What Is Pay By Text: The Best Providers & How To Invoice To Mobile Devices

SMS payments are becoming increasingly popular as an alternative payment method. Start your search with these top picks.

Chris has been writing about small business topics since 2003. He has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

• WRITTEN & RESEARCHED BY

  Chris Motola Chris has been writing about small business topics since 2003. He has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

  Expert Contributor

  Last updated onUpdated February 27, 2024



Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.

REVIEWED BY

Frank Kehl Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.

Expert Contributor

Credit card processing hardware may be more accessible than ever, but so are innovative ways to avoid it altogether. One increasingly popular solution is text to pay.

Text to pay allows businesses to send a payment link by text to a customer, who can then directly access an online checkout through the SMS text, no hardware needed!

Want to learn more about SMS payments and where you can find text to pay services? We’ll break it all down for you below.

Learn More About Our Top Picks

Read more below to learn why we chose these options.

What Is Pay By Text?

Pay by text uses an SMS (or other) text message service to invoice a customer. The customer can then complete the purchase by texting a response or clicking on a payment link, which takes the customer to a secure checkout page to finish the transaction.

Text to pay typically makes use of payment links, which can be pasted into texts, messages, or emails. This makes it possible to collect credit, debit, and other types of non-cash payments without terminals, POS systems, readers, or even websites.

How Do I Set Up SMS Payments?

To get started accepting SMS payments, you’ll need to choose a payment processor that offers text to pay. There are some differences in how each company’s system works, but it’s usually pretty simple to set up.

5 Best Text To Pay Services For Small Businesses

To get started accepting SMS payments, you’ll need to choose the company with the services that fit your needs best. There are a number of payment gateways that offer some form of text to payment functionality as well as services that focus on SMS payments. We’ve gathered a few of the more interesting services below.

• Square: Best for new businesses
• Stripe Payments: Best for eCommerce businesses
• PaymentCloud: Best for high-risk businesses
• Helcim: Best for growing businesses
• SumUp: Best for sole proprietorships

Square: Best for new businesses

Get Started With Square

Read our in-depth review

Jump back to comparison chart

Stripe Payments: Best for eCommerce businesses

Get Started With Stripe Payments

Read our in-depth review

Jump back to comparison chart

PaymentCloud: Best for high-risk businesses

Get Started With PaymentCloud

Read our in-depth review

Jump back to comparison chart

Helcim: Best for growing businesses

Get Started With Helcim

Read our in-depth review

Jump back to comparison chart

SumUp: Best for sole proprietorships

Get Started With SumUp

Read our in-depth review

Jump back to comparison chart

Payment Processing Rating Methodology

Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.

When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.

For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:

• Credit card processor rating criteria
• High-risk merchant account rating criteria
• Credit card reader & mobile payment device rating criteria

How Does Text To Pay Work?

When it comes to the nuts and bolts of how SMS payments work, it’s pretty simple, really. While there may be some variations with each company that offers text messaging payment services, you can generally expect the following elements when it comes time to pay:

1. A business sends a text to their customer’s phone number, or the customer texts a shortcode number to the business to initiate the sale.
2. After communicating what product or service the customer wishes to purchase, the business sends the customer a link to a secure, mobile-friendly payment form.
3. The customer enters their payment information and can typically approve saving the card on file for recurring payments or a future purchase.
4. The customer may get a unique code to complete the purchase.

The customer may also get another verification text from the payment processing company to confirm their intent to buy. As stated above, the exact process may vary by company, but you can expect a similar procedure to complete the sale.

Mobile Carriers VS Payment Processors For Text Payments

Many people associate text message payments with charity donations (often, the amount is added to their phone bill). What is lesser known is that phone carriers generally only allow organizations to accept donated amounts in $5 or $10 increments. By setting up these limits, phone carriers reduce their own risk from non-paying customers.

While the phone carrier setup can work great for flash-giving campaigns and allow an organization to avoid paying some payment processing fees, it isn’t a viable solution for businesses. Read our guide on NFC payments to learn more on this topic.

Is An SMS Payment The Same Thing As A Payment Link?

In most cases, an SMS payment is essentially a payment link sent over an SMS text. In that sense, text to pay is very similar to say, a QR code payment. Different services may approach text to pay services differently, however.

Some may simply offer payment link generation while you handle the logistics of pasting and sending the text to the customer. Others are essentially texting services that work with a payment processor to provide the hosted checkout functionality. The latter generally comes with additional text-related costs, so make sure you’re getting the functionality you need before you buy an expensive texting package.

Are SMS Payments Safe?

SMS Payments are relatively safe. An SMS payment, in most cases, is a link to an online checkout interface. This puts text to pay more or less in the same category as other card-not-present transactions when it comes to security. PCI compliance, as always, is critical.

One potential area of vulnerability that is unique to pay by text is that your customers may be unfamiliar with the protocol and attempt to actually text you their credit card information rather than use the provided link. With this in mind, it may be worthwhile to walk your customers through the process if they’re unfamiliar with this form of invoicing.

8 Benefits To Using SMS Payments

The benefits of using SMS payments may not always be immediately apparent, but it’s a growing niche for a number of reasons. Some of the benefits of using SMS payments include:

1. Truly Contactless Payments: “Contactless payments” became a buzz phrase during the COVID-19 pandemic for payment methods that don’t involve touching anyone else’s hardware or cash. SMS payments are a simple and quick way to go contactless.
2. Easy Invoicing: SMS payments can be a convenient way to combine your invoices with payment processing.
3. Over One In Three Customers Wants The Option: An independent study commissioned by Weave found that 35% of customers were interested in paying by text.
4. Younger Customers Especially Want The Option: Sixty-two percent of customers under the age of 35 say they would pay by text message frequently or always if they could.
5. Text Bills Are More Likely To Be Read: Texts have a higher chance of being read than snail mail and email. The chances of a text being read are somewhere around 90%.
6. Most Americans Have Smartphones: Over 85% of Americans own a smartphone, making SMS payments a viable option for most customers.
7.  It Can Support Multiple Payment Types: Depending on your service provider, pay by SMS can be used to make credit/debit card transactions, ACH payments, or digital wallet payments.
8. It Can Eliminate The Need For POS Hardware: While high-volume businesses probably don’t want to give up their POS terminal just yet, SMS payments can be a viable alternative to a traditional POS setup for some businesses.

Should You Add A "Pay By Text" Option To Your Business?

Being able to take payments by text offers potential — as long as the benefits outweigh the costs. Even among the best credit card processing companies pay by text features can vary, so do compare service packages before making a decision. One company may find a lot of value in the extra capabilities to target and segment lists, while another may be more focused on cutting down telephone orders.

What services you choose mainly depends on your business model. Because text messaging offers a clear path to your customer’s hands, it may be worth finding the right balance to connect, engage, and encourage your customers to pay via text message, too.

If you are discovering what else is out there in payment processing, including other ways of accepting online invoice payments, be sure to check out our resources here at Merchant Maverick.

Jump back to comparison chart