What is Transactional Email, and Why is It Important?

Last updated on May 31, 2024

Transactional emails have emerged as a digital alternative to traditional paper-and-pencil transaction records. ‘Paper trail’ is a term coined in an era when paper was predominantly used to document transactions between two businesses or with a customer and business.

Today, paper bills and receipts are far less commonly used even in physical transactions. As more and more services are moving online, paper transactional notes become rarer and rarer, while transactional emails are increasingly common.

What is Transactional Email?

A transactional email is an email that is automatically generated and contains information on different transactions. These emails don’t always contain information the recipient is not already aware of, but they’re necessary for record-keeping and for reminders.

For example, buying a product on Amazon generates a transactional email that contains all the information regarding the purchase. The email only contains the information the user already knows. Once the product is shipped, another email is triggered. The user doesn’t need to take any action based on this information, but it acts as a reminder/alert.

However, in cases when someone makes a fraudulent purchase using the recipient’s Amazon account, transactional emails serve as a warning that someone has access to their account or their payment information.

In these cases, they’re valuable alerts that allow consumers to take prompt action to cancel the transaction and secure their accounts. In fact, some transactional emails are specifically designed for security purposes.

Here’s a look at some of the most common types of transactional emails:

Login alerts
Security alerts
Password reset links
Onboarding and activation messages
Emails informing financial transaction
Acknowledgment emails
Two-factor authentication mails
E-commerce receipts
Shipping information
Tracking information
Periodic reports

There are many more uses for transactional emails. A significant portion of the more than 300 billion emails sent every day are transactional emails. According to Marketing Charts, about three in 10 companies send more than 100,000 transactional emails each month.

Transactional Email Use Case Examples

A transactional email is a valuable tool for marketing, security, and a variety of other purposes. Let’s take a look at some of the common use cases for transactional emails.

Information Trails

A paper trail was once the medium of choice for keeping records of transactions. Today, transactional emails often take the place of paper documentation. The receipts, information, and other corollary details are sent and received via email. These transactional emails have different purposes including auditing, record keeping, and as evidence.

Cybersecurity Alerts

The screenshot of the email above is generated when a user tries to log in with an email ID and password for two-factor authentication. In this instance, the login attempt was from Russia, a continent away from where the actual user was.

Because of this security email, the user was alerted that someone else was trying to access the account and could secure their account by changing the password and other security details.

Similarly, online services generate email intimation each time a user logs in. Password reset links and two-factor authentication codes are sent to the email id associated with the account. These types of transactional emails act as an extra layer of security, protecting the user accounts from unauthorized access.

Financial Transactions

Transactional emails are generated when a financial transaction takes place. It provides a paper trail for audit purposes and also acts as a record for transactions. Financial transactional emails help in detecting fraud and are used for record-keeping for tax reporting purposes and other accounting documentation.

Similar to the email example above, if a user receives an email about a financial transaction they did not generate, it’s a red flag. If the transaction was a credit card transaction, the user should immediately deactivate the card and may take other steps such as locking their credit reports, updating passwords, and other identity theft prevention measures.

Alerts/Reminders

Automatically generated transactional emails can be used as reminders, too.

In the COVID-19 pandemic era, many people use Zoom for video conferencing on a regular basis. Once a meeting is scheduled, Zoom sends the reminder for the meeting, and participants can add the meeting to their calendars. Emails are sent just before the meeting is about to start, reminding attendees to log in and attend the meeting promptly.

How to Manage Transactional Emails

As mentioned earlier, a lion’s share of the emails sent and received every day are transactional in nature. A single user might receive hundreds of transactional emails every day from a variety of sources.

An overload of transactional messages leads to a few problems. Users might miss critical security alerts that they should have taken action on. Hundreds of transactional emails every day can clutter users’ inboxes and over time, some users might start to completely ignore emails due to alert fatigue.

Businesses that send transactional emails should allow customers to choose the types of messages they want to receive. Opting out unwanted messages should be an easy and simple step. This goes for transactional emails and transactional notifications from mobile and web apps. Sending push notifications to application users is a cost-effective and convenient alternative to transactional emails.

App developers with a focus on engaging and retaining users should offer an avenue for the users to manage transactional push messages. Integrating an inbox with the app is a useful way to notify users of important events in real-time.

This strategy prevents messages from getting lost in cluttered email inboxes. Sending emails can be reserved for security concerns like password resets, and all other transactional messages can be handled by the in-app inbox.

Sending a Transactional Email from Your App

To improve the usability of a notification inbox, developers should allow users to change the notification settings and sound profiles from the inbox. Users should also be able to opt-out from some types of notifications and only receive timely and valuable information, especially when it concerns information delivered with transactional email.

Building an inbox feature with this functionality requires a great deal of effort, time, and capital. Using a complete notification inbox like MagicBell to integrate a fully functional inbox for your applications is both efficient and cost-effective. MagicBell seamlessly integrates with MailGun, SendGrid and Postmark to ensure the smoothest delivery of transactional emails to your users.

App developers can integrate MagicBell with an existing app within 15 minutes and gain a fully capable dedicated inbox feature to keep users informed and engaged. Try it yourself.

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