May 10, 2024
Competitive Strategies, E-Commerce, Electronic Bill Payment, Mobile Commerce, Mobile Wallets, Transaction Processing
Text-to-pay technology received a boost late Thursday as San Francisco-based fintech EarnUp Inc. launched a text-to-pay app for mortgage lenders.
The white-label app allows lenders to send text reminders of upcoming mortgage payments with an embedded link to make payments using a debit card. Consumers can initiate payment using Apple Pay, Google Wallet, SMS text to pay, email click to pay, borrower portals, or call centers. Lenders using the app can reduce non-digital payment costs by up to 50% and lower call-center volume by 20%, according to EarnUp.
While text to pay is a burgeoning payments technology, with just 9% of all consumers having been exposed to it, 63% of consumers who are aware of the technology have used it to pay at least one bill, according to an upcoming report from Datos Insights. In addition, most bill-paying consumers who own a mobile phone say they are interested in pay-by-text payment solutions.
For its report, Datos surveyed 2,005 mobile-phone owners who pay bills in the United States.
“At least half of consumers receiving a text reminder to pay a bill in the last 12 months clicked through to pay their bill,” Ariana-Michele Moore, advisor, Retail Banking and Payments for Datos, says by email. “Approximately two-thirds of consumers using these links believe it is the easiest and fastest way to make a bill payment.”
Other key data points to emerge from the survey include 74% of respondents saying that paying a bill within a text message is the “fastest/best way” to make sure their payment is made on time, 63% saying they prefer paying bills directly within a text message and 57% indicating that paying within a text message is the most secure way to pay bills.
For billers, one advantage of text to pay is that it allows them to send text reminders to consumers that a payment is due. EarnUp’s app, for example, enables lenders to send personalized text messages based on specific triggers, such as an upcoming payment or missed payment, or as part of digital-payment campaign.
“By enabling text to pay using a debit card, we’re offering lenders a seamless, no-customer-code solution that enhances borrower engagement,” says Brian Gunn, EarnUp’s chief revenue officer, in a statement.
One demographic likely to embrace text to pay for bill payments is Gen Zers, which tend to initiate payments through their mobile phones. Some 65% of Gen Zers and millennials believe paying by text would be easy to do, compared to 37% of baby boomers and seniors, according to Datos. Overall, 50% of consumers who haven’t experienced this type of text think it would be very easy to do.
“Given the infancy of this technology, the number of businesses engaged in it is low, but the results are promising,” Moore says. “They are particularly promising for bills with consistent payment amounts.”
