Demystifying SMS in the US
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In the US, all messages generated by an application must be sent over a Short Code. The process to procure a Short Code can take you anywhere from 8-12 weeks and cost you thousands of dollars before your first message is ever sent. Learn how to avoid potential pitfalls in your application process and even begin sending Short Codes messages in under a week with Nexmo’s Preapproved Short Codes.
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Demystifying SMS in the US
- 1. Demystifying SMS in the US James Winter
- 2. 2 SMS Is the Backbone of Many Business-Critical Communications Security Alerts and Notifications Product Information Subscriptions and Updates Marketing
- 3. 3 In the US, SMS Communications from Applications Must Be Done Using Short Codes Application-to-Person (A2P) messaging is SMS messaging initiated by a machine, program or system and sent to a personal handset. Person-to-Person (P2P) messaging is defined simply as a message being sent from a person. Companies sending A2P messages using long numbers instead of Short Codes will have their traffic shut down without notice.
- 4. 4 High message volume throughput No daily message limit Easier to remember Expensive: $3,000 per quarter Strict Opt In Rules & Fines Lengthy Procurement Time What Is a Short Code? Short Codes are 5-6 digit numbers that have been specified by the carriers to be used for application to person messaging Characteristics Short Code
- 5. 5 Example Short Code Scenarios Two Factor Authentication Secure your app with SMS authentication in minutes. Alerts With a 95% read rate in minutes, SMS is the best way to get your users important information. Marketing SMS marketing is a great way to get your users information on deals and new products.
- 6. 6 Example Long Code Scenario: Two-way User Communications Airbnb utilizes long virtual numbers to enable easy communication between renter and rentee No personal information exchanged No international texting fees Familiar experience Platform Agnostic
- 7. 7 Short Codes vs. Long Codes Short Codes A2P messaging: Action resulting in SMS being sent initiated by a machine/program One to many High throughput 5-6 digits Case by case approval process, 8-12 weeks minimum $1,000-$1,500 per month Type of traffic allowed Use Case Throughput limit Number of Digits Acquisition Process Cost Per Month Long Codes P2P messaging: used for communication between two people One to one 1 SMS per second per number 10 Digits Simple, no approval required, Instant through an API $1 per month
- 8. 8 Obtaining Short Codes Can Be Complex and Time Consuming 8-12 Weeks Application Process Recurring Quarterly Fees Compliance Requirements
- 9. 9 Short Codes Are Expensive, with Both Fixed and Variable Costs Costs of Obtaining a Short Code On Your Own $3000-$5000+ • Administrative costs to learn application process and carrier regulations • Time required to complete the application • Time required to follow up with carriers • Monthly charges per messages sent • Charges begin upon application submittal • $1,000-$1,500 minimum monthly fee • Monthly charges per messages sent Hidden Costs Upfront Costs and Set Up Fees Costs of Obtaining Short Code on Your Own
- 10. 10 Dedicated Short Code Application Process with Nexmo
- 11. 11 Common Application Mistakes Not providing a functional SMS terms and conditions URL for carrier review. Not providing a minimum of two forms of customer support information. Missing required language in confirmation replies such as Reply STOP to cancel, HELP for help. Not having a consistent message frequency between SMS message flow and webpage. Website not having bolded STOP & HELP terms on the website.
- 12. 12 Two Forms of Short Codes Are Available Preapproved 1-2 days $0 $0, Pay per message Simple Marketing, Alerts, 2FA Pay as you go Time-to-Market Setup Cost Monthly Charges Application Process Use Cases Contract Length Dedicated Short Codes 8-12 weeks $3,000+ $1,000, Pay per message Complex Any, repeat application process for each one Quarterly, 3 months minimum
- 13. 13 Preapproved Short Code Solutions Can Help: Improve Time-to-Market Nexmo can get you up and running with a compliant solution in 48 hours instead of 8-12 weeks minimum. Lower Your Costs Nexmo only charges you for the messages you send. Agility Preapproved Short Codes give you a truly agile solution that allows you to adapt to changing market needs. Marketing Utilize the high engagement rate of SMS to ensure your message is received by your customers within minutes. Alerts Send your users account notifications, warnings, or other types of conditional alerts. 2FA Use preapproved codes to validate your user base, and prevent fraud. USE CASES
- 14. 14 Resources US Short Code FAQ http://www.usshortcodes.com/about-sms-short-codes/sms-marketing- faqs.php#.VEV2Vot4qG4 Best Practices http://www.mmaglobal.com/files/uploads/Consumer-Best-Practices.pdf Infographic On The Power of SMS http://www.usshortcodes.com/docs/marketing-and-sms-infographic.pdf
- 15. Questions?
