How to Enable Secure SMS Payments for Your Customers

Mobile phones have arguably become peoples’ de facto devices for handling everything in their business and personal lives. Approximately 96 percent of Americans and 94 percent of UK citizens own cell phones. In addition to communicating with friends and family, checking emails and a multitude of other activities, consumers are increasingly using their mobile phones for making purchases, paying bills and sending money to others. Allied Market Research estimates the mobile payment market will grow at a CAGR of 33.8 percent from 2017 to 2023, reaching a market size of $4.6 trillion. This market includes different modes of transaction for mobile payments, but the most popular is short message service (SMS), also known more simply as texting.

SMS payments are consumers’ increasingly preferred method of making mobile payments because they are fast, simple and familiar. All one needs is a smartphone with SMS capabilities, which most people already own and carry with them nearly all the time. And users are clearly very familiar with texting – it’s estimated that 15,220,700 texts are sent every minute. As the mobile channel continues to play a growing role in all our lives, businesses should look to take advantage of this direct communications channel with their customers to enable fast, secure and Payment Card Industry Data Security Standard (PCI DSS) compliant payments through SMS.    

Benefits of SMS Payments

Some of the biggest benefits of enabling SMS payments for customers include the speed, ease-of-use and high engagement rates of the SMS channel. Billions of mobile phones around the world are already equipped with SMS functionality. Texting is nearly instantaneous and has been around for a long time, so consumers are comfortable with it. More importantly, SMS boasts much higher rates of engagement than other marketing communications channels: 99 percent of SMS text messages are opened by their recipients – far surpassing open rates for email.

Additionally, by using the SMS channel for payments, there are no logins or passwords for the customer to remember, unlike when using a third-party payment platform. There is also no need for the customer to download applications or use dongles or other special equipment – businesses can securely accept payments from customers by using a simple, secure hyperlink sent to their customers in a text message.

How it Works

Semafone’s Cardprotect Relay+™ enables businesses to easily and securely accept PCI DSS compliant payments through the SMS channel. Businesses use the cloud-based solution to generate a secure payment hyperlink, which they send to the customer via SMS. The customer simply taps the link in their text message and is presented with a secure payment page. They input their payment card details into the appropriate fields for a secure payment process that takes just seconds to complete. Their sensitive payment data and personally identifiable information (PII) is encrypted and routed directly to the payment service provider (PSP) and never enters the merchant businesses’ network infrastructure.

While the customer is inputting their payment information, real-time progress updates are relayed to the merchant business, enabling the merchant to see when the link is opened, when payment information has been inputted, and whether the payment was successfully processed by the PSP. These progress updates provide the business with meaningful insights on not only the status of payments collected, but also the effectiveness of mobile marketing campaigns by seeing which messages result in the most conversions or where in the process customers drop out.

As a cloud-based solution leveraging the already ubiquitous and familiar SMS communications channel, Cardprotect Relay+ is easy for businesses of all sizes and in any industry to deploy, integrating easily with third-party applications. Using SMS, there is no need for businesses to invest in costly hardware, complicated m-commerce platforms or to be locked into closed payment ecosystems.

Reduce Risk and Simplify PCI DSS Compliance

By keeping sensitive payment data out of the businesses’ network infrastructure to begin with, Cardprotect Relay+ helps reduce an organization’s risk of suffering a data breach. Cyber criminals and fraudsters can’t hack what you don’t hold… when there is no payment data being processed or stored, the organization becomes less of a target for nefarious people.

As an added benefit, because the sensitive payment card data never touches the business infrastructure, Cardprotect Relay+ helps dramatically reduce the time, cost and complexity associated with complying with the PCI DSS by reducing the cardholder data environment (CDE) and keeping the SMS channel out of the scope of compliance.

Increase Profits with SMS Payments

In addition to the data security and PCI DSS compliance benefits, enabling payments and purchases through the SMS channel can also help an organization improve customer loyalty and increase revenue. Organizations can include secure payment hyperlinks in their SMS marketing campaigns, and payment reminders for direct calls-to-action that invite the customer to act immediately – by clicking the link for a seamless payment or purchase experience. There is no need to send the customer to another channel or redirect them to another platform.

Meeting customers in the channel of their choice and providing a superior, mobile payments experience leads to increased customer satisfaction and can boost growth and profitability. For example, research from the Electronic Transactions Association showed that digital payments acceptance costs small to medium sized businesses (SMBs) 57 percent less than accepting other payment types such as cash or checks. Accepting digital payments not only enables these businesses to reduce operating costs, but also allows them to be more competitive and boost sales through enhanced marketing and customer experience capabilities.

Mobile Payments are the Future of Business

As consumers increasingly rely on their mobile phones for both their personal and professional transactions, the variety and availability of mobile payments options will continue to grow. There are no signs of slowing when it comes to mobile commerce. Businesses of all sizes and across all industries can position themselves for continued success and further growth by enabling secure, easy and PCI DSS compliant SMS payments in the mobile channel. Doing so will not only reduce operational costs and increase revenue opportunities, but also deliver a superior customer experience for today’s digital-first, smartphone-loving consumers.  

How to Enable Secure SMS Payments for Your Customers
Semafone