In this blog, we’ll look at ways to reduce collection costs in payment processing. Collecting money from customers and clients can, in many cases, strain human resources and ultimately cost organizations money. However, there are steps that organizations can take to help reduce the number of accounts that go into collections.
Let’s look below.
Create an Optimal Payment Experience
One of the most basic ways that organizations can reduce collection costs is preemptively on the front end with their payment processing services.
If organizations offer consumers a flawless payment experience – if they make it easy and convenient for customers to make payments, in some cases, having to deal with non-paying consumers can be avoided altogether.
Allowing customers to pay through multiple payment channels provides convenience for customers and can lead to more payments made on time and fewer payments being missed. This, in turn, means organizations save time and money in trying to collect on unpaid payments.
Payment options such as IVR, walk-in payments, automated payments, and mobile payment applications, etc., give consumers a variety of ways to make payments. Again, this helps reduce missed payments that go to collections.
Offer Automated Payments to Help Reduce Collection Costs
Automated payments are a great option to offer your customers and clients. With automated payments or recurring payments as they are sometimes called, customers can easily define a payment schedule that will automatically draft payments from their banking account on specific dates. Organizations that incorporate recurring payment functionality into their payment systems can often see a lift in on-time payments.
Use a Payment Platform with Account Updater
As we wrote in our blog about payment gateway provider tips, account updater functionality allows companies to update expired credit card information automatically. This simple feature can improve cash flow, and reduce time and money spent on collecting payments. Account updater can ultimately reduce missed payments, save companies money in time and resources, and increase on-time payments.
Account Verification Services
Using real-time account verification services can also save organizations money. Verifying that an account is valid and in good standing, can drastically reduce NSF issues. Because payments that are returned create a wide range of problems for organizations and they cost money.
AVS on ACH payments are required by NACHA when a consumer makes their first payment on the web. It is also possible for collectors to utilize AVS in house to reduce fraud and chargebacks.
Reducing Collection Costs: A Recap
For organizations, collecting on nonpayment can cost time and money. One of the best ways to reduce collection costs starts with the payment experience. Providing multiple payment channels and offering functionalities like automated payments, account updater, and account verification services can all have an impact on reducing collection costs.
If you are looking for payment solutions for your organization, request information by using the form below or contact us to schedule a call. We offer a variety of payment solutions and have a mobile-first payment app that has been shown to increase payment completion rates by up to 300%.