What Is Transactional SMS: Understanding Its Types, Benefits & Examples

What Is Transactional SMS: Understanding Its Types, Benefits & Examples-feature image

Do you know, an average individual spends 90 minutes responding to an email, but only 90 seconds responding to a text message.

Consumers nowadays demand personalised and engaging communications. To fulfil this expectation, marketers need to design a mobile strategy that ensures the delivery of messages to consumers in the most direct way possible.

In fact, 75% of customers want companies to communicate with them via transactional SMS. Be it for appointments, payment reminders, offers or any other information. Sadly, only 30% of businesses are presently doing so.

For marketers, there is a huge untapped opportunity.

What Is Transactional SMS?

Transactional SMS is an automatically generated, non-promotional text message that businesses send to their customers to establish relationships. Examples of transactional SMS include order confirmations, welcome text messages, shipping updates, etc.

What makes transactional notifications so convincing? The answer is the nature of text messages. You can utilise transactional SMS in a variety of ways, depending on your aim and the sort of transaction and items or services you offer. Order confirmations, shipment and delivery updates, OTPs, and e-receipts are among the most prevalent types of transactional SMS.

Suggested Read: Top Free Bulk SMS Apps for Marketing

Types of Transactional SMS

transactional message

The primary objective of transactional SMS is to deliver critical transactional information to your clients at the right moment. However, there are different types of transactional SMS based on the end goals it serves.

  • One-time passwords: To enhance the security of interactions with customers, businesses send OTP messages to clients. Automated OTPs can verify customer actions, such as sign-ins, payments, and more.

  • Reservation status: Sending transactional SMS messages to consumers is an excellent method to notify them of their booking confirmations/ cancellations for a hotel stay, airline, or other services.

  • Informative updates: Transactional SMS allows you to send any important information about your products or services to your clients. For example, if you own an e-commerce firm, you can send these messages to your clients and keep them up to date about their order status, shipment update, delivery status, and payments. This will allow you to keep your clients informed throughout.

  • General warnings: Sending transactional SMS to your consumers as alerts for specific activities will ensure better customer service. You can keep your consumers informed about significant events, whether it’s for an appointment or a financial transaction, is critical for maintaining a successful business-client relationship.

Suggested Read: How to Start Bulk SMS Service Business in India

Why Should You Use Transactional SMS?

transactional sms provider

Consumers enjoy transactional SMS messages based on triggered events because they are personalised, relevant, and timely. Such messages are created to boost brand loyalty, avoid lapsed customers, and re-engage with those who are the most valuable to your business.

Let’s look at a few examples of transactional SMS messages in action.

  • Account Verification/Activation

Transactional SMS can update users on their account activation or verification option. Customers will get a unique code when they sign in or register, which they need to validate by clicking on an activation link or entering a verification code on their mobile device. Confirming identities via SMS is a low-cost, high-reliability, and convenient option to provide security and peace of mind.

account verification by sms

The above image is a great example of how users can verify their account in a few simple steps.

  • Confirmation of Orders

Transactional text messages for order confirmation, with follow-ups like shipping, delivery, and pickup alerts, serve a central purpose. It minimises post-purchase anxiety and strengthens the credibility of your business.

Order confirmation messages are a great method that not only reassures your consumers about their purchase but also invites them to continue their relationship with your company by participating in another mega sale event or signing up for email updates.

transactional sms pack

An order confirmation SMS like the one seen above informs customers that the transaction is complete and the order is in process.

  • Time-Specific Reminders

Missed appointments equate to lost sales opportunities. That’s why reducing no-shows is so important. With time-triggered text messaging, you can ensure that consumers don’t forget their upcoming appointments. When it’s time to restock consumable products, you might automatically contact customers who purchased them.

cheap transactional sms

When dealing with multiple consumers, a simple reminder SMS can go a long way toward reducing the number of missed appointments.  

  • Notifications in Real-Time

SMS are the most effective way to keep clients informed, particularly when the information is urgent. Customers don’t always act on notifications in a timely manner since phone calls and emails are easily overlooked.

Text notifications can send vital information to clients in real-time, allowing them to take action right away. Customers will feel appreciated and informed if they receive a real-time SMS alerting them of a flight change, a table is ready, their credit card activity, or their data consumption. This will improve their satisfaction and increase the likelihood that they will call on your business again.

get real time notifications via sms

The image above is an example of text you receive in your daily life if flight time changes or if you’re waiting for a table at a restaurant.

  • Requests for Opt-In

A welcome message is an ideal example of an opt-in request message. It can be used to thank subscribers for joining up your program or to give discounts as an opt-in incentive. Make the most of this opportunity by engaging each subscriber individually with the content that is tailored to their interests and keep them engaged with your business.

bulk transactional sms service provider

A birthday message is another example of an opt-in request text message. Sending a simple birthday text together with a unique offer, discount, or freebie is more than enough to turn a one-time consumer into a loyal customer.

  • Inventory Alerts
inventory alert via sms

You can automatically notify customers about the change in inventory levels by sending an alert text. Customers can sign up for minimum inventory level alerts and will be updated automatically when the time for replenishment comes.

Suggested Read: Importance & Benefits of Bulk SMS Marketing for Business

Benefits of Transactional SMS

For businesses, the benefit of transactional SMS goes way beyond higher customer engagement. As per a survey done on customers, 62% of participants say that fast delivery is the most important value, followed by customer involvement and cost-effectiveness.

  • Fast & effective data transmission

    The primary advantage of using transactional SMS is that it sends clear and crisp messages to customers. It’s a high-value SMS platform that also helps clients stay engaged. The innovation of this platform is the transmission of communications to clients in real-time.

