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The Future of Collections Messaging
Why Rich Communication Services is Worth Your Attention
Nate Kalnins
March 06, 2025
Table of Contents
For decades, SMS and MMS have been the default communication channels for businesses reaching consumers.
Well, most businesses anyway. The credit & collection industry is VERY far behind here. But I digress…
Texting is simple and widely used, but it comes with frustrating limitations - especially character limitations that create compliance challenges considering all the required disclosures we typically need.
Rich Communication Services (RCS) is the next evolution of messaging, bringing a more dynamic, app-like experience to the default messaging app on a consumer’s phone. It enhances communication by adding features like interactive buttons, high-quality media, and real-time engagement indicators—all within a secure and verified environment.
What is RCS, and How is it Different from SMS/MMS?
RCS is often compared to WhatsApp or iMessage, but without the need for a separate app. Unlike SMS, which is limited to plain text and simple attachments, RCS enables richer, more interactive messaging.
Key differences:
Rich Media Support: High-quality images, carousels, and video messages.
Interactive Buttons: Consumers can tap to pay, schedule a call, or navigate to a payment portal within the chat.
Read Receipts & Typing Indicators: Know when a message has been read and when the consumer is responding.
Verified Business Profiles: Reduce spam concerns by appearing as a trusted sender.
No Character Limits: Send clear, concise messages without worrying about truncation.
Why Should the Credit and Collections Industry Care?
SMS has served the industry well but is increasingly ineffective due to:
Lack of trust—spam texts are common, and many messages go ignored.
Compliance challenges due to character limits making disclosures difficult.
Low engagement rates caused by its static nature.
RCS addresses these concerns, improving engagement, maintaining compliance, and building trust with consumers.
If you always do what you’ve always done, you’ll always get what you’ve always got.
Compliance and Implementation Challenges
As with any communication channel, RCS must align with regulations like the Fair Debt Collection Practices Act (FDCPA), Reg F, and the Telephone Consumer Protection Act (TCPA). While RCS offers better consent management and message tracking, businesses must ensure they are handling opt-ins correctly and maintaining compliance protocols.
PS: Don’t forget about the FCC Consent Revocation Rule that takes effect 4/11/2025! That will definitely apply here.
Beyond compliance, businesses must also become verified RCS senders, a process designed to prevent spam and fraud. This involves registering with an RCS provider, undergoing identity verification, and setting up message templates that comply with industry standards.
Operationally, RCS requires working with an RCS-enabled messaging provider and ensuring compatibility with consumer devices.
How RCS Can Improve Debt Collection Strategies
Here are some practical ways RCS can be used in collections:
1. Payment Reminders and One-Tap Payments
Instead of sending a generic “Your payment is due” text with a link, imagine this:
A message with the balance due, due date, and a one-tap “Pay Now” button.
A carousel with payment plan options for easy selection.
A button to schedule a call with an agent at a convenient time.
This makes it easier for consumers to act immediately, reducing friction and increasing payments.
2. Interactive Dispute Resolution
RCS enables guided, two-way conversations. Instead of sending a static dispute form, an RCS message can walk consumers through the process in real time:
Step 1: “Do you need more information on this account?” (Yes/No buttons)
Step 2: If “Yes,” offer options to download a statement or request a call.
Step 3: If “No,” present payment arrangements or further assistance.
This keeps consumers engaged and simplifies resolution.
3. Secure Identity Verification and Fraud Prevention
RCS enhances security with verified business profiles and encryption.
Consumers can confirm their identity securely within the chat rather than calling in.
Companies can send confirmation messages for account changes or unusual activity.
This reassures consumers that they are interacting with a legitimate business and reduces fraud risk.
4. Intelligent Follow-Ups and Engagement Nudges
Traditional SMS reminders can feel intrusive. RCS allows for more thoughtful, context-aware engagement.
If a consumer views a message but doesn’t act, a follow-up can offer additional options (e.g., “Need more time? Let us know.”).
If a payment is started but not completed, a reminder can prompt them to finish the process.
If a consumer engages but doesn’t pay, an automated assistant can provide help before escalating to an agent.
5. Creative Approaches to Encouraging Payments
What if making payments felt less like an obligation and more like a positive action? It’s not farfetched to envision gamified payment applications embedded via RCS. No more leaving the message to navigate to a separate payment site.
Personalized Payment Progress Bars: Show consumers their progress toward resolving their balance, making it feel like they are actively accomplishing something rather than just paying a bill.
Post-Interaction Feedback Surveys: Get personalized input from consumers following their interactions. Analyze to find common pain points that can be improved on.
Educational Content: Sharing financial literacy resources and personalized financial advice
Final Thoughts: Start Preparing for RCS Now
RCS is not a future possibility—it’s already here and gaining momentum. This is the future of digital communications, and agencies and creditors should begin preparing now.
A few next steps:
Research RCS-enabled messaging platforms.
Evaluate your current SMS strategies and how RCS could enhance them.
Stay on top of compliance considerations.
Start small with an ironclad use case expand from there.
The agencies that adopt RCS early will differentiate themselves with better engagement, higher recovery rates, and a more seamless consumer experience. The tools are available—now it’s time to use them effectively.
🎓 Links for the Learners
𝕏 Simple advice anyone can follow to nearly guarantee that they will achieve their most important goal.
💡Tip of the Week
Want to dive deeper on RCS? Try entering this prompt into ChatGPT:
I was at a conference recently and a presenter discussed Rich Communication Services (RCS) and why it could be an influential technology for credit unions. He didn’t do a very good job though and i need more help.
Conduct deep dive research into RCS and compile a report that includes the following:
An overview of what RCS is
Why RCS matters for credit & Collections
Compliance matters to consider when using RCS
Operational/logistical hurdles to consider before RCS can be used
A list of “quick win” use cases for RCS
A list of long-term/non-obvious use cases for RCS
A “go-to-market” rollout plan for helping my company learn about RCS and implement it into our operations.
⌛ Last Week Lowdown
ICYMI: Highlights from last week’s edition. Click here to view the entire post.
The FCC’s new TCPA Consent Revocation Rule takes effect 4/11/2025. It’s going to be a nightmare for large organizations to comply with!
What channels of communications the rule applies to
The “magic words” that the FCC considers to indicate revocation AND why they aren’t the only things you need to watch for
Are we on the same wavelength? Check out EngageARM.com for free resources, networking, and in-depth tutorials to help you build a highly-effective recovery department.
I’d like to close this with a quick ask. If you enjoyed this, please share with a colleague. Even better, take advantage of the referral program (linked below). If you disliked it, let me know why. All feedback is good feedback, after all.
Cheers,
Nate
