SMS Payments

With the recent turn of events, many alternate payment channels like e-wallets and mobile payments have cropped up in respect to financial transactions. Till now you could transfer funds through the various apps from your phone to a bank account, another mobile number, or any service provider. However, now you can do financial transactions from your mobile through just an SMS.

SMS payments have hence become the easiest ways to transfer funds. Although, there are many beneficial factors of SMS payments, one of them is that the users dont even need to have a bank account to avail the SMS payment service. Lets find out how can SMS payments be used for transactions.

How to use SMS Payments

Follow the steps below to know how to transfer funds using SMS service:

1. Share your mobile number with the receiver
2. The receiver will send you a text containing his name and the payable amount
3. You can authorize the payment either by entering the payable amount or the alphanumeric code you have received
4. The money will be credited to the receivers account

The payable amount is deducted from the user's pre-paid balance in the mobile number and credited to the merchants mobile balance. If the user has a postpaid number, the due amount would be added to his next billing statement.

Benefits of SMS payments to users

The SMS payments service can hence be used by those users also who do not have smartphones and cannot use the various payment apps. Considering that the user does not need a bank account to use the SMS payment service, it is a boon for the unbanked people in the remote areas and villages.

SMS payments are proving to be a more secure, safe, and less-time consuming payment channel. The user is not required to have a credit/debit card and remember the card details to make payments, and hence the card details are unknown to everybody else. Also, there is no scope of fraudulent activities, as the user does not share any detail with the merchant, but just his mobile number.

How SMS payments are beneficial for businesses/merchants

The SMS payment service is equally beneficial for the merchants as it is for the users. The merchants can now deal with anyone who has a mobile, whether basic or a smartphone. Also, big merchants can expand their services to other small retailers or vendors who do not have bank accounts or credit/debit cards but have mobile handsets.

There is no need for the merchants to keep a record of their customers identity or worry about selling goods on credit. Even if the customer does not have cash, the merchants can ask for an SMS payment. And the best part is that there is no cost involved in the setup or the usage of the SMS payment service.

Further, the user does not require an internet connection also, to transfer funds using SMS payments, as the transactions take place through the services of the mobile operator. Hence, making and accepting payments can be done not just in person but from anywhere in the world.

Though there are a plethora of mobile payment options available, SMS payments can be said to be the easiest of them all. Today, when mobile has become a basic necessity, SMS payment service will work as a revolution, as the funds are transferred through the basic texting service.