The coronavirus pandemic struck in the first quarter of 2020 and completely restructured the society, affecting the telecommunication sector in an entirely different way altogether. Even though there was a dip in commercial SMSs initially, due to an urgent need of a customer friendly yet contactless business, transactional SMSs witnessed a significant hike. The marginal drop was the result of a crunch in the travel and tourism, aviation, retail, and other such sectors. However, according to the global consumer sentiment surveys carried out by McKinsey & Company, consumers are turning to digital and reduced-contact ways of accessing products as the need for safety has considerably increased in the (post) pandemic era. In the US, this trend has been enhanced by Gen Z, millennials, and other consumers in general. Due to this increase in demand for a contactless and safe service, various sectors have adopted transactional SMSs for their business.

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Transactional SMSs have a high potential in the industry and their demand has witnessed a significant raise despite an upsurge in the duty. Commercial SMS traffic has visibly increased with an estimate of 1.3 billion messages per day towards the end of last year, whereas in the beginning of the pandemic the figure was around 1.1 billion.

According to a new market study on Telecom API published by Global Industry Analytics Inc., presented the global market for Telecom API estimated at $170.3 Billion in the year 2020, is projected to reach a revised size of $435.6 billion by 2026, growing at a CAGR of 16% over the analysis period. Messaging API represents a key segment here with SMS, MMS, and RCS being analyzed to grow at a 17% CAGR (compound annual growth rate) to reach $169.5 billion by the end of the said period.

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This prominent growth in transactional SMSs has stemmed out of a rise in e-commerce, digital payments, and banking during the subsequent phases of lockdown and post-lockdown. As reported by Business Wire, the U.S. government’s focus is on improving the rules for bulk SMS across the country which in turn has boosted the demand for bulk SMS marketing leading to an increase in adoption of transactional SMS across various industries.

Considering the wide range of statistics mentioned above, with the growth curve of transactional messages on a rise, the words of Shubendra Agarwal of MSG91 stands true as he remarks, “Transactional SMS will continue to account for the largest part in SMS volumes and will potentially increase through traffic from sectors like banking, government, e-learning, etc. in the coming years.”

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