How Text to Pay Gets Your Business Paid Faster and On-time

Learn How Businesses Get Paid Faster and More Frequently When Customers Pay by Text

Prompt payments are the lifeblood of many businesses and organizations. But getting paid on time with frequency can be a challenge.

In fact, late payments rose 32% in 2020, rendering many small businesses unable to pay suppliers or themselves.

But businesses and organizations are adding new technology to their invoicing strategies. This is helping them avoid invoicing mistakes and remind customers to pay.

They’re using text to pay.

The reason?

76% of customers prefer texting with businesses and text messages can get up to a 98% open rate.

Some small businesses are even reporting 80% reductions in their monthly accounts receivable because of text to pay and text message payment reminders.

But…

  • Why are payments by text on a mobile phone the next big thing?
  • What is text to pay?
  • What are the benefits of text to pay?
  • How does text to pay work?
  • How can your business use text to pay?
  • How to can you get set up for text to pay?

This article has answers to all of these questions. Read on for more.

Why Paying by Mobile Phone Is Here to Stay

Mobile phone payments have long been rising steadily and gaining in adoption. But the COVID-19 pandemic accelerated the adoption of mobile phone payments and forced more businesses to start going cashless.

Studies estimate that in 2020, about 40% of the US population with a smartphone had used a contactless or cashless payment more than once.

Several other factors contribute to this growth including:

  • Improved safety - cashless businesses reduce the risk of spreading germs and viruses (important since the pandemic).
  • Greater efficiency - cashless mobile payments make transactions faster and more efficient.
  • Reduced operating costs - cashless mobile payments reduce costs and overhead.
  • More customer convenience - customers prefer mobile payments vs. carrying physical cash.
  • Seamless payments - many mobile payments solutions offer seamless transactions

What is Text to Pay?

Text to pay or pay by text is a mobile payment solution that enables customers to make payments through a text message. Businesses often save customer payment information or link customers to payment portals with text to pay. So there’s often no need to type credit card information when completing a transaction over text.

Some text to pay even integrate directly with small business accounting software like QuickBooks Online, Xero, and FreshBooks.

This enables businesses and organizations to get customers to pay by text message. It also makes it easy to send text payment reminders, estimates, receipts, confirmations, and alerts.

Other text-to-pay platforms utilize text message automation. These automation features make it easy for businesses to send a payment reminder or text payment autoresponders to customers and clients.

Autoresponders are single-word responses. They often give customers the option to text back "YES" to complete a transaction or get more payment or account information.

How Text to Pay Works

Text to pay works much like any other text message. But it’s only offered by business text messaging services.
Many business text messaging services offer a wide range of features and integrations. These turn text to pay into a seamless payments experience for customers.

Most offer MMS picture messaging and limit messages to between 160 and 500 characters or less.

Others allow you to embed links in texts and integrate with accounting software. This helps to connect customers to web pages with more payments information and payment links.
How the text-to-pay process works:

  1. An estimate, invoice, or sales receipt gets generated from an accounting software or point of sale system.
  2. A business composes or automates a text message that contains sale information.
  3. A text gets sent from a business text messaging platform to the customer’s mobile phone or number on file.
  4. Alternatively, customers may text a business using a keyword like “PAYMENT” and receive a text message autoresponse that contains payment details.
  5. Once the customer receives the message, they can take action by clicking a link to a secure, mobile-friendly payment platform.
  6. The customer then enters their payment details and approves saving the card on file for future purchases.
  7. The customer completes the purchase using a payment gateway.
  8. Does payment card industry (PCI) compliance affect SMS payments?
  9. PCI compliance isn’t necessarily an issue for businesses that use a business text messaging service to accept payments.

This is because most transactions take place through secure third-party payment processors who are held to PCI compliance standards.

Most text-to-pay systems handle all transactions through third parties.

Top 6 Benefits of Text to Pay

1. Texting gets better engagement and response than email and voice

Text messaging is one of the most efficient and engaging ways to send out payment reminders. Of course, there’s debate about whether email, voice, or text messaging is best.

But we believe it takes multiple messaging channels and a truly conversational messaging strategy to serve customers.

For proof, remember that text messaging has up to a 98% open rate. That’s higher than any other form of communication, including email at around 20%.

And high open rates are also why texting is 7 times more likely to get a response.

As far as calling for payment reminders, consider that 76% of customers don’t like talking to businesses on the phone. And that 1 in 4 customers won’t listen to voicemails from unknown callers.

