A2P SMS Market Size, Share, Trends, Growth and Forecast 2030

A2P SMS Industry Prospective:

The global A2P SMS market size was worth around USD 66.91 billion in 2022 and is predicted to grow to around USD 79.00 billion by 2030 with a compound annual growth rate (CAGR) of roughly 2.10% between 2023 and 2030.

Request Free Sample

A2P SMS Market: Overview

A2P SMS stands for application to person short message service. A2P is a messaging system used primarily by businesses and enterprises to create a one-way communication channel with existing customers and potential clients. In this messaging technique, a company or a service provider sends texts to the intended mobile number using a software application used by the firm. A2P SMS is a method of marketing or advertising and is known to be extremely efficient in terms of consumer engagement since as per official statistics around 98% of all people open text messages to read the content. In recent times, with the growing sale of consumer electronic devices and the increasing use of digital systems, the A2P SMS method has grown rapidly. It is used in a wide range of end-user verticals including healthcare, telecom, banking, retail, e-commerce, and others. Several recent adaptations made to A2P messaging are likely to drive A2P SMS industry growth during the forecast period.

Key Insights:

• As per the analysis shared by our research analyst, the global A2P SMS market is estimated to grow annually at a CAGR of around 2.10% over the forecast period (2023-2030)
• In terms of revenue, the global A2P SMS market size was valued at around USD 66.91 billion in 2022 and is projected to reach USD 79.00 billion, by 2030.
• The A2P SMS market is projected to grow at a significant rate due to the growing applications in BFSI sector to prevent fraud
• Based on end-user segmentation, BFSI was predicted to show maximum market share in the year 2022
• Based on application segmentation, promotional campaigns was the leading application in 2022
• On the basis of region, Asia-Pacific was the leading revenue generator in 2022

Request Free Sample

A2P SMS Market: Growth Drivers

Growing applications in BFSI sector to prevent fraud will drive market growth

The global A2P SMS market is projected to grow owing to the increasing application of the messaging method in the banking, financial services, and insurance (BFSI) sector. Banks and other financial institutes use A2P SMS to create a safe banking environment for their customers. These units send regular updates to the customers about changes in policies or alerts against prevalent fraud. In addition to this, A2P SMS provides a crucial protection wall against financial fraud. Almost all banks and financial companies send authentication messages to their clients in case the slightest activity is encountered in their bank accounts. It includes alerting consumers about deposits or debits. Furthermore, authentication text with a one-time password (OTP) is sent to mobile numbers while logging into digital accounts such as when using net banking for any transaction. Financial companies are the most vulnerable to digital fraud. A recent report claimed that India loses almost INR 100 crore every day due to banking fraud.

Rising purchases through online sales channel to create higher demand

With the surging popularity of e-commerce websites and online sales platforms such as company or third-party websites, the demand and use for A2P SMS platforms has increased at a tremendous pace. When making all purchases, almost all forms of communication are conducted using messaging services initiated by the business. It includes payment authentication, order confirmation, and order tracking number until final delivery. Additionally, since almost all online platforms gather mobile numbers from buyers, the information gets permanently stored in the company’s database which means they can continue to use these numbers for sending new product recommendations, information about discounts, and other offers.

A2P SMS Market: Restraints

Rising incidents of fraudulent A2P SMS may restrict market growth

The global A2P SMS market growth is expected to be restricted owing to the increasing number of cases regarding fraudulent A2P SMS. These automated messages mimic communication sent from legal entities such as banks or service providers but the content contains links to external scam websites. In September 2023, the citizens of India were warned against online fraud related to credit card reward points where scammers were sending phishing links to people using the A2P SMS method. A 2022 report by the Federal Trade Commission (FTC) suggested consumer loss of USD 8.8 billion.

