Articles, SMS Marketing

Transactional SMS: The secret to improved customer engagement

Are you looking for a reliable yet efficient way to effectively communicate with your customers without bombarding them with unwanted spam or promotional messages? Then, look no further than transactional SMS.

Transactional SMS helps businesses provide vital and time-sensitive information to their customers. From order and appointment confirmations to on-demand customer support and payment reminders, they can be integral to any suitable communication strategy. 

In this article we will explore what transactional SMS is, how it works, its benefits, real-life use cases and how businesses can leverage transactional sms to improve customer engagement. We will also discuss the various laws and regulations that companies must follow when sending transactional SMS messages. 

What is transactional SMS and how does it work?

Are you trying to improve your customer communications channels? Transactional bulk SMS can be a game-changer. Users usually receive a text message with details related to their transaction when they purchase a product or service. This action then triggers a message to customers to keep them informed every step of their transaction journey. These typically include order confirmations, account balance information, or shipping updates.

A transactional SMS API is an interface that enables businesses to integrate their software, solutions, or websites. The gateway integrates with your business’ backend system or Customer Relationship Management (CRM) systems, automatically triggering the dispatch of transactional messages in response to specific customer actions. By using transactional SMS, you can provide your potential and existing leads with a seamless customer experience and improved overall customer satisfaction. 

What are the benefits of transactional SMS?

1) Improved customer engagement

One of the most significant advantages of transactional SMS is that it can provide your business with direct communication with consumers. With Vision6 you can stay in touch with your customer in real-time by providing them with personalised and relevant information that keeps them engaged throughout each purchase and transaction journey.

2) Faster delivery and increased efficiency

Transactional SMS can be delivered to mobile devices instantly, ensuring that customers receive important information at the time it matters. Furthermore, by automating transactional SMS and integrating it with your business’ existing relationship management tools, you can save a significant amount of time and focus more on providing additional value to customers. 

3) Greater security

Ensuring high levels of security and encryption when communicating with customers can be time-consuming and costly. Transactional SMS is an ideal option for conveying sensitive information related to a customer’s transaction and purchase process, as it is considered one of the most secure communication channels. Therefore, transactional SMS can help your business stay confident that sensitive customer information such as account balances or payment details are kept safe. 

4) Higher open and response rates

According to a recent study conducted by Gartner, transactional SMS has an open rate of approximately 98%, significantly higher than other communication channels such as email. Therefore, your business can cut through the noise with transactional SMS and ensure that consumers see your messages.

Difference between transactional SMS and promotional SMS

You may be wondering what the difference is between transactional and promotional SMS. Knowing the difference between the two can help deliver the right message to the right target audience and ensure that your business is compliant with SMS marketing regulations. While both types of customer communication take place through the same medium, they have different purposes, rules, and regulations. 

Transactional SMS is usually triggered by a customer’s actions, such as purchase confirmation or a password reset request. These messages are typically more informational and are considered transactions between your business and its customers.

Conversely, promotional SMS is sent with the ultimate purpose of promoting a product or service. They are generally sent to a larger audience and contain content such as new product announcements, discounts, promo codes, and offers. To avoid spamming customers, promotional SMS requires explicit opt-in from the customer and is governed by strict rules and regulations.

Examples Of Transactional SMS

1) 2-Factor Authentication pin codes

These transactional messages are used to verify the customer’s identity and maximise the security of their account. They often contain a unique code the recipient must enter to access their account or complete a transaction. 


“Enter the 5-digit code sent to your registered mobile number to verify your identity and complete your transaction. This code will expire in 10 minutes.”

2) Password resets

Password reset messages help customers reset their passwords safely and securely. They usually contain a link to a secure webpage where users can safely reset their log-in password and regain access to their account.


“Forgot your password? Click here to be redirected to reset it and regain access to your account securely.”

3) Appointment or reservation confirmations

Appointment or Reservation Confirmation messages are sent by the business to the consumer to confirm a particular appointment or reservation made by the customer. They usually include relevant details such as the time, location, and instructions the customer needs to follow.


“Your reservation at our restaurant is confirmed for Saturday at 5pm. See you then!”

4) Shipping updates

These transaction messages provide customers with real-time updates about the status of their purchase shipment, including data such as the estimated delivery date, tracking number, order number, and any other issues or delays that may arise during the shipment process. 


“Your order has been shipped and is scheduled for delivery this Saturday. Please track your shipment through the following link.”

5) Order confirmations

Order confirmations confirm that your business has received the customer’s order request, and is currently being processed. They will often include information such as the order number, the itemised list of purchased items and their respective prices, and the estimated delivery date of the order.


“Thank you for your order! The selected items will be shipped within 2-3 business days. Please find attached your order details.”

6) On-demand customer support

Your business can use on-demand customer support to provide immediate assistance to the customer, allowing them to efficiently contact your business and receive help with any specific issues they may be facing. This transactional message may include a link to a customer support webpage or a chatbot.  


“How may we assist you? Please reply with your question or concern about the product/service, and our support team will get back to you shortly.”

7) Payment reminders or receipts

Payment reminders or receipts are used to update customers about upcoming payments or confirm a payment has been received. These messages usually include details about the amount due, the due date, and other relevant information.


“Your monthly subscription fee of $30 is due September 1st. Pay now to avoid late fees.” 

The importance of SMS compliance

Consent is crucial in all forms of SMS marketing because it ensures that businesses only send messages to customers who are explicitly permitted to receive them. Unsolicited SMS messages (spam) can result in various legal penalties, damage to a brand’s reputation, and an overall loss of consumer trust. 

SMS Laws and Regulations

There are several laws and regulations that your business must follow when sending transactional SMS messages to customers such as:

GDPR applies specifically to businesses operating in the European Union and regulates consumer data collection, storage, and utilisation, such as mobile phone numbers.

TCPA (United States) governs the usage of automated calling systems, pre-recorded voice messages, and SMS messages.

These laws all regulate unsolicited electronic messages. These regulations require businesses to obtain explicit consumer consent before sending them SMS messages.

Do you need consent to send transactional SMS?

Unlike conversational messages based on inbound messaging and implied consent, transactional SMS requires express consent from the customer before any messages can be sent to them. Unlike conversational messages based on inbound messaging and implied consent, transactional SMS requires This means your business must obtain explicit customer permission before sending transactional messages. 

Customers can give the appropriate consent when they provide their phone number, for example at the checkout when placing an order online. However, it must be made clear that any messages are purely to update the cusotmer about their transaction.

You can also obtain consent through sign-up forms on your business’s website that clearly state consent terms or through in-person written consent. 

Do you need an opt-out for transactional SMS?

Transactional SMS messages are deemed critical and necessary for customer transactions so they do not require an opt-out mechanism. We do recommend you communicate the nature and frequency of transactional SMS messages to consumers before sending them.

If you are including promotional content, your message will lose it’s transactional status and you run the risk or breaching compliance laws. This is why we recommend keeping your promotional content entirely separate from your transactional comms.

Article Categories