Suggested Article: Top 10 Advantages and Benefits of Texting

2. Text to pay saves time with automation and reduces friction in your payments and invoicing process

Gone are the days of sending separate emails and multiple invoices to collect payment from customers.

Text to Pay comes with automated text reminders and other built-in options that nudge customers to pay immediately. It effectively streamlines the payment process and allows even the smallest businesses to automate their payment collection.

It’s why small businesses like Ace Sanitation are seeing 80% reductions in their monthly accounts receivable.

Ideally, clients can access and confirm or deny the payment with a few taps on their smartphones.

Suggested Article: Guide to Text Message Automation

3. Text to pay enhances efficiency - especially when integrated with small business accounting software

Text-to-pay integrations, along with automation, can increase your payments and invoicing efficiency.

Already using a small business accounting software like QuickBooks Online or Xero? Then you’ll want to check out their integrations with business text messaging platforms.

The QuickBooks Online App Store and Xero App Marketplace are great places to start. There you can see if any of your existing tools have a native integration.

Suggested Article: Ultimate Guide to QuickBooks Online Invoicing

4. Customers find text to pay convent and easy - increasing payment rates

With text to pay, your customers won't need to call you to make a payment or pay online.

Ideally, mobile payment occurs in your customers’ messaging app. It makes it easy for both parties to follow text conversions and make reference to them.

There’s no need to ask for passwords and other crucial details. SMS payments require customers to simply respond via text to pay with their card on file.

4. Text to pay gives you enhanced safety and security

In a post-pandemic age, text to pay is ideal because it doesn’t require contact. Text to pay helps also keeps you from having to carry cash, which can increase security risks.

SMS payments are also secure and PCI compliant. With these payment methods, you reduced your risk of fraud.

5. Text messaging can help build customer loyalty and foster repeat business

Text messaging offers your business a new way to keep connected to customers. It also provides several opportunities to earn their trust, loyalty, repeat business, and even referrals.

Not only can you automate your payment collection process with text messaging. You can also automate how you ask for feedback and collect reviews.

Many small businesses thrive based on their online reputations and how many positive Google reviews they have.

After each successful payment, you can use text messages to ask happy customers for a review.

Suggested Article: The Ultimate Guide to Google Reviews

Text to Pay and Payment Reminder Text Message Samples

Hi {{ FirstName }} thanks for using {{ OrganizationName }}. We know we have a choice and appreciate your business. Here’s a link to your payment request for {{ InvoiceAmount }} due on {{ PaymentDueDate }}: [ invoice link ]. Feel free to review our services on Google: [ Google Reviews link ]

Hi {{ FirstName }}, It’s {{ OrganizationName }}. This is a reminder that your credit card on file will be charged for the amount due on 3/25 for your monthly renewal. If you have any questions, please reply via text or call us at {{ OrganizationPhone }}

“Your invoice’s due date is 5 o’clock today. Please feel free to pay via check in person, or pay via this link: http://msgdsk.io/l/w/ev7JhUol”

“Your have an outstanding payment with us, please pay as soon as possible to avoid additional late fees and service charges.”

“An overdue payment has been on your account for longer than 10 business days. If not paid within 24 hours, a collections agency will be assigned to collect the outstanding balance.”

3 Steps for Getting Your Business Set Up for Text to Pay

The following are a few steps to consider when getting set up for a text service that offers text to pay.

1. Choose a business text messaging service

Your first step is choosing a business text messaging service. Obviously, you’ll want one that supports text to pay and can accommodate your messaging and transaction volume.

There are many factors to consider when looking for a business text messaging platform. We discuss them in the following article.

Suggested Article: How to Choose a Business Text Messaging Service

2. Create an account and set up integrations

Next, you’ll want to provision a local 10-digit phone number and format your contact lists.

Next, you’ll want to sync your payment and invoice information from your accounting platform.

This can help you leverage reporting and analytics tools to measure crucial metrics such as monthly accounts receivable.

3. Map your payment reminder workflows

Depending on your business texting platform, you’ll have various ways to set up automation, workflows and send a text.

Your workflows will largely depend on the type of product or service you offer and what your payment terms are. Many businesses operate using net 30 payment terms. This means that a payment is due within 30 days of the product or service being rendered.

Regardless, your payments workflow should suit the daily operations of your business.

Suggested Article: Small Business Invoicing Guide

Final Thoughts

Ready to start getting paid on time? MessageDesk is here to help with smarter, simpler ways to send payment reminders and get paid faster.

Feel free to start a 7-day free MessageDesk trial or schedule a demo with a messaging expert.

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