  • It’s economical

    Transactional SMS messages are totally automated and need very little human intervention. Incorporating transactional SMS into your plan is a cost-effective method for establishing direct connection with your clients with improved delivery, engagement, and customer retention.

  • Enables integration

    Sending transactional SMS with a web-based SMS service might provide advanced features. You can easily integrate SMS platforms into your existing system and build unique triggers based on the company’s needs and goals using APIs and plugins.

  • 24×7 Service

    No matter what time a user does a transaction or orders products, they will receive the transactional message in real-time. It keeps users informed and builds trust among consumers.

  • Connects DND clients

    Another significant benefit of transactional SMS services is that they connect DND-managed consumers and deliver important information in real-time.

  • Streamlines eCommerce communication

    Though every industry can take benefit of transactional SMS but it’s an ideal platform for commercial sectors. For example, e-commerce companies can send status update on the ordered products, railways send PNR status updates, and banks can send transactional notices.

  • Helps companies go green

    Set aside all the above advantages and use this platform for your environment. Customers will be more aware of the social message because of this. As a result, include this solution in your business platform to reach the best possible results. After knowing about these advantages, you’ll be able to appreciate the value of transactional SMS in the corporate world.

Suggested Read: Best Indian Messaging Apps that are Made in India

Examples of Transactional SMS Service Providers

We have curated a list of transactional SMS Service Providers that cater to small, medium, and large enterprise customers.

  • Fast2SMS

    Fast2SMS is a well-known mass messaging service that specialises in sending DLT (Distributed Ledger Technology) SMS for promotional, advertising, OTP, and API messages. They also provide other services, such as scheduling your messages for delivery at a specified time or distributing them frequently at predetermined intervals.

  • Gupshup

    Gupshup is one of India’s leading Transactional bulk SMS providers. Leading BFSI, retail, and e-commerce organisations use the company’s SMS, email, voice, USSD, and IP messaging and chatbot creation services.

  • Text Local

    Text Local is one of the most popular and well-known bulk texting services. It helps in increasing revenue while prioritising client happiness. Text Local helps in handling messaging campaigns, OTP service, and other fast notifications and two-way interactions.

    Text Local’s services are used by both large and small businesses. The program assists small enterprises in sustaining themselves and increasing their sales while also connecting them with customers.

  • Exotel

    Exotel SMS service provider is used by enterprises, startups, and small and medium businesses. The software allows you to send SMS to almost 190 countries worldwide. Exotel’s SMS delivery service is used by leading brands such as RedBus, 1MG, Ola, and others.

  • 2Factor

    2Factor is a dependable SMS gateway with pay-per-sent OTP that is predicted to be delivered in 2 to 6 seconds. Transactional, promotional, phone verification and two-way SMS APIs are all available from the company.

    It also protects the user’s privacy and offers a proprietary routing algorithm for rerouting failed communications through backup operators.

Suggested Read: Best Instant Messaging Software for PC & Mobile

How to Send Transactional SMS?

Top transactional SMS service providers in India allow you to send transactional SMS to your audience by creating workflows as per the purpose. Steps to send transactional SMS are:

  • Create a triggering event on the Event Manager that will start the message flow.
  • Make a starting point for the flow.
  • Add an “SMS” element to the mix. Change the wording and the sender ID. Keep in mind that your sender ID may need to be registered in some countries.

Difference Between Promotional and Transactional SMS

Promotional and Transactional SMS are two different sorts of SMS messages that serve key business objectives. However, the intent of these two types of SMS are different. Here’re the major differences between promotional and transactional SMS.

  • Purpose

    Promotional SMS – It includes offers, discounts, sales coupons, or other promotional materials and is sent to new or existing clients. The communication is unsolicited; sending them to clients who have opted for your marketing messages is recommended.

    Transactional SMS- It comprises both sensitive and non-sensitive information such as notifications and order details, as well as one-time passwords (OTP) and payment updates for automated invoicing. Transactional messages are often not utilised for marketing purposes and aims at customer relationship building.

  • SMS Recipients

    Promotional SMS- You can send such messages to opt-in consumers and non-DND (Do Not Disturb) phones.

    Transactional SMS- It can be sent to all registered clients, regardless of whether they have opted for the DND mode.

  • SMS Scheduling

    Promotional SMS – It is sent between 9 AM and 9 PM, although it is subjected to local rules.

    Transactional SMS- It has no time constraints.

  • Example

    Transactional SMS examples include welcome messages, billing & payments, delivery status, etc.

    Promotional SMS includes event notifications, flash sales, sale reminders, seasonal offerings, etc.

    “Get discounts on delectable lunch dishes and get a 2% discount on your next order by texting “LUNCH” to (phone number). Your Everyday Meal.”

Suggested Read: Text Messaging for Customer Retention: Everything You Need to Know


Businesses that focus on improving their client experience by using rich communication techniques should use transactional SMS. Transactional SMS is a more cost-effective, faster, more dependable, and more convenient form of communicating with your consumers than other methods. It provides a well-defined customer engagement practice that keeps your company ahead of the competition.


  1. How to send transactional SMS?

    You can use any service provider like Exotel, GupShup, Factor 2, Text Local, etc. SMS can be sent in bulk via the software interface of the service you opt for.

  2. What is transactional SMS service?

    Transactional SMS service is the use of automated text messages for sharing important updates and other information related to a service or product by a business 24/7.

  3. What are the types of messages?

    There are several types of messages such as SMS (transactional/ promotional), MMS, in-app messages, push notifications, etc.

  4. What is transactional bulk SMS?

    Transactional bulk SMS is used to refer to the automated messages sent by businesses to multiple customers in a short period of time to communicate any vital information about the service or product that they use.

Related Categories: Bulk SMS Software | Lead Generation Software | Instant Messaging Software

Published On: March 16, 2022

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