The Top Use Cases of Text-Based Messaging for Collection Activities

Are you looking for ways to improve the efficiency and effectiveness of your collection activities? One solution that is gaining popularity is the use of text-based messaging, such as SMS or messaging app notifications. Here are the top five use cases of text-based messaging for collection activities:

1. Payment reminders

Sending payment reminders to customers via text message can help to improve payment rates and reduce delinquencies. According to a study by the Federal Reserve, 63% of consumers find text message reminders to be helpful (https://www.federalreserve.gov/consumerscommunities/consumer-tools/consumer-payment-research.htm).

2. Payment notifications

Sending payment notifications to customers via text message can provide them with confirmation and peace of mind, and can also help to reduce disputes and chargebacks. A survey by PYMNTS.com found that 65% of consumers prefer to receive payment notifications via text message (https://www.pymnts.com/news/b2b-payments/2018/consumers-prefer-text-notifications-for-bill-payments/).

3. Account updates

Providing customers with updates on the status of their account via text message can help to keep them informed and engaged, and can also help to reduce the number of customer service inquiries. A study by Experian found that text message notifications had a 91% open rate, compared to just 66% for email (https://www.experian.com/blogs/ask-experian/the-power-of-text-message-notifications/).

4. Customer service

Text-based messaging can be used to provide customer service support to customers who are experiencing issues with their payments or have questions about their account. This can help to resolve issues quickly and efficiently, and can improve customer satisfaction. A survey by the National Retail Federation found that 74% of consumers prefer to use messaging for customer service inquiries (https://nrf.com/media/press-releases/consumers-prefer-text-/)

Overall, the use of text-based payments for collection activities offers several advantages, including increased convenience for customers, improved payment rates, better security, greater flexibility, and reduced cost. As a result, more and more businesses are adopting this approach to collections, and it is likely to become even more popular in the future.