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How to Accept Mobile Payments via SMS

Updated Jul 31, 2023

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SMS stands for Short Message Service; it’s commonly known as text messaging. SMS payments are when a buyer sends you a text message to make a purchase, or you send an invoice by text to a customer. The message contains a link to a secure payment form where the customer can enter payment account information and confirm the purchase. If your business is interested in accepting SMS payments, here’s what you need to know to get started. 

How do SMS payments work? 

SMS payments are one way to use SMS in business. They’re a form of contactless payment, so anyone with a text-enabled phone can make an SMS payment to a business. 

If your company wants to start accepting SMS payments, you’ll need an SMS payment provider. SMS payment providers enable SMS payments by integrating messaging with secure, PCI-compliant payment processing functionality. 

Some SMS payment providers are also credit card processors or facilitators, while others are purely SMS payment providers. If you’re already working with a credit card payment facilitator, check to see if it has an affiliated payment provider – this will provide the easiest integration. Otherwise, a stand-alone SMS payment provider will work just as well.

TipBottom line

If your business needs to find a credit card processor, check out our reviews of the best credit card processors so you can work with one that fits both your needs and budget.

How to start accepting SMS payments

Your first and most important step to start offering SMS payments as an alternative payment method is to select an SMS payment provider that is right for your business. Check with your credit card facilitator to see if it offers SMS payment processing, and compare the features and costs of other SMS payment providers.

After choosing an SMS payment provider, work with the company to select the right plan based on your anticipated SMS volume. Once you’ve done that, you can set up billing with the company, set up your account and possibly get a third-party merchant account – if needed. There are several highly rated merchant account services from which to choose.

You’ll connect your customer database with the provider, create rules about who you’ll contact and when you’ll contact them and create your basic text messages to send out for various payment situations. 

The provider will typically give you the choice of using your current business phone number or a virtual SMS number with which to receive payments.

How to choose an SMS payment solution

All SMS payment providers should showcase data security and be PCI compliant. Beyond those basics, here are some other features to look for:

  1. Intuitive interface: You should be able to set up your message content, reply logic and other settings individually. An easy interface gives you control over your information and the agility to make changes without incurring service charges.
  2. Easy transactions: When customers can save their payment information for future payments, it’s more convenient for them and increases sales.
  3. Backup system: Fail-overs are backup communication options – such as a voice phone number or email – if the payment doesn’t go through.
  4. Two-way SMS: With this option, you can set up automated SMS replies triggered by chosen keywords to give more information or give customers the option to speak to an agent.
  5. Quality connection: High-quality carrier connections will help ensure that your SMS messages get through and aren’t caught by telecom company filters.
  6. Dedicated number: Your business should get a unique phone number, not a shared or random number. A dedicated number improves deliverability and customer confidence that a phishing attempt isn’t targeting them.
  7. Lump-sum deposits: Transactions are deposited in a lump sum, which makes it easy to reconcile your books.
  8. Affordable prices: Some SMS payment providers charge by the number of individual SMS messages you send or by text conversation. Others charge by the range of SMS messages you send. If customers tend to pay quickly when they get the first text, an individual plan will likely be the least expensive. If they take longer to pay, the conversation or ticket method will be more affordable. If you intend to send out a high volume of SMS payment messages, bulk or range pricing will be your best bet.

Top SMS payment solutions for 2021

Here’s a look at some of the most popular and well-regarded SMS payment solutions, along with their fees, pros and cons. 

Relay (formerly Rhombus)

Based on the number of SMS messages sent and number of closed tickets or finished conversations:

  • 250 tickets + 1,000 SMS: $50 per month
  • 1,000 tickets + 3,000 SMS: $150 per month
  • 5,000 tickets + 7,000 SMS: $350 per month
  • Transaction fee: 2.9% + $0.30
  • Doesn’t require a separate merchant account
  • Integration with Stripe
  • Strong marketing tools
  • Versatile tools
  • Monthly fee
  • Not suitable for high-risk businesses
  • Expensive for low-volume businesses

Monthly fee of $15, $49 or $99, depending on the plan

Transaction fees:

  • Email payment requests: $0.02
  • SMS payment requests: $0.03
  • MMS payment requests: $0.05
  • All transactions: $0.20
  • QR codes for customer-initiated sales
  • Potential POS replacement
  • Individual pricing suitable for lower-volume businesses
  • Recurring billing and bulk payment requests only available on higher plans
  • Separate payment processing service required
  • Monthly fee
Payment SavvyPricing not disclosed
  • Good for high-risk businesses
  • Wide variety of payment types accepted
  • Option to offer full pay by text or just payment reminders
  • Opaque pricing
  • Few user reviews
TipBottom line

When you have a product that’s in high demand because it’s new, innovative, or on sale, text customers a QR code so they can reserve the product, or give them a short code to text you. This will prompt your SMS payment solution provider to reply with a text payment link to complete the sale.

