Definition
Two-way SMS lets a business both send messages (mobile-terminated, MT) and receive replies (mobile-originated, MO) from customers, using a short code or long code that can accept inbound texts.
Outbound messages are MT; replies are MO. The provider receives MO messages from the operator and forwards them to the business via a webhook, an inbox or, on SMPP, as deliver_sm PDUs.
Typical uses are appointment confirmations (reply YES/NO), customer support threads, surveys, keyword opt-ins and STOP handling for opt-out.
Two-way SMS requires a reply-capable sender. Alphanumeric sender IDs cannot receive replies, so two-way flows use short codes or virtual long codes, subject to availability in each country.
Design tips: tell people what to reply, acknowledge every reply, process STOP immediately and route anything the automation cannot handle to a human agent.
Example
Your appointment is on 14 Oct at 10:30. Reply 1 to confirm or 2 to reschedule.