In exploring what is involved in developing an overall payments strategy, in this fifth and final article in the series we will look at building a seamless payments process.
There is no “one-size-fit-all” payment strategy for every organisation, as there will be many individual factors to be taken into account in every case, and this is likely to affect the choices made. However, one aspect about a payments process appears to have almost universal appeal when it comes to customers-they want a “seamless” experience as much as possible. “Seamless” means without joins or to be continuous or even “flowing” from one stage in the process to the next. For a payments process this entails that every step needs to flow in this smooth way to ensure that the customer experience is a straightforward and relatively painless one (given that few people probably like actually paying bills).
Research again and again confirms that flexibility and choice should be a major driver in making the customer experience a positive one, when it comes to rendering payment and the web can now deliver much of this with a little careful pre-planning. In practice, this suggests that the entire payment strategy can be centred around an Internet web site (whether this is in-house or an third-party one). On this site, all the payments process steps of issuing the invoice, offering various payment channels, taking different kinds of payments, reconciling payments to invoices, banking the payments and accounting for the whole payment transaction are possible-a one-stop shop. Of course, some customers either will not or cannot transact on the web and the organisation may therefore have to continue to physically send, email or SMS invoices and even accept telephone based or postal payments. The key issue here however is that this population of customers can be kept to a minimum and encouraged to transition over time. For example, those people making telephone payments can be shown how easy it is to do make the same recurrent payment online (especially when the convenience of doing so 24/7 and 365 days a year is appreciated and not just when call centre lines are open for instance).
In summary then, all organisations of all sizes and types should develop and continue to hone a payments strategy that offers more flexibility and choice to customers. In the chosen approach, being fast and efficient in making the bill available is critical, as is making the whole experience as user-friendly as possible. By doing this, an organisation will usually get the change pioneers and early adopters to experiment with the new approach, and it is their experience that that will have a “viral” influence on those customers who do not like to be the first to try new things. Organisations therefore have to be patient and take a long-term view, but in doing so, can drive both bill presentment and payment acceptance costs down substantially.
Tuesday 16 October 2012
Monday 8 October 2012
Developing a Payment Strategy-Step 4- Making as much payment choice available as possible.
In exploring what is involved in developing an overall payments strategy, in this article we will look at the fourth phase of five in total, which is making as much payment choice available to customers as possible.
Every organisation wants to get paid (and as quickly as possible) but there are clearly many ways in which this may be done by customers. This creates an interesting dilemma. On the one hand, by keeping payment choices to a minimum, complexity is reduced for the organisation but flexibility of options is decreased for the customer. On the other hand, a wide array of payment options creates high customer choice but with a high degree of handling complexity for the business. In the past, the size of the average transaction, the billing cycle frequency and the volume were the main determinants of strategy here (and may have favoured fewer payment choices such as cheque and direct debit only for instance as a way of keeping things simple and processing costs low) but with the more widespread use of the Internet for payments in recent years, the balance towards greater customer payment option choice has become much easier and therefore compelling.
Offering a wider choice of payments incorporates not only varying payment channels but also a variety of payment types. Different channels include the traditional ones of mailed-in cheques and direct bank transfer (direct debit or standing order) but these days can often also include operating a central call centre (in-house or outsourced), automated telephone services or payment via the web (at a company built or third-party site). Different types of payment include cheque, cash and bank transfer, but can be easily extended to a wide variety of credit and debit cards, pre-paid cards and e-wallet transfers.
Internet technology now allows considerable flexibility for an organisation of any size to offer most of the above channels with a web site at the hub of the offering. In addition, an e-payment gateway can now be relatively easily added to enable credit side and debit side, options, as well as e-wallet payments to be taken online. Perhaps even more attractive to an organisation is adding a reputable third-party electronic billing and payment aggregation destination site (such as PaySwyft) as an offering in the overall mix. At such a site, an organisation can present all of its bills in digital form and then allow these bills to be paid with almost every available payment type, including cash in many cases. Because the aggregator takes the payments, collects them together electronically and then settles to its merchants online also, this helps to drive down the internal expense of payment call handling and the acceptance and reconciliation costs of handling cheques (and any other paper-based transactions).
Whatever approach selected by an organisation, today’s customers prefer a variety of payment options to be available meet their different and often changing needs when it comes to paying invoices. The reward for making this available is quicker settlement and thereby accelerated cash-flow. A wise business therefore finds the most cost-effective ways to offer as much choice as they can.
In our next article in this series, we will look at the next phase in developing the Payment Strategy- Building a seamless payments process.
Every organisation wants to get paid (and as quickly as possible) but there are clearly many ways in which this may be done by customers. This creates an interesting dilemma. On the one hand, by keeping payment choices to a minimum, complexity is reduced for the organisation but flexibility of options is decreased for the customer. On the other hand, a wide array of payment options creates high customer choice but with a high degree of handling complexity for the business. In the past, the size of the average transaction, the billing cycle frequency and the volume were the main determinants of strategy here (and may have favoured fewer payment choices such as cheque and direct debit only for instance as a way of keeping things simple and processing costs low) but with the more widespread use of the Internet for payments in recent years, the balance towards greater customer payment option choice has become much easier and therefore compelling.
Offering a wider choice of payments incorporates not only varying payment channels but also a variety of payment types. Different channels include the traditional ones of mailed-in cheques and direct bank transfer (direct debit or standing order) but these days can often also include operating a central call centre (in-house or outsourced), automated telephone services or payment via the web (at a company built or third-party site). Different types of payment include cheque, cash and bank transfer, but can be easily extended to a wide variety of credit and debit cards, pre-paid cards and e-wallet transfers.
Internet technology now allows considerable flexibility for an organisation of any size to offer most of the above channels with a web site at the hub of the offering. In addition, an e-payment gateway can now be relatively easily added to enable credit side and debit side, options, as well as e-wallet payments to be taken online. Perhaps even more attractive to an organisation is adding a reputable third-party electronic billing and payment aggregation destination site (such as PaySwyft) as an offering in the overall mix. At such a site, an organisation can present all of its bills in digital form and then allow these bills to be paid with almost every available payment type, including cash in many cases. Because the aggregator takes the payments, collects them together electronically and then settles to its merchants online also, this helps to drive down the internal expense of payment call handling and the acceptance and reconciliation costs of handling cheques (and any other paper-based transactions).
Whatever approach selected by an organisation, today’s customers prefer a variety of payment options to be available meet their different and often changing needs when it comes to paying invoices. The reward for making this available is quicker settlement and thereby accelerated cash-flow. A wise business therefore finds the most cost-effective ways to offer as much choice as they can.
In our next article in this series, we will look at the next phase in developing the Payment Strategy- Building a seamless payments process.
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