Become an SMS aggregator

Three Ways to Become an SMS Aggregator

Setting up your own business as an SMS aggregator is a great and at he same time challenging project. This profitable business creates value for telecom companies, entrepreneurs from other industries, and, ultimately, end-users. You can go for one of these three options if you decide to become an SMS aggregator:

  • Become an owner of an SMS Gateway (Acquisition mode)
  • Rent an SMS Gateway (Cloud mode)
  • Become a white-labelled reseller of an existing platform (Reseller mode)

The first option is recommended for those who have already been in touch with the telecom industry. Otherwise, renting or reselling are good alternatives to risky investments, because these options will give you the time to understand how the industry works. Eventually, you can decide if you want to switch from renting an SMS gateway to owning it.

In this blog post, we’ve highlighted the advantages and disadvantages of the three options.

If You Acquire a Custom SMS Gateway Software

Advantages Disadvantages
Profit is not affected by OPEX Experience in the industry is required
Control over the connectivity & hardware Higher implementation cost and CAPEX
Features flexibility An infrastructure is required
The system can be provider independent Practical know-how in signing beneficial contracts with MNOs and carriers
Control over costs and capacity as per demand At least one employee is needed to perform technical support tasks

If You Rent an SMS Gateway

Advantages Disadvantages
Reduced CAPEX and time to market Experience in the industry is a plus
Control over connectivity Increased OPEX (Monthly recurrent renting costs)
Upgrades assured by the provider Stable connectivity with a strong back-up is required
Level 3 support assured by the provider Practical know-how in signing beneficial contracts with MNOs and carriers
Control over costs and capacity as per demand At least one employee is needed to perform technical support tasks

If You Become an SMS Aggregator by Reselling an Existing Platform

Advantages Disadvantages
No need to be an expert in the industry Smaller profit net margin
It’s easier to become a reseller No control over connectivity options
No need for an infrastructure Smaller price flexibility
Technical issues are resolved by an external tech support Limited features
Requires smaller initial investments The system may be lacking scalability
Short time to market No influence over updates

 

These lists cannot be perceived lopsidedly. Someone can consider the expertise in the bulk SMS industry a huge advantage. The other will be satisfied by the limited number of features because those completely suffice current business needs. The perception of the lists is subjective and depends on the final goal.

If the goal is to sell big SMS packages to others or to offer a feature that other SMS aggregators don’t have, then you should explore the option of acquiring or renting a custom SMS gateway software. Alternatively, if the aim is to sell smaller SMS batches to clients that don’t use SMS extensively, then it makes more sense to become a reseller of an existing platform.

ROI, competition, pricing and client support are among business challenges you will have to face. You need to be prepared to deal with them.

ROI

This is the most important challenge. The ROI you will get is influenced by a set factors such as a well-developed strategy, the ability to grow volumes, networking, control over OPEX, CAPEX investments. Professionalism and level of your and team’s commitment will also influence your profits.

Competition

Good clients are not attracted only by the lowest price on the market. The level of support should be high for the customers to stay with you. Sign, and most importantly, stick to a detailed SLA with your customers to gain credibility and outrun your competition. In addition to that, follow industry trends to identify areas for innovation.

Pricing

Offering the lowest or the highest price without any strategy behind is not viable. Always aim for a price that is in line with market trends and your service quality.

Client Support

As mentioned above, professional support is a must for an SMS aggregator. If you decided to become an SMS aggregator by using a custom SMS gateway software, make sure that you train your customer-facing team members sufficiently because these people are the face of the company to a customer. Existing customers need to be so impressed that they will recommend your team to their business connections. If you enter the bulk SMS business as a white-labelled reseller, then make sure you choose a platform that has an experienced and responsive support team.

In case you decide to become an SMS aggregator, develop a detailed business plan that you can refer to when needed. Besides that, hire a strong team of professionals with a problem-solving mindset. And last but not least, as in any other business, be prepared for a lot of work that requires commitment and creativity.

Moving Forward,
DAS Solutions Team. 