A2P SMS Market: Opportunities

Growing strategic partnerships between market players to create high-growth opportunities

The A2P SMS industry growth is likely to be promoted owing to growing strategic partnerships between technology companies and end consumers. A2P SMS service providers are working on providing more advanced and secure solutions while adapting to the needs of the current market filled with scams and fraud. In September 2023, Avochato, a leading company in advanced messaging software services, announced the addition of a new and innovative feature to improve SMS compliance for A2P 10 Digit Long Numbers (10-LDC). The latest feature will help the client navigate through the complex web of compliance guidelines and regulations. In August 2023, Route Mobile announced its partnership with Vodafone India. The latter will provide A2P SMS monetization solutions to the cloud communication platform (CPaaS). May 2023 witnessed the launch of 365messenger by 365squared, a high-end managed services provider catering to the needs of mobile network operators. 365messenger is a cloud-based enterprise messaging platform processing over 900 billion SMS every year with a scaling feature.

Deepening hold of Internet of Things (IoT) technology may create expansion possibilities

The growing penetration of IoT technology across industries especially in the consumer electronic segment could create higher growth possibilities for A2P SMS solution providers as it can be leveraged to connect devices and send important notifications.

A2P SMS Market: Challenges

Customer exhaustion with excessive A2P SMS is a challenge that needs more attention

With almost all businesses using A2P SMS to communicate with their clients, there is a growing trajectory of customers being overwhelmed with excessive A2P SMS every day. These messages can lead to frustration and irritation among people especially when they are preoccupied with urgent matters. Another key challenge for the global A2P SMS market players is the statutory compliance guidelines that vary from one region to another. It includes the kind of content that can be shared, the timing and frequency of messages, managing consumer data privacy, security, and other essential protocols.

A2P SMS Market: Segmentation

The global A2P SMS market is segmented based on end-user, application, and region.

Based on end-user, the global market segments are healthcare, retail, hospitality, entertainment, BFSI, travel & transport, and others. In 2022, the highest growth was witnessed in the BFSI segment due to the increasing application of A2P services for sending alerts and transactional information. The growing number of financial transactions every day on a global scale requires entities operating in the BFSI segment to deploy the advantages of A2P SMS solutions. The travel & transport sector is expected to grow at a rapid rate due to increasing global tourism. In 2022, the tourism industry was valued at USD 10.7 trillion.

Based on application, the A2P SMS industry segments are interactive services, promotional campaigns, customer relationship management (CRM) services, pushed content services, and others. In 2022, the promotional campaigns segment was the leading revenue generator due to the growing use of technology by businesses to promote products and services. These messages contain information about ongoing or upcoming offers, discounts, schemes, or other relevant data. The CRM services segment is equally important due to its extensive application in the BFSI and e-commerce sectors. As per official data, around 53% of regular buyers on Amazon, an e-commerce website, purchase at least 1 item per week.

A2P SMS Market: Report Scope

A2P SMS Market: Regional Analysis

Asia-Pacific to witness the highest growth rate

The global A2P SMS market will be dominated by Asia-Pacific during the forecast period. The region has an exceptionally large consumer base in terms of small and large-scale companies operating in the Asian market. In addition to this, the number of clients that these businesses cater to is surging at a rapid rate owing to the growing population. For instance, India has a population of 1.4 billion people which automatically translates to an extensive pool of potential receivers of A2P SMS. In addition to this, Asian countries have a high rate of financial transactions per day. Official statistics state that India leads in terms of daily transactions with 41 million real-time financial transfers driven by high penetration of Unified Payments Interface (UPI) technology. The increasing use of A2P SMS by telecom companies and network providers has resulted in higher regional growth in recent times. Growth in North America is expected to be a result of a high number of solution developers as well as growing demand in the healthcare and BFSI sectors. The rising international partnerships undertaken by regional players could work in the favor of North America.

A2P SMS Market: Competitive Analysis

The global A2P SMS market is led by players like:

• Nexmo
• Twilio
• MessageBird
• Sinch
• Tata Communications
• Infobip
• Global Message Services (GMS)
• Plivo
• Voxox
• OpenMarket
• Clickatell
• Route Mobile
• Tyntec
• Syniverse
• CM.com

The global A2P SMS market is segmented as follows:

By End-User

• Healthcare
• Retail
• Hospitality
• Entertainment
• BFSI
• Travel & Transport
• Others

By Application

• Interactive Services
• Promotional Campaigns
• Customer Relationship Management (CRM) Services
• Pushed Content Services
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa