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The Complete Guide To Pay By Text & Where To Get It

SMS payments are becoming increasingly popular as an alternative payment method. This list of viable providers includes Paysley, Relay, Podium, and others.

    Chris Motola
  • UPDATED

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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

CompanyBest ForNext StepsBest For
Square

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  • Best for new businesses
  • Starts at $0/month
  • SMS Payment Fee: 3.3% +$0.30
  • Best for new businesses
  • Starts at $0/month
  • SMS Payment Fee: 3.3% +$0.30

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Stripe Payments

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  • Best for eCommerce businesses
  • Starts at $0/month
  • SMS Payment Fee: 2.9% +$0.30
  • Best for eCommerce businesses
  • Starts at $0/month
  • SMS Payment Fee: 2.9% +$0.30

Visit Site

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PaymentCloud

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  • Best for high-risk businesses
  • Variable monthly fee
  • SMS Payment Fee: Adds $0.23 cents to base transaction fee
  • Best for high-risk businesses
  • Variable monthly fee
  • SMS Payment Fee: Adds $0.23 cents to base transaction fee

Visit Site

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Helcim

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  • Best for growing businesses
  • No monthly fee
  • SMS Payment Fee: Interchange + 0.5% + $0.25
  • Best for growing businesses
  • No monthly fee
  • SMS Payment Fee: Interchange + 0.5% + $0.25

Visit Site

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SumUp

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  • Best for sole proprietorships
  • Starts at $0/month
  • SMS Payment Fee: 3.25% + $0.15
  • Best for sole proprietorships
  • Starts at $0/month
  • SMS Payment Fee: 3.25% + $0.15

Visit Site

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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 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.

5 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

Square


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Pros

  • No monthly fees for basic account
  • Predictable flat rate pricing
  • Ideal for low-volume merchants and contractors
  • All-in-one payments system

Cons

  • Account stability issues
  • Does not accept most high risk industries

Why We Chose Square

Square provides one of the most comprehensive payment processing services available to new businesses and is consistently among the best entry-level services for businesses that want to take credit card payments. While Square was not the first company to offer pay by text services, Square now offers users the ability to conveniently invoice customers directly from the virtual console.

Square Features

Square offers one of the most generous feature packages one can get without a monthly fee (and even more if you do pay one). In addition to SMS payments, this includes:

  • Credit and debit card processing
  • Mobile card reader (magstripe-only) included with an account
  • EMV and NFC-capable card readers are available
  • Square Register POS system available
  • ACH processing included with every account
  • Square Online Store for eCommerce businesses
  • Analytics and reporting available through Square Dashboard
  • Create milestone-based payment schedules (Invoice Plus)
  • Send batch invoices (Invoice Plus)
  • Custom invoices (Invoice Plus)

Square Pricing

  • No setup or application fees
  • $0/month Square free account; $20/month for invoice Plus plan
  • 3.3% + $0.30 per invoice paid online
  • 2.9% + $0.30 per invoice paid online (invoice Plus plan)

Where Square Shines For Text To Pay

Square’s invoicing system is a simple and versatile way to charge your customers by text without having to invest in any specialized hardware or paid monthly plans, though higher volume businesses do have the option if they want reduced transaction fees. Even better, you’ll have access to Square’s omnichannel payments tools should you need them.

Get Started With Square

Read our in-depth review

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Stripe: Best For eCommerce Businesses

Stripe Payments


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Pros

  • No monthly fees
  • Exceptional subscription services
  • Predictable flat-rate pricing
  • Excellent support for international commerce

Cons

  • Account stability issues
  • Does not accept high-risk merchants

Why We Chose Stripe

Stripe prides itself on staying on the cutting edge of payments, particularly when it comes to card-not-present transactions and eCommerce. Pay by text falls well within Stripe’s wheelhouse, allowing businesses to invoice their customers at no additional cost, and without the burden of a monthly fee. If you do most of your business online (including by text), Stripe should be near the top of your list.

Stripe Features

Stripe Billing is included in your free, basic Stripe account. Additional Stripe features include:

  • Credit and debit card processing
  • ACH processing included with every account
  • Stripe Radar anti-fraud protection
  • Stripe Terminal API and card readers for card-present transactions
  • Extensive API library and developer tools
  • Broad support for international payments and local payment methods
  • Ancillary business services

Stripe Pricing

  • No setup or application fees
  • No monthly fees
  • 2.9% + $0.30 for payment link transactions (including SMS payments)
  • + 0.4% to generate an invoice for post-payment proof of transaction (capped at $2)
  • + 0.5% on recurring payments

Where Stripe Shines For Text To Pay

Stripe is somewhat notorious for needing technical skills to implement, but using Stripe’s payment links doesn’t require even a line of code to implement. You can generate them right from your Stripe dashboard and paste them into a text message. This makes Stripe both a cost-effective and easy-to-use way to use SMS payments.

Get Started With Stripe Payments

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PaymentCloud: Best For High-Risk Businesses

PaymentCloud


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Exclusive Promo: PaymentCloud will give you $200 if they can't beat your current rate. Get Your Quote

Pros

  • High-risk specialist
  • No account setup fee
  • Few public complaints
  • Good pay-by-text pedigree

Cons

  • No publicly disclosed pricing
  • Low risk merchants can probably find a better deal

Why We Chose PaymentCloud

High-risk businesses have just as much use for SMS payments as any other type of business, which is why it’s great to see the option offered by a high-risk payment processor like PaymentCloud. Pricing is variable depending on your type of business and where PaymentCloud ends up finding you a merchant account, but it does consistently rank as one of the most affordable high-risk processing options.

