless you have an API set up to create automated links. At Checkout we offer two modes of payment links: Creating them in dashboards or automated links via API.
• Supports multiple payment options - depending on which provider you use, SMS payments can be used for card, ACH, and digital wallet payments

Use payment links from Checkout.com to process payments via SMS

With Checkout.com payment links, you can accept payments through any channel or device, including SMS, and we’ll do the heavy lifting.

Payment links are completely hosted by Checkout.com, so all you need to do is to request the data you need to set up the API. Finally, you and your customer will receive confirmation that the payment has been successful.