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The Complete Guide to Using SMS for Debt Collection

BONUS MATERIAL: Learn how FinTechs use SMS for debt collection

Late payments from customers are a headache for any business. When money doesn’t arrive in the business bank account on time, substantial cash flow problems can occur. But how can you get customers to pay up quickly? Many of our clients use SMS for debt collection with great success. Discover why SMS is so effective for chasing money owed and learn how to get started below.

Why use SMS for debt collection practices?

Persuading customers to pay their bills on time is often challenging, time-consuming and expensive. Typically, debt collection starts with reminders, either by phone or in writing. If reminders don’t work, and once several missed payments are due, the debt is usually passed on to a debt collection agency that charges a fee for debt recovery. More costs are involved if the debt goes to court.

In an ideal world, it’d be great just to send one or two reminders to receive payment before debt collection costs start to escalate. But the problem with phone calls, letters and emails is that they can easily be ignored by customers. Phone calls can be instantly diverted to voicemail, while emails and letters can seemingly ‘go missing’.

SMS is much harder to ignore because it’s a more direct channel of communication. 98% of texts are opened, whereas the average email open rate is 21.33%. Texts are delivered more or less instantly, and better still, 90% of people read texts within three minutes. So using SMS could mean you receive payments more quickly into your account than with other debt collection methods.

Another benefit of SMS is that (providing you use an SMS provider) you can text all your debtor customers simultaneously, rather than phoning them one by one – a huge time save.

Additionally, SMS can be received on any mobile phone (smartphone or not), and transmission doesn’t rely on wifi. Through your SMS provider, you should be able to track your campaigns to verify that your messages have been delivered.

Finally, SMS is considered an affordable channel, compared to phone calls. With Messente, for instance, you only pay for the text messages you send. To give you an idea, it’d cost just 3.24 € per month to send 200 one-way messages to the United States. View Messente’s pricing by country here.


You can use SMS to:


  • Remind customers that payment is due.

  • Request that customers update their payment method.

  • Thank customers for making a prompt payment.

  • Inform customers that you’re taking legal action due to default accounts.

  • Educate customers about the impact of late payments, and more.


Woman using smartphone behind laptop

Successful SMS debt collection strategies

Here at Messente, we’ve conducted our own research into using SMS for debt collection as part of our whitepaper, The Inner Workings of Leading FinTech Companies: Complete Customer Journey with SMS. As such, we’re able to share with you some real-life SMS debt collection strategies.

1. Send an SMS on the customer’s payment due date

According to one of our clients, sending an SMS on the customer’s actual due date leads to the majority of payments being made on that particular day.

2. Send SMS payment reminders in advance

Another approach that seems to work well is sending out the first payment reminder a week before the customer’s bill is due, followed by a second reminder a couple of days before the due date. Once the due date has passed, a third reminder is sent. This process can be automated, providing you integrate your SMS messaging app into your CRM system.

3. Include the numbers in your message

To maximise the impact of a debt collection SMS, a good approach is to include the amount owed within the text, plus instructions on how to pay (e.g. directing the customer to an online payment portal). Seeing how much money is owed can prompt the customer to bring their account up to date.

4. Consider using SMS alongside phone calls

Many of our clients use a combination of text messages and phone calls to chase debts, but one relies purely on SMS because it’s a less aggressive approach and their customers appreciate that. Your own strategy will depend on the types of customers you have and how they interact with your communications. Keep testing your SMS strategy to see what works best.

How to start using SMS for debt collection

Getting started with SMS is simple when you use Messente’s SMS API. It can be integrated into your business system within a day with the help of a junior developer. Our Quickstart Guide enables you to start using Messente in minutes. Just three steps are needed:


1. Sign up to Messente (free) and receive your API keys.

2. Apply for a Sender ID, which can be your own phone number, a branded Sender name, or a dedicated shortcode or long code number.

3. Make an API request using your API keys to send your first text – this is something your developer will be able to do easily using our documentation.

4. Alternatively, if you don’t want to integrate Messente into your own system, you can send text messages using Messente’s user-friendly online dashboard. You’ll see the dashboard when you sign up to create your account.

SMS debt collection templates

To help you get started with SMS for debt collection, feel free to copy, paste and tweak our templates below, according to your requirements.


Hi [Name]. Just a friendly reminder that your [Month] bill is due on [Date]. Pay early for peace of mind. Make a payment now: [URL]


Hi [Name], your payment of [Amount] is due today. Pay online or call us on [Number]. [URL]


Hi [Name], our records show that your payment of [Amount] is now overdue. Please pay asap to avoid your account going into arrears. Pay online: [URL]


Urgent! Your payment of [Amount] is now overdue by [Number] days. To avoid damage to your credit rating, make a payment now. [URL]

Debt collection SMS example

Hi [Name], we need to inform you that your account is now in default, and we are passing your debt to a collections agency.

Hi [Name], we’ve tried to contact you multiple times to request payment. The next step is court proceedings. Further details to be sent by post.

Hi [Name], we’ve written a blog about the effects late payments can have on your credit score. Read it here. [URL]

SMS: an effective approach for debt collection

If your customers aren’t paying, SMS is an excellent tool to have in your arsenal to help you recover debts. Text messages are convenient, fast and direct. And they can make customers feel more comfortable too – no one likes being chased down for payment, and debt collection phone calls can feel somewhat discomforting.

SMS can enhance your debt collection processes to improve cash flow, increase customer satisfaction and help you meet financial objectives. Getting started couldn’t be easier with Messente – create your free account today.

Taavi Rebane
2021-07-06 00:00:00 UTC
2339274