SMTP stands for Simple Mail Transfer Protocol, and sending through an SMTP server means that you have set up a real email address on your system and you are allowing the web based script (wp_mail) to connect to the server with the appropriate account credentials.

By default, WordPress uses the PHP Mail function to send emails. However, it is not the best method and may decrease email deliverability. Emails may often arrive in the spam/junk folder. As an alternative, you can use SMTP to send emails.

There is a wide range of free SMTP servers that can be set up on a mail client to deliver your emails.

A public outgoing server is a good choice for daily communication. You can select among different free SMTP services. The most popular are:

When it comes to email marketing though – when you need to send a bulk message like a newsletter – things get much trickier.

In fact, a common SMTP server like Gmail is not designed to support such kind of mass emailing, because it relies on shared IPs and sets strict limits to the volume of messages and recipients that you can handle per day.

So in this case it’s better to use a premium SMTP service that can guarantee full deliverability of your emails.

Some examples of the paid services include:

How to register for an SMTP service, please refer to this article and this one to find how to configure SMTP plugin (WP Mail SMTP in example).