RCS business messaging will triple its share of operators’ revenue in the next five years, as customer trust in SMS declines.
A new study by Juniper Research predicts that RCS business messaging will account for 18% of operators’ revenue by 2029, a significant surge from just 3% in 2024.
The shift is driven by declining trust in SMS, as it has become a major target for phishing attacks (smishing), spam, and fraud. Unlike RCS or other messaging platforms, SMS does not have built-in brand verification or encryption. This makes it easy for scammers to send deceptive messages, as well as makes it vulnerable to interception and SIM swap attacks, where fraudsters take over a person’s phone number to access sensitive information. Besides, many consumers receive a high volume of spam SMS, making them less likely to engage with messages from businesses, even legitimate ones. Finally, the SMS mechanism is outdated compared to modern messaging platforms that offer images, videos, and interactive features.
Rich Communication Services (RCS) is an advanced messaging protocol designed to enhance traditional SMS mode by providing richer multimedia features and improved functionality. It is considered the next-generation messaging standard, offering features similar to those found in modern messaging apps. Via RCS, messages can be sent over mobile data or Wi-Fi, reducing reliance on SMS/MMS and adding flexibility to available connections. Unlike SMS, which has a 160-character limit, RCS allows for longer messages without splitting. Additionally, RCS includes interactive features like buttons for quick replies, location sharing, and rich cards for business promotions.
The declining trust and popularity of SMS are pushing businesses to adopt RCS for its verified branding. To boost growth, experts recommend keeping RCS pricing in line with SMS and simplifying the business verification process.
At the same time, RCS faces strong competition from OTT messaging apps like WhatsApp. The latter are expected to reach 1 trillion business messages by 2029. Moreover, several financial institutions worldwide have integrated messaging services like WhatsApp into their mobile banking platforms, enabling users to access basic banking operations via simple, instant messages on the go. RCS lacks similar functionality.
Despite the competition, the research author Molly Gatford emphasized that RCS will remain an essential part of operators’ messaging services alongside SMS in the given five-year period. However, to boost their market presence and remain relevant, RCS providers must highlight their native integration with smartphones.
