Can SMS Payments Replace Traditional IVR Payments? SMS payments have evolved significantly since their introduction. Originally simple text-based transactions, the technology now incorporates advanced solutions like USSD, QR codes, and NFC. Simplicity drives SMS transaction growth. These payments complete in seconds, compared to alternative solutions like IVR. SMS-based payment systems address a major concern in mobile money transactions: data security. You need a reputable provider that guarantees secure payment services. Many people cite SMS payments for accessibility. Transactions work on pretty much any mobile phone. No need to buy an expensive smartphone or install suspicious software. But despite these perks, can SMS payments replace IVR? Read below as we explore that question. What Are SMS Payments? SMS payment is essentially what it implies – financial transactions completed via short message service. SMS-based payments have garnered significant attention over the years, thanks to convenience and accessibility. The technology is a step up from traditional pay by bank methods, which typically require a trip to a banking hall or ATM. Many find SMS transactions swifter and more secure than other virtual payment solutions. But SMS payment security concerns led Paytia to develop Secure Code verification, which rebuilds customer trust in payment links. How Do SMS Payments Work? The SMS payment process is straightforward. First, a business sends an SMS message to its clients. The text message may or may not contain an active link. But for security, forward-thinking businesses integrate clickable links into their SMS payment prompts. With Paytia's Secure Code, customers receive a 4-digit verification code separately from the payment link, confirming the link's legitimacy before they click. Clicking on the URL directs a client to a mobile-friendly checkout page. The customer completes the process by entering their payment credentials. SMS transactions are instant. Once a client inputs their payment information and authorizes the process, their mobile wallets are charged almost immediately. Purchase costs are factored into a customer's monthly mobile phone bills or deducted from their prepaid balance. Unpacking the History of SMS Payments Mobile payments have evolved significantly since their introduction in the late 1990s. Early implementations focused on simple text-based transactions for vending machines and basic services. Vodafone's launch of M-Pesa in Kenya revolutionized the mobile money landscape. M-Pesa set the stage for disruptive mobile money innovations over the years. The technology registered massive growth, serving as a more accessible alternative to traditional banks. Tech giants Google and Apple entered the mobile payment scene with NFC-based digital wallets and payment apps, expanding the mobile payment ecosystem. What Are IVR Payments? Interactive Voice Response (IVR) payments are payment methods made over a phone call, using an automated and self-service phone system. Unlike SMS transactions that rely on text messages and links, an IVR payment requires a customer to input their payment information through touchtones. The transactions can be completed without necessarily speaking to a live agent. IVR payments are available 24/7. But while the system is inherently self-service, agent intervention may be necessary from time to time. How Do IVR Payments Work? Like SMS payments, IVRs require three principal parties. First, there must be a business requesting payments. Next is the client authorizing the transactions. And more importantly, you need a reputable IVR payment gateway. These are mobile money services that offer IVR, usually in addition to other payment solutions like SMS and video-based payments. The IVR payment process begins with a customer initiating a call through a dedicated phone number. An automated voice system helps validate the customer's credentials. For instance, they may be required to input their account numbers or a unique reference number using their mobile device's keypad. This is a security measure to prevent unauthorized account access. The input details undergo automated verification. At this point, the voice prompt may also need to confirm a customer's account number and account balance. Not only is this an extra safety precaution. It also notifies the client whether they have sufficient funds to proceed with the initiated transaction. Next, a customer enters their payment information using their phone's keyboard. Credit or debit card numbers, card expiration date, and the CVV are mandatory to go ahead with the transaction. If everything checks out, the IVR system processes the payment. The customer receives a verbal confirmation (usually also with a reference number) of the transaction's details. Can SMS Payments Replace IVR? To settle this question, we must understand the features that define SMS-based payment transactions. 1. Increased Transaction Speed Making
