Application-to-person (A2P) SMS marketing is the process of sending a text message from an application to a subscribed user via an SMS sending service. The SMS sent from the application can be opened on any mobile phone that is GSM (global system for mobile), which includes the most basic feature phone, such as the famously unbreakable Nokia 3310.

The growth rate is driven by elements such as increased numbers in mobile subscribers across the world, particularly in developing countries such as India and China, and increased use of the messaging service in customer-facing industries.

A large number of these senders and receivers rely on A2P SMS messaging for activities such as mobile payments, banking, and marketing. Another contribution to the growth of the A2P SMS market is the fact that more and more Banking, Financial Services, and Insurance (BFSI) companies are adopting transactional A2P SMS messages by sending a one time pin (OTP) after a banking transaction or password change notification.

A2P SMS is expected to grow in popularity, which is exciting news for businesses looking for a highly effective way to reach their customers.

Why is the A2P SMS market growing?

The Internet of Things (IoT) is growing rapidly

A2P SMS is a part of the IoT, which is growing rapidly. There are already over 400 million users of IoT devices in the world, a number which is set to increase dramatically in the next few years.

A2P SMS marketing is already being used to connect customers with real-time data from online applications and devices. Because of the growth of IoT devices, people now expect this sort of interaction with companies which is driving the increased use of A2P SMS marketing. SMS using the IoT can now connect employees and consumers with real-time data from online applications and devices. This can help to improve the customer journey.

Increased use in BFSI companies

Some of the major uses of A2P SMS marketing include banking, financial services, and insurance companies. It is highly effective as it allows these companies to send out notification SMSes, verification SMSes and one-time pins (OTPs).

The growth of A2P SMS in the BFSI industry can be attributed to the demand from consumers for increased connectivity from banks and financial institutions. A2P SMS is also used in mobile payments and mobile banking, which has contributed to the growth of this technology. Banks can use it to reach out to consumers in a way that is not intrusive and that can be immediately actioned.

Developing countries are catching up

Countries such as China and India have some of the largest growing numbers of mobile users in the world. And this has seen the numbers of A2P SMS marketing rise significantly. Many of these users are relying on A2P SMS for mobile banking and payments as well as marketing activities.

The rapid growth of technology and innovations in these developing countries is also expected to have an impact on the A2P SMS industry. These developing countries have helped to increase the growth of this technology, increasing the numbers from 400 million in 2016 to almost 1.5 billion in 2022. These emerging markets are demanding more connectivity, and developers and providers have had to deliver.

The benefits of A2P SMS marketing

Personalized messages

By using A2P messaging efficiently, businesses can tailor their SMS messages to suit the needs and touch points of the customer journey. Personalized messages from businesses show consumers that the business cares and is paying attention to their needs, which will encourage loyalty from your customers. A2P SMS can be an effective marketing tool, especially when the messages are deployed during key touch points in the customer journey.

The simplest way to send notifications

A2P SMS is one of the simplest and most effective ways to send notifications in an omnichannel world. A customer can order something at the point-of-sale (POS) and register with a cell phone number. They will then receive a message informing them that their item is ready for delivery. It’s a straightforward process with zero hassle involved, which will improve the customer journey and streamline the shopping experience tenfold.

Fast, safe, and reliable

Top-end A2P messaging services like Clickatell Platform can handle time- and business-sensitive messages with ease, using established direct connections to mobile network operators. The fast delivery is one of the major benefits of A2P SMS marketing as it enables you to reach your audience at just the right moment without bothering them at awkward times of the day. SMS messages are also more likely to be delivered as they do not rely on data for sending and receiving.

Short, sweet, and effective

With the increasing use of A2P SMS marketing in the financial industry and with developing countries catching up to the latest trends, the market is growing significantly. It’s a wise choice for businesses as it allows you to personalize your messages and is the simplest way to send notifications.

Consumers are also moving toward SMS communication more and more, leaving voice communication between consumers and businesses behind. The Internet of Things (IoT) is also getting involved, which is an exciting step, so take a look at our infographic on how it ties into SMS marketing.

 

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