How do SMS payments work?

While there is some variation among providers, here is how SMS payments usually work: 

  1. The customer opts to receive text messages from your company.
  2. You initiate a text to the customer using the SMS payment solution provider’s system and a different phone number the SMS company provides distinct from your primary business phone number.
  3. Alternatively, the customer can initiate the sale by texting a short code number or QR code to your business. You would then reply with a link to the payment page.
  4. The buyer receives the text and selects the link.
  5. The link opens a secure, mobile-friendly payment page on the consumer’s mobile device.
  6. The customer inputs payment information or authorizes your company to use the payment method already on file. There is usually an option for the consumer to approve saving the payment method for future payments.
  7. Sometimes, the SMS provider will send the customer a unique code or an additional text confirming the intent to buy before finalizing the purchase.
  8. The SMS payment provider processes the payment and sends the money – minus any fees – to your business.
FYIDid you know

It’s important that your customer opts to receive text messages from your business, helping you adhere to text messaging laws. Without a customer’s consent to receive your texts, you could face fines and penalties for messaging them.

How to use SMS for payments and communication

It’s ideal to initiate SMS payments either when a sale is made or after the fact. If you’re selling a service, you can immediately invoice via SMS and get paid while you’re with the customer – either at a brick-and-mortar store, an event or the customer’s location.

You can also use SMS to follow up on other forms of communication – such as mail or email – about collecting past-due invoices. Texts are harder to ignore or miss than other kinds of communication; and since the message comes on a mobile device, it’s more convenient to pay from a phone than to write a check. When it’s easier for a customer to pay, you’re more likely to get paid in a timely manner. 

If your company is already using SMS marketing, adding SMS payment options can help you close more sales. If you’re already in a conversation with a customer over text, and the customer expresses interest in buying a specific product or service, you can send an SMS invoice for that product.

Did You Know?Did you know

SMS marketing and mobile marketing are different: SMS marketing sends promotional materials via text, while mobile marketing is a multichannel digital marketing strategy.

Advantages of SMS payment systems for businesses

There are a variety of reasons why you may consider using SMS payment systems. Here are a few popular upsides to SMS payments:

  • Everyone can receive texts. In 2021, 98% of adults in the United States have access to a mobile device with text-messaging services.
  • Text messages are opened and read quickly. Ninety-five percent of text messages are read and answered within three minutes.
  • Payment is fast. Fast payments make your business more efficient, creating better customer satisfaction – especially if you have customers waiting to pay.
  • Disbursement is contactless. Contactless payments have become more popular since the coronavirus pandemic, as consumers want to minimize physical contact.
  • Invoices are rendered quickly. When you send bills and invoices via SMS, its immediacy and convenience can result in more money being collected in a shorter time frame.
  • Fraud is less frequent. Using SMS payments reduces losses from counterfeit cash and fraudulent credit card payments.
  • Multiple payment types are supported. Most SMS payment providers accept various payment types – including credit and debit cards, ACH payments, and digital wallet payments like Apple Pay, PayPal and Google Pay.
  • No POS hardware is required. This payment type eliminates the need to purchase hardware; however, if you already have POS hardware, you are likely to still need it for some time.
Did You Know?Did you know

There are various digital wallet options, including Apple Pay, Google Pay and Samsung Pay.

Implementing SMS payments is one of the best ways to use business texting, especially if you find an SMS payment provider that works with your budget and helps you connect with customers. With millions of smartphones and mobile devices out there, SMS payments are an excellent way to grow your business and foster customer loyalty.

Jennifer Dublino
Contributing Writer at
Jennifer Dublino is a prolific researcher, writer, and editor, specializing in topical, engaging, and informative content. She has written numerous e-books, slideshows, websites, landing pages, sales pages, email campaigns, blog posts, press releases and thought leadership articles. Topics include consumer financial services, home buying and finance, general business topics, health and wellness, neuroscience and neuromarketing, and B2B industrial products.
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