Editor's Notes
- Hello everyone and thank you for joining todays webinar on demystifying SMS in the US. My name is James and I’m the North America Product Marketing Manager for Nexmo’s SMS Solutions. This session will be focused around clearing up some of the confusion and misunderstandings around sending SMS to the US. This is one of the most common frustrations that we encounter so I’m looking forward to hopefully clearing things up for you all. I’m going to try and keep this fairly short, around 20 minutes, in order to leave plenty of time for questions at the end so I hope you think up some good ones. <Click>
- Businesses are recognizing that using application-to-person SMS for business critical communications is an essential and agile way of connecting with their customers in the mobile age. Due to its fast and consistent open rate, SMS can be used for many different purposes such as verifying identities, providing time sensitive alerts and notifications, sharing new product information and more. Consumers and end users are used to a world in which they have information available to them at all times, and expect a consistent and smooth user experience. Delays in critical information lead to decreased conversions, lost revenue, and user turnover and abandonment. Businesses are finding that without SMS notifications, it is difficult to engage effectively in this increasingly mobile world. Unfortunately, A2P messaging is heavily regulated in the United States so businesses must be careful in how they set up and use this tool. First though, we need to make a distinction between the two types of traffic that the carriers in the US have outlined. <click>
- Application-to-Person (A2P) messaging is SMS messaging initiated by a machine, program or system and sent to a personal handset. Person-to-Person (P2P) messaging is defined simply as a message being sent from a person to another person According to the carriers’ guidelines, all A2P messages can only be done over a short code managed by the Common Short Code Association. Technically, you can use a long number for your messaging, but if you are caught, your traffic will be blocked by the carriers filters without notice. Unlike most of the world, the US carriers charge their customers for inbound text messaging and so opt in/opt out becomes very important to prevent being charged for unwanted messages. The US carriers were afraid that they might get sued if customers didn’t have a way to control the flow of messages to their handsets. The carriers solution was to over-regulate the process, making it complicated and expensive for businesses to implement an SMS solution. The Common Short Code Association (CSCA) was founded along with a set of guidelines that businesses would have to conform to in order to send A2P traffic.
- Short Codes are 5-6 digit numbers that have been specified by the carriers to be used for application to person messaging. A2P SMS is one where an SMS message is sent from an application — typically a web app to a mobile subscriber. One example many of you would be familiar with is receiving one time use passcode via SMS. In this situation, it is a service, sending the same message out to many different people who have requested access to an application. Short codes are capable of sending many SMS per second, have no daily limit, and are much easier for customers to remember than long numbers. Unfortunately they can be expensive, restrictive in their opt in rules, and take months to provision. If this message were sent out over a long number, the number would most likely be shut down if there were more than a few hundred subscribers.
- Many of the messages that our customers come to us to send that would be classified as A2P, can be categorized according to three broad types: 2FA, Alerts, and Marketing. 2FA is a very common use case these days for applications who require additional security either in contextually important transactions such as account password reset, or verifying a users information is correct when signing up for a service. Alerts: While many apps have been turning towards in-window notifications or push, SMS remains an important and viable solution. Some of the main benefits of SMS alerts are that: its platform and device agnostic and will work universally in a familiar user environment, doesn’t depend on data to be delivered, and grabs attention whether you are in the app or not. Marketing: While it is very dependent on the country, many businesses utilize the high read rate of SMS in order to engage with their customers in a highly personalized way. Sale announcements, coupon codes, and store information are all common marketing use cases for SMS.
- In contrast to Short Codes, Long numbers are used for person to person messaging. The recipient and sender on each end of the communication is a person attempting to communicate with another person. Long numbers are cheap and easy to obtain but are limited to sending one SMS per second. As I mentioned before, the carriers use filtering techniques such as looking at the number of messages sent per day, and analyzing the balance of inbound to outbound messages in order to look for non p2p use cases and block them.
- The three biggest drawbacks that often frustrate customers when attempting to send SMS in the US are the long application process, high monthly administrative fees, and difficult compliance requirements. Lets look at some of the factors that make obtaining a short code a 12 week process.
- The costs are not only the up front fees, but also includes significant hidden and administrative costs associates with managing a short code. You have costs such as the monthly cost of ownership and a per-message-sent bill. It costs 1000-1500 dollars a month and you start paying this the moment you submit your application. So you end up paying around $3,000- $4,500 dollars even before your application is approved. The application process is not a submit once, forget about it, and get approval 8 weeks later, it is an process which requires active participation. Each time a carrier rejects your application, the time-to-market is extended by 2-3 weeks, meaning whoever is managing your application process could be stuck with it for well beyond the average 8 week time frame. Remember that in order to be compliant, you have to go through this process for each use case, making it very difficult to add a service and scale your business quickly. <Click>
- Nexmo and other SMS aggregators can help you through the process by lending you expertise by guiding you through the process so that you don’t have to learn it on your own.
- Nexmo offers two types of short codes for customers depending on what their needs are. For customers who are looking to send one-way only traffic for certain use cases, we recommend one of our preapproved Short Codes due to their nonexistant fees, short time to market, and simplicity. Preapproved Short codes are short codes which Nexmo has provisioned on behalf of multiple customers ahead of time. The main advantages of a dedicated short code include branding and no restrictions on how you can use your messaging. Preapproved are generally limited to certain use cases, like Marketing, Alerts and 2FA. Dedicated numbers can be used in whatever capacity your business might want but you have to apply for each use case separately, greatly extending your time-to-market as we have previously discussed.
- Nexmo has three A2P solutions that can help you improve your time to market, lower your costs and give your business the agility they need to adapt to customer demands.