In this blog, we are going to look at rent-to-own (RTO) businesses. Specifically, we will look at how the appropriate payment platform can improve the payment experience and rent-to-own payments for both RTO customers and merchants.
Payment Platforms for Rent to Own Customers
The rent-to-own (RTO) payment model has its benefits, of course. It can help those described as “moderate-income customers,” to own new name-brand furniture, appliances, computers, and other items by paying regular cash installments.
Typical rent-to-own customers, or “moderate-income customers,” are people who have no credit history, bad credit, or not enough cash on hand to purchase certain items outright.
One major benefit for customers who employ RTO programs is that if they miss a payment on say a big screen TV, their credit score will not be impacted as rent-to-own programs are not credit-based transactions. Additionally, customers can use rent-to-own to build their credit score.
While payments can be a challenge for some rent-to-own customers, there are payment platforms that can help rent-to-own customers make payments easier and make them on time. This is a plus for both rent-to-own customers and RTO businesses.
Also, several payment gateways may support customers who speak different languages and by law should also support customers with disabilities.
Below, we will look at the features of some of today’s payment gateways that can greatly improve the payment experience for RTO merchants.
1. Make Payments Accessible on Any Device
As mentioned earlier, many rent-to-own consumers might have a hard time getting access to substantial amounts of cash. Although technological advancements have made computers more affordable, their prices can still be outside of the budget for many.
However, a study from Pew Research in 2020 showed that 85% of Americans own a smartphone.
So, what does this mean for rent to own merchants and their customers?
This means that if a consumer in the United States does not have access to a computer, they are still likely to have access to a smartphone. And, with a smartphone, they can have direct access to payment platforms that will allow payments to be made quickly and securely. That is because the most efficient payment gateways of today are built with the mobile user in mind.
2. Offer Multiple Payment Options for Rent to Own Customers
With rent to own customers, accepting multiple forms of payment can be advantageous.
RTO merchants who accept ACH, debit cards, credit cards, gift cards, and HSA, give customers flexibility in payments. In the case where a customer does not have a credit card, they may choose to make payments with a debit card or ACH.
3. Utilize Automatic Payment Functionality
Recurring payment functionality may be one of the most notable features of a payment platform that can optimize the payment experience for rent to own merchants and their customers.
Recurring payments, or automatic payments, allows rent-to-own customers to set payments on dates of their choosing. This usually equates to more payments sent on time.
Merchants who make use of payment gateways with recurring payment functionality can often see an increase in cash flow and more on-time payments.
Recurring payment technology is practical and very much aligns itself with the ideal RTO customer.
4. Reduce Calls to Call Centers
With a customer-centered rent-to-own payment technology, many customers can make payments faster and easier. And when customers can send payments with ease, this can reduce the strain on call centers. In short, this means more payments and more payments on time.
5. Use a Payment Technology that is Multilingual
According to Babbel.com, 43 million Americans speak Spanish as a first language. That is a significant amount of people. And certainly, a portion of those 43 million Americans utilize the rent-to-own payment model.
Today, some technology companies have designed their payment gateways to support the Hispanic market. This allows many companies to not merely take payments from those who speak Spanish, but to market products and services to Spanish-speaking Americans.
6. Only Use Payment Gateways That are Security-Focused
Many studies show that a top concern of both consumers and merchants about payment technology is security. Which makes sense.
With costly data breaches over the years, hackers, and an increase in bad actors looking to capitalize on the vulnerabilities of digital payments, security should be a top concern.
That is why today security is a top focus for many technology companies who develop payment gateways.
Many payment technology companies often incorporate Two-Factor Authentication (2FA) or hosted tokenization into their payment software.
7. Be Compliant
The word “compliant” in the payment space can relate to many different aspects of the payment transaction process and payment technology.
Compliance is not just about checking the boxes on a laundry list of industry requirements. Compliance can be beneficial in protecting both merchants and customers.
Furthermore, being compliant can make payments more secure and help better serve populations with disabilities.
When selecting a payment gateway, merchants must always be sure to choose payment technologies that are both PCI and ADA compliant.
Recap: Improving Rent to Own Payments for Customers and Merchants
The rent-to-own payment model can be a great choice for consumers who do not have the financial resources to pay in full for certain goods. Unfortunately, many rent-to-own consumers can often fall behind on payments leading to the repossession of merchandise.
To improve the payment experience for both merchants and consumers in RTO transactions, merchants might want to consider certain payment technologies. Some payment gateways offer functionality that can support and even eliminate many of the friction points of making routine rent-to-own payments.
Payment technologies that allow for payment plans via recurring payments can see improved payment completion rates as well as more payments that are made on time.
Other features such as mobile-first design, payment flexibility, and compliance should also play a major role when deciding on a payment platform.
Contact us today to learn about PaymentVision’s PayWeb360 payment gateway – a robust and flexible payment platform that is secure, multilingual, offers payment flexibility, and has been shown to increase payment completion rates by 300%.