Two-Factor Authentication Best Practices

A second layer of data protection is always a good idea, especially when you want to keep your customers safe from intruders. Authentication mechanisms that require only a username and a password are no longer intrusion-proof, as can be seen by recent experience at some internet giants who shall remain nameless. Your users will be safer if you implement a two-factor authentication system using an SMS gateway, and send customers one-time passwords (OTP) to enter your system.

Typically, one-time passwords are four- to eight-digit numerical codes that are valid for a short period of time, and only for one interaction, session, or transaction. They make authentication safer, because they are sent directly to the customer’s mobile phone. Authentication via OTP gained popularity across industries because it’s a cheap, easy to implement, and ubiquitous way to communicate with customers. The user does not have to install a third-party application to receive the one-time passwords, so it is also a very user-friendly option.

To set up OTPs, you will need an SMS gateway that supports this authentication method. It is configured to generate and send one-time passwords for the user via text. Some OTPs are generated based on time-synchronization, while others use mathematical algorithms.

Text-messages can be delivered in two ways: (1) you can attach a GSM modem to your server with a data cable, or (2) you can send messages through an SMS service provider. If you decide to go for the latter option, text-messages will first be sent to the short message service center (SMSC) of the service provider, and from there, based on connections with other SMSCs, the text-messages get sent to your recipients. For security reasons, setting up a VPN channel between the SMS Gateway and the SMSC of the service provider is always a good precaution. The first option is usually more secure because it is integrated in your infrastructure and does not require an internet connection. The second SMS delivery option is a good choice if you need to send a high volume of text-messages.


SMS-based OTPs are an Option if You Operate in One of these Industries

Everyone understands text messages. Thus implementing two-factor authentication using SMS will not introduce a steep learning curve for your customers. SMS-based OTPs can be implemented regardless of your industry. Here is an extensive list of industries already using this type of authentication successfully!

  1. Education and Training
  2. Food industry
  3. Retail
  4. Travel and Tourism
  5. Healthcare and Hospitality
  6. Web Design
  7. IT and ITeS
  8. Oil and Gas
  9. Real Estate
  10. Media and Advertising

Two-Factor Authentication Use Cases

  • Registration

Ask for a user’s phone number during the first registration attempt. Display a message where it is clearly explained that their phone numbers will be used only for verification procedures. Afterwards, send a one-time password that will allow the user to access their new account.

  • Password Reset

Fraudsters get into user accounts by phishing email addresses, so verifying new passwords by via text OTPs add an extra layer of security.

  • New Device

If the user logs in from a different device, a new IP address, or even a new country, you can add extra verification steps like SMS OTP or by answering qualifying secret questions.

  • Unusual Behavior

Usual behavior such as making a lot of purchases in a short amount of time, or in different timezones can serve as red flags. Prevent fraudulent activities by verifying whether the actions were performed by the user.

  • Changing Account Information or Settings

Set up additional verification steps when the user requests certain changes that could put their information at risk, such as changing the account name, or phone number. You could encourage users to opt in to extra verification steps by rewarding them for choosing to add the second security layer (some companies offer discounts if their users protect themselves in this way).

When Is It Better to Use Multi-Factor Authentication Technology?

With the rise of fraud attacks such as Emmental that affected banks in Switzerland, Sweden, Austria, and Japan, banks are looking for alternatives to OTPs through SMS. During Emmental operation, millions were stolen from both consumer and commercial bank accounts.

Cybercrooks mislead people into installing fake applications on their devices. There were cases where such apps waited for text-messages from banks that contained session tokens, and silently hijacked communication, forwarding the info to attackers’ servers. Cybercriminals are keen on finding ways to undermine SMS OTPs, but this is still an infinitely safer alternative to the ID and password-only option.

SMS two-factor authentication verifies a user’s identity in a fast, easy, and non-disruptive way. It is relevant for a range of industries, it is cost effective, easy to implement and works on a global scale. Reach out to a telecom consultant and discuss your two-factor authentication needs.

Moving Forward,
DAS Solutions Team.