We continue our tradition of examining companies involved in fintech and payments-related services, including those where such functions are not central to their primary operations. Twilio Inc. (NYSE:TWLO), founded in 2008, is a cloud communications platform specializing in client engagement customization. Twilio’s mission is to “unlock the imagination of builders” by managing a developer-first platform that integrates voice, messaging, video, email, and authentication into applications through flexible Application Programming Interfaces (APIs). Twilio enables a vital and customizable life cycle link between businesses and their customers. Serving over 320,000 businesses and 10 million developers across more than 180 countries, Twilio empowers companies such as Netflix, Airbnb, Spotify, and Instacart to deliver data-driven interactions tailored to customer preferences.
Twilio processes billions of SMS messages across various categories—notifications, marketing, verifications, and more. The total SMS volume on Twilio’s scale could be around 50 billion messages annually. Estimating the number of payment-related SMS messages sent annually via Twilio is challenging since the company does not specifically categorize this information publicly. However, we have pieced together a rough estimate based on available information and industry trends.
Billing-related SMS would include invoice reminders, payment due alerts, or subscription confirmations—distinct from broader payment-related messages like transaction receipts. Billing-related SMS falls under transactional messaging, which industry reports suggest accounts for 20-30% of total SMS volume for platforms like Twilio. Within transactional SMS, billing-specific messages (e.g., “Your invoice is due” or “Payment plan updated”) likely represent a smaller segment. Conservatively, billing-related SMS might constitute 10% of Twilio’s total volume, considering use cases like utilities, SaaS subscriptions, and telecoms, which rely heavily on such messages. If Twilio sends 50 billion SMS messages annually and 10% are payment-related, that equates to a potential 5 billion messages. This aligns with trends: e-commerce and banking rely heavily on SMS for confirmations, and Twilio powers many of these for clients such as Stripe, PayPal, and Shopify. Twilio’s APIs enable businesses to build payment-related workflows using SMS. For example, customers receive payment confirmations or invoices through Twilio’s SMS. A business can send an SMS with a payment link when a customer makes a purchase or needs to settle an invoice, often using Twilio Functions to host webhooks that respond to payment events.
Secure Payment Collection: Using Twilio’s Pay feature, businesses may initiate payment processes via SMS by sending a link to a secure checkout page (e.g., Stripe Checkout) where customers enter card details. Twilio Verify can add an extra layer by authenticating users via SMS one-time passcodes before processing payments. Stripe, PayPal and Shopify processes billions of transactions annually and by themselves may constitute a significant portion of Twilio’s payment SMS related business.
Custom SMS Payment Flows: Some configurations, like the myCred SMS Payments Add-on, allow users to check balances or transfer points via SMS, requiring a Twilio account and verified phone number. This facilitates actions through SMS rather than direct money transfers. SMS pricing in the U.S. starts at $0.0079 per message, though discounts apply at scale. Assuming an average blended rate of $0.006 per message (accounting for volume discounts and carrier fees), payment-related SMS transactions may contribute revenue of $30-$50 million.
Twilio generated 2024 revenues of approximately $4.5 billion from two core divisions: Twilio Communications and Twilio Segment. Communications includes APIs for programmable messaging (SMS, MMS, WhatsApp), voice, video, and email, powered by its global Super Network, which ensures reliable connectivity through partnerships with tier-1 carriers. Twilio Segment, enhanced by the acquisition of the same name for $3.2 billion in 2020, is a leading customer data platform that unifies real-time data for personalized campaigns and analytics. Additional solutions like Twilio Flex (a programmable contact center) and Twilio Engage (an omnichannel marketing platform) assist businesses in streamlining support, sales, and marketing. Twilio’s AI-driven tools, such as CustomerAI, further enhance engagement with real-time predictions, intelligent agents, and generative content. Twilio supports industries like healthcare, retail, and financial services, and its social impact arm, Twilio.org, assists over 7,000 nonprofits, impacting 470 million people globally.
We admire Twilio’s breadth of industries served and depth of services provided.
