Application-to-Peer (A2P) Messaging: A Beginner's Guide

Application-to-Peer (A2P) Messaging: A Beginner's Guide

SMS
Heba Eid
By
September 17, 2018

A2P, P2P, and SMS are just some of the terms that have bubbled up through the new messaging ecosystem that we live in today. With new apps and messaging tools springing up every day, people communicate faster than ever.

Some of the most significant tools in the intersection of business and communication fields include:

  • A2P: Application-to-Peer messages that are sent from automated services to humans.
  • P2P: Peer-to-Peer (or "Person-to-Person") messages that are sent between individuals.
  • SMS: Short Message Service that is limited to 160 or fewer characters.

People in the United States send more than 6 billion SMS messages every day. It has revolutionized the way that people communicate. (Technically, A2P is a subset of SMS, so Application-to-Peer messaging is also called "A2P SMS.")

While these phrases may seem like tech-jargon, they are reshaping the way that industries do business, and they represent a market that has grown by billions of dollars in recent years.

For a detailed look at how A2P messaging could help companies large or small, read on.

Uses of A2P

People may already receive A2P messages without even realizing it. Many businesses, such as banks, airlines, hospitals, and retail stores, use them to communicate with customers.

One subset of A2P is "transactional SMS." These are texts sent from a company to a client with updates about an appointment, service, or product. They might include an invoice for a toaster from Macy's or a reminder about an appointment scheduled later in the day.

A2P SMS is popular because it can reach any network worldwide.

Plus, A2P integral to the complex user-authentication procedures that underlie many of the security measures that companies use to keep accounts safe. When people ask to change their passwords, for instance, companies can send A2P SMS messages to verify identities.

Market Overview

All of those A2P pings on phones contribute to the technology's financial growth.

According to recent research, the A2P SMS market was valued at $55 billion (USD) in 2014, a figure expected to swell to $70 billion by 2020. The projection makes sense because SMS is the primary mobile-specific service that companies use to communicate with clients.

Today, people are comfortable getting text messages, whether they come from best friends or companies.

Studies have also found that customers will open SMS 98-99% of the time, making it a marketing tool with enormous potential. (By contrast, people open their emails just 20% of the time.)

The SMS industry is expanding throughout African countries, but its two most robust markets are currently in North America and the Asian Pacific. Communications companies are eyeing the latter region because of the huge populations of countries like India and China, which continue to sign up for mobile subscriptions.

With ample room to grow, there aren't any reasons to suspect that another messaging technology will replace A2P's convenience in the near future.

Drivers of A2P

One reason that the A2P market is expanding may be because it's in tune with today's communication trends. Research shows that people prefer short, personalized notifications to be short. A2P can match that preference easily.

Another built-in convenience of A2P messages is that they can be opened any time and read at someone's leisure. Unlike phone calls, A2P messages don't rely on individuals answering at the right time. This aligns with the preferences of U.S. adults, 64% of whom would rather interact with companies through A2P messages rather than by phone.

Among 18- to 34-year-olds, that figure is 76%. Considering that 90% of U.S. adults have their cell phones within reach at all times, the ability to communicate with more people via A2P seems like a marketing advantage oriented toward the future.

While some countries already rely heavily on smartphones and other devices that can use A2P, other areas of the world have not adopted the technology, yet. Companies, therefore, see plenty of opportunities to grow the technology's popularity by tapping into previously unused markets.

What does the Future hold for A2P messaging?

On that note, what's next for A2P? Market analysts predict a number of trends for the mobile messaging landscape, including:

  • Two-way SMS
  • The further growth of A2P
  • The development of Rich Communication Systems (RCS)

Essentially, RCS boils down to protocols that will be coded into A2P messaging to make them, well, richer communication systems. That might mean a "phone book" organizing function, or the ability to see which messages have been read already. The enhanced capabilities will make messaging even more convenient and useful.

The proliferation of this market, however, may lead to A2P scams, so communications operators will need to fine-tune sophisticated firewalls to block fake companies from sending fraudulent messages to their customers.

Nothing under the sun is new - except the internet. Many working adults can remember dial-up, or a time when they received notifications on typewritten letterheads. But the day has arrived when insurance files, wedding pictures, bank transaction histories, and other information gets stored in the cloud.

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