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A2P: How businesses and customers are talking to each other

SMS was once described by Vodafone founder, Sir Chris Gent, as “the closest thing to pure profit ever invented.” But, a lot has changed since then. As person to person SMS moves into decline, another form of SMS is rapidly growing.

The Application to Person (A2P) SMS messaging market has been on the rise for the past few years as both enterprise organisations and service providers turn to this form of messaging to enhance customer experience and consequently their engagement. This two-way communication Messaging Market between businesses and their customers is only expected to continue growing, in fact according to recent analyst reports this market is set to grow from $55.49 billion in 2016 to $71.60 billion by 2021.

A2P messaging services have been used across various industries, including Government, IT and Telecoms, Healthcare, Travel and Tourism and Retail and eCommerce to name just a few. Out of all of these, the Retail and eCommerce vertical is expected to hold the largest market share due to the constant growth in the number of internet users, the rapid rise of smartphones, and the increasing number of tech-savvy consumers.

In my mind, increased mobile marketing by both marketers and application developers as well as the overall growth in mobile payments and banking applications have also contributed to the rise of the A2P and P2A messaging market. In fact, the MEF Mobile Messaging Report 2016, stated that its successful employment within the financial services sector helped lead to this recent growth.

Mobile messaging allows consumers to access their banking anytime, from anywhere and the data shows that 33 per cent of people received at least one text in the last month from a banking/financial institute. There are perhaps two reasons for this. Firstly, one-time password texts form an important part of bank authentication. But secondly, alerts replace more traditional and slower physical communications, such as letters sent out to inform customers that they are nearing their overdraft limit. In 2015, The Financial Conduct Authority (FCA) said signing up to text alerts and mobile apps actually reduced customer overdraft charges and provided them with better insight into the day to day management of their accounts.

Healthcare within the UK is another sector that has also seen a boost in A2P adoption. The provisions for both patients and providers in cheaper and automated processes make this a viable option. Text messages can be automated, therefore are cheaper, more convenient and less likely to be missed than phone calls. Embracing the messaging system allows for appointment reminders, medical pickup notifications and general health campaigns to be accessed directly by the individual at a faster, more reliable rate. The UK is the most enthusiastic adopter with 33 per cent of us having already corresponded this way. 

A2P messaging is continuing to grow and the optimism surrounding its uptake no doubt comes from ease of integrating SMS. Many companies are now building apps that send messages and alerts through the software. This has empowered the companies, whilst also eliminating painstaking negotiations with mobile network operators or aggregators. The growth towards conversational commerce or, ‘bots’, will allow for further development, with conversations taking place between customers and business in real time. Facebook Messenger represented the company’s leap into conversational commerce by turning its popular Messenger app into a business messaging tool. Launching a full chatbot API has allowed businesses to create interactions for customers to occur within the Facebook Messenger app. Individuals are now able to order flowers, browse the latest fashion and make purchases, or even request an Uber, all from within a Messenger chat.

Conversational commerce represents the next phase of brand communications and makes messaging apps even more central to people’s day to day lives. Whilst Over-The-Top (OTT) services like WhatsApp, Facebook Messenger, and WeChat are seen as a threat to A2P, I am a firm believer that the Application to Person (A2P) model will become the preferred choice for both businesses and consumers.

Businesses continually strive to find new and effective ways to reach their audience and, due to the ease of adoption and in-built reliability of SMS, A2P is the perfect solution for effective two-way communication.

Gillian Hughes, VP Marketing, Veoo

Image source: Shutterstock/Bloomicon