A young woman pays by premium SMS on her mobile phone

Picture this scenario: Company A sends out a text blast to customers offering a new subscription service. The text includes a link to a webpage where customers can sign up and pay online. Customer A, and many others like her, is interested in the subscription but has a busy day ahead of her. She closes the text, for now, with every intention of coming back to it later to finish the process. But, by the end of the day, she’s forgotten all about it.

Company B sends out a similar text blast, but instead of linking out to a form to fill out, they offer customers the option of paying quickly, easily, and securely via text. Customer B, and many others like him, eagerly opts-in and takes care of it right away because the process feels fast and easy and can be dealt with right from within the text. 

This is the difference between standard SMS and premium SMS (PSMS). While there’s a time and a place for each, the option to pay by premium SMS can be quite an effective customer engagement tool when used properly.

So, Can You Pay By Premium SMS?

Yes, the option to pay by premium SMS is still a valid one, and in some cases, preferable. If you’re still a little vague on the difference between standard SMS and PSMS, here’s a quick breakdown:

Standard SMS marketing messages work just like any other text. They incur no extra fees, to the sender or to the recipients, beyond what they would normally pay for a text based on whatever phone plan they have.

Premium SMS messages are SMS messages that allow for monetary transactions between sender and recipient. Customers opt-in to pay for premium content or other special offers via text, and can opt back out at any time via text as well. 

Aside from the transactional aspect, PSMS “text to pay” messages work much the same way as regular SMS messages but with the bonus of an incredibly convenient payment method—should the offer you wish to send require one. The user’s mobile phone carrier handles the billing and distribution of payments to your company after they are collected and processed.

Keep in mind, however, that there are some legal limits to what you can use PSMS for. Cannabis and firearms, for example, are among those products your customers cannot pay for by premium SMS. If you have any reason to doubt whether you can use PSMS for a given promotion, be sure to check federal and state laws. If you work with a text marketing service provider, you should also be able to check in with them and rely on their expert guidance regarding cellular compliance.

Can you use PSMS for sweepstakes offers?
Some businesses may be wary of utilizing premium SMS specifically for sweepstakes because the legality of it has been debated in the past. While it is illegal to require a purchase, payment, or other “consideration” as a prerequisite to entering sweepstakes, there has not been a formal ruling yet on whether PSMS payments violate this law or not. Therefore, you can technically use PSMS for sweepstakes.
However, you can also simply use standard SMS for a text-to-win campaign. There are various other uses of PSMS you can take advantage of that are more effective (and less legally ambiguous).

When (and Why) You Should Use PSMS

Premium SMS won’t be right for every text marketing campaign, but if you’re looking at a microtransaction or a means to monetize premium digital content or services, PSMS offers an array of advantages over standard texting (not to mention other options like email or snail mail):

  • User-friendly. As illustrated at the beginning of this article, you are likely to net more customers more quickly by allowing them to opt-in with a swift and simple text rather than having to follow a link or fill out a form. Each time you link to an external source you lose engagement. 
  • Secure. Because mobile carriers handle PSMS payments, you don’t have to ask for sensitive information that most people might be hesitant to hand over via text. 
  • Convenient. Users don’t have to make new accounts or memorize new passwords, and you don’t have to worry about drawing up new contracts or even verifying your customers’ identities.
  • Easy to implement. An automatic purchasing process means you don’t need extensive technical know-how to set up or send PSMS.

It doesn’t get much easier than that, for you or your customers. Of course, to realize the full potential of your next PSMS marketing campaign, there are a few things you’ll need to keep in mind.

Implementing Premium SMS Effectively

Anyone can send a text. But to send an effective one from a marketing standpoint, particularly premium SMS, you need to make sure you’re doing it right. That means cellular compliance, but it also means putting your customers at ease from the start.

Done wrong, a PSMS campaign can come across as spammy. To avoid this, make sure your message clearly communicates all of the terms and conditions from the beginning, along with an equally clear option to opt-out. In particular, be sure to let your customers know that whatever product or service you are offering will incur a cost.

PSMS has a reputation in some circles for low ROI, due to some mobile operators reserving a large share of the payments for themselves, and high costs to consumers, due in part to price points being set by SMS payment providers rather than the companies who use them. These pitfalls can be easily avoided, however, by working with the right text message platform provider.

Partnering with the right provider and text marketing platform can give you the tools and resources you’ll need to not only reach your customers but engage with them with the greatest ease and convenience imaginable.

NorthText is a standout provider of innovative text marketing solutions. If you want to learn more about how to pay by premium SMS, or are ready to start a new text marketing campaign, simply call or text us today at (312) 869-9070.

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