PaymentCloud Features

In addition to pay by text, PaymentCloud offers:

  • Credit and debit card processing
  • Payment gateway access through Authorize.Net, NMI, or USAePay
  • ACH and echeck processing available

PaymentCloud Pricing

PaymentCloud offers payment links through Paysley. The cost for the service may vary depending on your PaymentCloud package.

  • No setup or application fees
  • $15/month low-risk accounts
  • Transaction fees: Interchange + 0.05%-0.3% + $0.08-$0.10 for low-risk accounts
  • Transaction fees vary by bank/back-end processor for high-risk accounts
  • Transaction fees + $0.20 per transaction
  • Transaction fees + $0.03 per SMS text
  • Transaction fees + $0.05 per picture text

Where PaymentCloud Shines For Text To Pay

PaymentCloud recently acquired Paysley, one of the earlier services to offer pay by text services. In doing so, it inherited the infrastructure and expertise of that service. While many other pay by text services are essentially just leveraging payment links, text payments have been more of a specific focus for Paysley.

Get Started With PaymentCloud

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Helcim: Best For Growing Businesses

Helcim


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Pros

  • No monthly fees
  • Interchange-plus pricing
  • Excellent customer support
  • No account setup fee

Cons

  • Does not accept high-risk businesses
  • Not suited for very low-volume businesses

Why We Chose Helcim

Helcim stands out from among the crowd by offering full merchant accounts and interchange-plus to customers without a monthly fee, making it a great service for businesses that have outgrown flat-rate pricing. Additionally, Helcim manages to keep pace with giants like Square and Stripe when it comes to emerging payments features like text to pay, which Helcim offers at no additional charge.

Helcim Features

In addition to pay by text, Helcim offers:

  • Credit and debit card processing with a full merchant account
  • Affordable, versatile card reader
  • Good developer tools
  • Strong support for international sales

Helcim Pricing

  • No setup or application fees
  • No monthly account fees
  • Interchange + 0.5% + $0.25 on card-not-present transactions, including payment links (volume discounts available)

Where Helcim Shines For Text To Pay

Like Square, Helcim lets businesses generate and send payment links right from its virtual console, so you won’t need anything special to get started. Helcim’s also one of the few services to offer both a full merchant account and payment links without the aid of a payment gateway add-on.

Get Started With Helcim

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SumUp: Best For Sole Proprietorships

SumUp


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Pros

  • No monthly fees for basic account
  • Predictable flat-rate pricing
  • Affordable hardware
  • No account setup fee

Cons

  • Account stability issues
  • Does not accept high-risk merchants
  • Limited features

Why We Chose SumUp

Services like Square and Stripe offer a lot of utility with no monthly payment, but they can be overkill for very small or simple businesses that just need to fire off a text invoice once in awhile. For these types of businesses SumUp offers both affordability and simplicity.

SumUp Features

In addition to pay by text, SumUp offers:

  • Credit and debit card processing
  • Affordable, versatile card reader
  • Gift cards
  • Inventory management

SumUp Pricing

  • No setup or application fees
  • No monthly account fees for basic account
  • $199 for SumUp POS Pro Plan
  • 3.25% + $0.15 per payment link transaction (including text)

Where SumUp Shines For Text To Pay

Simplicity is the name of the game for SumUp, and if you’re relying on text to pay for a substantial portion of your transactions, there’s a decent chance you’re running a small operation. Additionally, SumUp’s invoicing transaction fees are now slightly cheaper than those of a basic Square account, which may give it an edge over its closest competitor in the eyes of minimalists.

Get Started With SumUp

Read our in-depth review

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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.

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. Features vary by company, 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.

Common Questions About SMS Payments

How do I set up SMS payments?

To get started accepting SMS payments, you’ll need to choose the company with the services that fit your needs best. There are some differences in how each company’s system works, but it’s usually pretty simple to set up.

Is SMS payment safe?

Yes, if the service is PCI-compliant. Just remember not to put card information in the text itself.

What is an SMS payment gateway?

An SMS payment gateway is just a payment gateway that supports SMS payments. A payment gateway transmits payment data between a customer and a payment processor. It does not actually process the payment, for which you need a payment processor or a merchant services provider.

How do SMS payments work?

SMS payments allow businesses to invoice customers by text. The customer can then initiate a payment using a supported payment method by tapping on a link or typing in a confirmation.

In Summary: 5 Text To Pay Services For Small Businesses

  • Square:
    • Best for new businesses
    • Starts at $0/month
    • SMS Payment Fee: 3.3% +$0.30
  • Stripe Payments:
    • Best for eCommerce businesses
    • Starts at $0/month
    • SMS Payment Fee: 2.9% +$0.30
  • PaymentCloud:
    • Best for high-risk businesses
    • Variable monthly fee
    • SMS Payment Fee: Adds $0.23 cents to base transaction fee
  • Helcim:
    • Best for growing businesses
    • No monthly fee
    • SMS Payment Fee: Interchange + 0.5% + $0.25
  • SumUp:
    • Best for sole proprietorships
    • Starts at $0/month
    • SMS Payment Fee: 3.25% + $0.15
Chris Motola

Chris Motola

Senior Staff Writer at Merchant Maverick
Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris 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.
Chris Motola
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