Text messaging is one of the best ways for merchants to engage with consumers. Mobile devices are an integral part of everyday life; most people have their phones with them 24/7.
Studies have shown that 93% of consumers in the U.S. are either interested in or have opted to receive texts from at least one brand. Those messages contain everything from new product and service announcements to promotions and mobile ordering options. With a high average open rate, text messaging is changing how businesses interact with customers - and how merchants request payments.
Text to pay solution provider Authvia reports that consumers open 95% of texts within three minutes of receipt. They also found that 83% of customers want to use their smartphones or other online methods to make payments.
These trends have set the stage for increasing text to pay adoption, but are you and your merchants ready?
How Does Text to Pay Work?
Text to pay is a solution that allows merchants to request payment by text. After sending a request, the recipient simply clicks a secure link and pays through their mobile device.
In addition to meeting the need for a more convenient merchant-consumer interaction, this technology is becoming more popular because of its simplicity. All a merchant needs to do to initiate a payment is:
- Visit their merchant portal
- Fill in the customer’s name, contact information and payment amount
- Add a short note
- Hit “send” to request payment
After completing the request, the solution will send an SMS containing a secure payment link to the end customer, who can pay on their mobile device. Text to pay provides a more convenient way to send and receive payments - improving your invoice payment rates and enhancing the customer experience.
Why Do Consumers Want Text to Pay?
Consumers expect payment options that are fast and easy to use. Our 2022 consumer survey found that 84% of consumers cite convenience as their top priority when choosing a payment method, and about half say transaction speed is essential. Text to pay meets both of these expectations.
Statista reports that the contactless payment market’s revenue in the U.S. has grown from $63 billion in 2019 to $199 billion in 2023 and will likely reach $358 billion by 2025. With text to pay, there is no contact. Instead, the merchant sends a request, and the consumer pays on their phone - even if they’re shopping in-store. Paying by text allows merchants to create secure, touchless, healthier payment experiences.
This functionality meets consumer demands for fast, simple and convenient contactless payments. It is quickly becoming table stakes for merchants and payment providers who want to deliver a competitive payment experience.
Top 5 Benefits of Text to Pay
While offering this payment method helps meet consumer expectations for payment experiences, it also has other benefits for merchants and their payments providers, including:
- Customer-Centric and Accessible Payments: With text to pay, consumers can make purchases even if they don’t have payment cards or cash on hand. It also improves accessibility for those who require alternative means of payment, leading to increased revenue for merchants and a more convenient customer experience.
- Mobile-Friendly Transactions: Text payments allow consumers to pay with their smartphones rather than using a payment terminal or device they aren’t as comfortable with.
- Enhanced Operational Efficiency: This technology allows you to streamline the checkout process, reducing the time and effort needed to complete a transaction. Merchants offering services or subscriptions can also automate invoicing with texts, saving time and improving cash flow.
- Fewer Late Payments: According to the U.S. Chamber of Commerce, pay by text solutions effectively minimize past-due payments and offer up to a 40% conversion rate for overdue bills.
- Payment Data Security: The best solutions comply with all Payment Card Industry (PCI) security standards. They use tokenization (which replaces card data with random alphanumeric characters) and encryption (which uses cryptography rather than human-readable data) to ensure transactions are secure. With this solution, consumers don’t have to enter a PIN, and merchants have less cash to handle - eliminating unnecessary risks to everyone in the payments chain.
NMI Partners With Authvia to Bring TXT2PAY® Solution to Merchants
To help you meet ever-evolving demands for payment choice and convenience, NMI and Authvia® have partnered to bring text to pay capabilities to you and your clients. With TXT2PAY®, you’ll find new opportunities to expand payments functionality for your current clients and make inroads in new, unique markets.