Transactional SMS: Changing the Way Companies Communicate

Transactional SMS: Changing the Way Companies Communicate

One might often notice a service message from the bank whenever money is withdrawn or a delivery message from an e-commerce website while making a purchase.

The text message received by phone is a type of transactional SMS sent by the company or service to confirm the customer’s action. This type of SMS is an automated response to a customer’s action or trigger.

Messages showing one-time pins, bank balance, account activations, and confirming orders are some forms of these SMSes.

Transactional messages are popular because of their simplicity and ease of communication if offered. A study conducted in 2016 estimated that 70% of consumers preferred service-based messages on the phone. These messages have different functions based on the service:

  • Account balance information, including cash transactions, withdrawals, credit, or debit.
  • Order confirmation regarding a product or service from the respective group or business.
  • Ticket purchase confirmation of airlines, railways, or other means of transport. Short messages highlight important details for the customers’ convenience.
  • Purchase confirmations, including billing, monetary transactions, or refunds.
  • One-time passwords for accessing or resetting accounts and passwords or confirming bills and orders.
  • Confirming credit and debit card transactions for any product or service.
  • Shipping time and time for delivery regarding products and services to let the customer know about the accurate timing and schedule.
  • Alerts and emergency notifications from the company or the bank regarding any suspicious activities or malpractices.
  • As a means of mass communication to relay emergency alerts by the government or organization.

With such a wide range of applications and consumer preference, no wonder many businesses implement these messaging services to communicate with the customers.

How They Work:

  • A business or company takes the phone number of the customer during purchase or registration.
  • The phone number acts as a quick recipient of any alert or message.
  • Each transactional message is coded based on the trigger acted upon by the customer. For example, bill payments trigger bank balance messages, and online shopping triggers product details and purchase confirmation messages.
  • Whenever an action is triggered, the message quickly reaches the customers’ phone regardless of the time, place, or data connectivity.
  • Customers can either act upon the message using reply options or do the action best fitted according to the message.

Transactional Messages and Their Effectiveness:

  1. Prompt: These messaging services waste no time in reaching the consumer’s device because they are automated. Messages are sent out instantly in response to the customer’s action, and there is no requirement of any manual operation.
  2. Reliability: Users are prone to open at least 90% of the inbox messages, making these messages more reliable and effective in addressing information. SMS in mobile phones is currently the most effective means of communication with customers.
  3. Versatile: Messages in the form of SMS can be sent to any phone irrespective of size, company, brand, network, or region. This makes transactional messages a powerful tool to relay information or alerts to those consumers that do not have access to internet data.
  4. Customer Recognition: These messages establish a reliable communication channel between the company and the customer. Customers will feel valued and build trust with the service or product.
  5. 24/7 Every Day: Receive messages any time anywhere around the world after making a purchase or an action. This makes the service more useful as information and alerts are sent on time.

Transactional Messages and Non-Marketing Purposes:

These SMSes are effectively used not only for business transactions but also for many non-commercial uses as well. They are used by transport services to relay information regarding purchase and seat details, and by shops and other services to relay information quickly, and so on. This is because of the following reasons:

  1. Quickest Security Measure: Instead of wasting time and effort on cybersecurity services, shops, and commercial services can use these messages to confirm purchases or passwords. There are no delays in message delivery, and these messages are highly secure as only the user is in charge of the recipient’s phone number.
  2. Can Bypass Security Or Restrictions: Since transactional messages contain important information or alerts, they are hardwired to bypass any restrictions on the phone. Even Do Not Disturb settings are no match for these messaging services, unlike promotional messages.
  3. Reminders and Alerts: Incidents occur when a person makes a booking or registration and then forgets all about it. Transactional messaging services help to remind the customers of any upcoming events. They can also be used as alerts to relay information regarding the status of a product the customer has ordered.


Shankar is a tech blogger who occasionally enjoys penning historical fiction. With over a thousand articles written on tech, business, finance, marketing, mobile, social media, cloud storage, software, and general topics, he has been creating material for the past eight years.

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