Banks and Credit Unions, Billing and Payments, Business Process Improvement, Customer Experience and Engagement, Technology and Mobile
Improve Payment Remittance and Collections with Multichannel Payments
Tips to Improve Payment Remittance for Customers
In the fast-paced world of banking and finance, timely payment remittance is crucial for the success and stability of any organization. While businesses often rely on their customers to make payments, issues may arise when payments are delayed. In fact, research suggests that a staggering 25 percent of adults struggle with paying their bills on time (nbcnews.com).
However, there is hope. By maximizing convenience and offering incentives, financial institutions can facilitate prompt payment remittance. One effective approach is to implement a multi-channel bill presentment and payment system, catering to various customer preferences and utilizing emerging mobile payment methods, as well as traditional mail options.
Evolution of Bank Transfers and Remittance Payments
Remittance payments and money transfers have undergone significant transformations in recent years. To facilitate payment and improve collections, it is important to provide customers with diverse payment options. While online bill viewing and payment have become the norm, it is crucial not to disregard customers who still prefer traditional or alternative approaches, such as mail-based remittance. For instance, older customers often favor receiving and paying bills via traditional mail.
It is equally important to consider customers who do not have access to banking services and rely on third-party vendors for money transfers. While digital and mobile billing and payment methods are essential, it is crucial to accommodate those who may be hesitant to make the switch.
Below are several options for implementing a multi-channel billing and payment system:
Mobile and Electronic Payment Methods
Mobile payments and electronic billing offer customers unparalleled convenience. With instant communication and payment capabilities, the digital realm allows for swift transactions. SMS text messages, in particular, boast an impressive open rate of 98 percent, with most messages being read within three minutes or less. This rapid response rate can significantly expedite the payment process. By providing customers with the option to receive bills and communicate through multiple channels, such as email and SMS, financial institutions can improve customer response rates and collections.
Contrary to popular belief, traditional print is far from obsolete. Many customers, including older demographics, still prefer receiving physical bills or invoices through traditional mail. Surprisingly, even younger generations exhibit a preference for a combination of print and electronic communication, especially when it comes to receiving bills. Additionally, incorporating color in bill design can improve response rates by 24 percent. By utilizing highlight colors for important information such as “Amount Due” and “Due Dates,” financial institutions can effectively capture customers’ attention and encourage prompt payments.
Bill design and layout are more important than you think, especially to younger customers. Adding color to your customer documents will improve response rates by 24 percent. Color helps our eyes jump to information deemed important on a page. Adding highlight color to your customers’ “Amount Due” and “Due Dates” can be a real game-changer. To find out more information about adding color and variable data printing capabilities, read FSSI’s blog “Why Job Appropriate Color is Just Enough.”
Third-Party Payment Processing Vendors
Not all customers have access to traditional banking services. Consequently, partnering with third-party vendors, such as CVS, 7-Eleven, and Family Dollar, can offer alternative payment channels for individuals who prefer to remit cash payments. By establishing collaborations with these vendors, financial institutions can enhance accessibility and convenience for customers who lack bank accounts.
The Significance of Punctuality and Incentives
Regardless of the communication channel employed, punctuality plays a pivotal role in the document delivery and billing process. Documents should be delivered on time, and whenever feasible, even earlier. This provides customers with additional time to remit their payments. To encourage timely payments, sending reminders and follow-up notifications can effectively prompt customers to fulfill their payment obligations and avoid late fees. By keeping customers well-informed throughout the payment process, financial institutions can facilitate faster payments and smoother collections.
Setting clear expectations and offering incentives can deter late repayments and foster a culture of punctuality. Communicating payment schedules and associated penalties well in advance is essential to ensure compliance. Additionally, incentives, such as early payment discounts or cashback rewards for on-time payments, can motivate customers to prioritize prompt remittance. Conversely, imposing late fees serves as a deterrent against delayed payments.
Achieving Regulatory Compliance and Ensuring Security
While implementing multichannel payment solutions, it is imperative for banks and financial services companies to prioritize regulatory compliance and security. As financial institutions handle sensitive customer information and transactions, adherence to industry regulations and data protection standards is non-negotiable.
Engaging in thorough due diligence and selecting reputable payment service providers is a critical step toward maintaining compliance. It is essential to partner with vendors who prioritize security measures, employ encryption protocols, and adhere to strict regulatory guidelines. Robust authentication processes and secure transmission channels are necessary to safeguard customer data and financial transactions.
In addition, financial institutions must stay informed about evolving regulatory requirements. Compliance teams should closely monitor updates and changes in regulations to ensure that their payment systems and processes align with the latest industry standards. Regular internal audits and assessments can help identify areas for improvement and ensure ongoing compliance.
Maximizing the Benefits of Multichannel Payments
Implementing a multichannel payment system offers numerous benefits for banks and financial services companies. By providing customers with diverse payment options, institutions can cater to their preferences and improve the likelihood of timely payments. Increased response rates, facilitated by instant communication channels like SMS, can significantly enhance payment remittance and collections.
Embracing multichannel payments requires a comprehensive approach that combines technological advancements, customer preferences, and regulatory compliance. Financial institutions that prioritize convenience, security, and regulatory adherence will be well-positioned to improve their payment remittance processes and collections, leading to enhanced operational efficiency and financial stability.
To explore the best multichannel payment remittance strategy for your company and customers, we invite you to reach out to our experts at 714.436.3300. Our team is ready to provide guidance and support in implementing effective and compliant payment solutions tailored to your specific needs.