How To Compare SMS API Pricing for Value and Savings

Posted on August 15, 2022

Consumers and businesses want to be able to communicate quickly and easily. Studies show that 93% of consumers prefer to send and receive text messages with local businesses. For many companies, meeting consumers’ demands for text messaging means integrating SMS into their app or CRM.

Text messages are more personal and are more likely to be opened by the recipient. If you are a CIO or developer, your company or client may ask you to find an SMS API provider to integrate SMS into their software. When selecting an ideal SMS API provider, comparing SMS API pricing to find the subscription model that suits your company or client’s needs is crucial.

SMS API providers offer various subscription models and pricing plans to suit businesses and organizations with distinct needs. This blog will discuss metered and flat rate SMS API pricing, vital considerations when examining SMS API providers’ offerings, and questions to ask the company before finding an SMS API provider to integrate into its software.

Why Does SMS API Pricing Matter?

When selecting an SMS API provider, pricing can be critical to integrating the SMS API into your client or company’s software. Your client or company may have provided you with a budget but finding an excellent SMS API provider with simple and transparent pricing can help you exceed their expectations. SMS API pricing is critical to you as the developer and your company or client for the following reasons:

  • Maintain your client or company’s budget
  • Help provide a clear path towards scalability
  • Simple and transparent pricing avoids cost issues
  • Choose an SMS API provider that offers tangible value

Metered Vs. Flat Rate SMS API Pricing

The primary distinction between SMS API pricing between providers is whether the provider offers metered or flat rate pricing. While a flat rate may seem like the most transparent pricing option, it can result in overpaying for more messages than your app or software consumes.

API providers that charge a flat rate offer a limited number of messages each month or annually. An SMS API provider that offers a flat rate can be beneficial if the company only expects to use the app for a set number of messages each month.

When an API provider offers metered rates, the client pays only for the text messages they sent or received. Typically the price per message is a fraction of a cent, and you only pay for the number of messages sent during a month or pay period.

Most companies would benefit from a metered subscription because it allows the service to scale with the company’s needs. It can be advantageous if the company has peak seasons or wants to launch short campaigns throughout the year, where their monthly messages would significantly increase during that time.

Monthly Vs. Non-Recurring Charges

When comparing SMS API pricing, highlighting monthly recurring charges (MRC) and non-recurring charges (NRC) can help you find a cost-efficient SMS API subscription for your client or company. An API provider should be transparent about MRC and NRC.

Typically start-up and cancellation fees come with an NRC. A metered SMS API subscription will only charge you for the messages sent and received per month, but there may be MRCs for each phone number, including ported phone numbers. Choosing an API provider that does not charge set-up fees can help you save money for your client or company.

Considerations When Selecting an SMS API Subscription

Selecting a plan that meets your pricing needs is the first step in finding a cost-effective SMS API pricing plan. When comparing different SMS API providers, consider the following value factors.

Types of SMS/MMS and Carrier Fees

Carriers classify each type of SMS traffic differently. Most API providers allow a company to choose to send messages via a 10-digit long-code (10DLC) or toll-free SMS number. The type of number you or your company chooses will depend on the type of messages the company sends. The number also affects carrier fees and cost-per-message from the API provider. 

Toll-free SMS allows the company to send short messages quickly and reliably throughout a large geographic area. It can be ideal for two-factor authentication (2FA) or updates and alerts. Toll-free messaging can cost more per message and often has an additional carrier fee in the USA and Canada.

If your company or client will use SMS/MMS for sales or customer support in a local area, a 10-digit long-code number is an ideal choice. It is similar to a local mobile number, but its traffic is registered as application-to-person (A2P) to prevent the company’s messages from being filtered as spam. It allows users to have a two-way conversation, and the cost per message is lower than toll-free SMS. Carrier fees will vary when using 10DLC, with some carriers charging no fees and others charging a fraction of a cent per message.

Grey Routes

SMS API providers that do not eliminate or mitigate grey routes may not cost your client or company more money, but they may not give the company what they expect when they pay for the service. Providers that allow SMS traffic to be routed to grey routes can tag users’ traffic as peer-to-peer (P2P) to avoid fees. When your client or company pays for an SMS API—whether it be a flat rate or a metered subscription—they expect to receive A2P traffic.

A2P traffic includes toll-free and 10DLC SMS sent in high volumes. All traffic routed through an API provider from an app in the USA and Canada should be A2P. Other countries can be more flexible or stringent, depending on local regulations.

P2P traffic is for messages from one user to another using a local phone number. When an API provider uses grey routes to send A2P traffic as P2P, carriers can flag the high volumes of P2P traffic as spam, resulting in lower delivery rates.

Phone Number and Messaging Features

Whether your client or company already has their own toll-free or 10DLC number or will purchase a phone number from the API provider, they will need to pay a monthly fee. SMS API providers charge monthly for each ported phone number and each phone number purchased from the provider. SMS API providers offer vanity and custom business phone numbers to provide an identifiable or memorable phone number. Each number will typically be associated with a small monthly charge, but it can be a considerable cost if your client or company requires numbers in higher quantities.

If a company needs additional features and microservices for its SMS, it can also increase the overall cost of the subscription. A company can assign an identity to each phone number with a caller ID name (CNAM) for a per-use lookup fee. A mandatory E911 fee is also required by the FCC for each associated phone number.

Related: E911 in the Hybrid Workforce

Questions To Ask Your Client or Company

When comparing SMS API pricing, several considerations will depend on how the business plans to use SMS. Asking questions about the company’s needs will help you decide on an SMS provider that meets its needs and budget.

How Will You Use SMS for Business?

How the company will use SMS can be helpful in finding an SMS API pricing plan that will meet their needs. It can determine whether the company will need a 10DLC or toll-free SMS number, so you can choose an SMS API provider that offers the messaging type required at a fair price. Some API providers price 10DLC and toll-free SMS at the same rate, while others charge less for 10DLC.

If the company plans to have a two-way conversation with local users, 10DLC can be a money-saving option. Toll-free SMS is typically used for one-way messages over larger geographic areas with limited response options, such as opt-out options.

For example, a car dealership CRM may want to use 10DLC to invite customers to leave feedback on their recent purchase or service, but a national or regional banking app that strictly uses SMS for 2FA and alerts would benefit from a toll-free SMS number.

Do You Need Your SMS Service To Scale?

Certain companies need to scale their SMS use for a peak season or campaign and scale back down to their regular monthly use. If a company uses a monthly flat-rate subscription, this can mean switching plans and paying a fee or significant overage charges during peak usage times.

The company may also need to pay for messages they didn’t use if they choose a higher-volume subscription. A metered subscription can avoid frustrations, offering scaling to the exact number of messages needed during a month or period.

Related: Enterprise SIP Trunking: A Guide to Phone Numbers

Partnering With an SMS API Provider

When finding an SMS API provider to partner with, it is critical to compare SMS API pricing to find the provider that offers the service your client or company needs with a subscription model that offers value. Compare the subscription model each of your preferred providers offers, consider additional fees and your company or client’s distinct needs.

Flowroute offers metered SMS API pricing, so your company or client only pays for the messages they use. The messaging subscription scales with the company’s monthly usage, so they can launch new messaging campaigns and go through seasonal business changes without worrying about their monthly messaging costs.

Flowroute offers toll-free and 10DLC SMS with the reliability of the Flowroute HyperNetwork™ and transparent pricing for business phone numbers, porting, and SMS. If you are ready to partner with Flowroute, get started today.

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