Adopting innovative payment solutions is one of the best things a consumer finance company can do to take their service delivery to the next step. Amidst the industry’s heavy competition, you must offer payment solutions tailored to improve customer experience and upgrade your company’s procedures.
What is Consumer Finance?
Simply stated, a consumer finance entity makes loans to qualified customers. A consumer finance company is not a bank. Consumer finance companies have different legislative regulations they must adhere to. These are covered in the Credit Contracts and Consumer Finance Act 2003 (CCCFA). A profit from the interest accrued on a funded loan is how a consumer finance entity makes a profit. If interested in current trends in the consumer finance industry – check out our helpful blog here.
Locating Reliable Consumer Finance Payment Solutions
No matter the industry, modern-day consumers expect digital forms of payment to be available. The ability to pay when they want and how they want in real-time is mandatory in today’s fast-paced world.
For consumer finance companies finding a reliable, secure, and convenient payment solution can be difficult. Traditional acquiring banks consider the vertical as high-risk, meaning they anticipate a high number of chargebacks within the tightly-regulated industry. This means finding an alternative payment processor willing to work with your business model.
Locating a payment partner experienced with the consumer finance industry and offering cutting-edge payment systems can be difficult. Go the extra mile to research merchant service providers before signing on the dotted lines. Are fair rates provided? Is your business bound to a contract term? Since we live in a tech-savvy, digital world, more clients prefer digital payment solutions than ever before.
Here are the payments solutions a consumer finance company should consider:
1. Credit/Debit Card Payments
It’s hard to find a consumer with access to plastic payments – aka the credit or debit card. These card branded forms of payments are the mainstays of the digital payment revolution and quickly replacing the “cash is king” mentality.
ACH payments, or electronic payments, eliminates the inconvenience of using paper checks to settle loan fees. The flexibility offered with an ACH payment makes the option attractive to consumers, thereby increasing cash flow. ACH payments are also an extremely affordable way for a consumer finance company to offer an electronic payment option.
3. Recurring Payments
The nature of most loans requires a regular monthly payment. Thanks to recurring payments, both a consumer finance company and its customer can automate regular, authorized payments to be withdrawn from the payment method on file at regular intervals. Likewise, adding recurring payments to your payment arsenal keeps cash flow steady and customers on track with their repayment.
4. Lockbox Service
Additionally, it’s essential to service the entire gamut of your clientele. Not all consumers prefer the ease of use digital payments offer. Be sure to consider keeping a traditional payment method on hand for these individuals. A lockbox service is one way to achieve this. The service traditionally operates by providing a bank-operating mailing address where payments can be sent. The bank then deposits the funds received into a consumer finances bank account.
5. Mobile and Web Payments
This is a natural addition to your digital payment acceptance solution. Adding a secure web payment portal to your online site is a convenient and straightforward way for customers to review their consumer finance details and make on-time payments. Many payment pages are adaptive, meaning they alter to fit a mobile screen. Make sure to test your available options to ultimately provide the best payment portal for your consumer finance entity.
6. Integrated Voice Response
An IVR payment system allows your borrowers to make phone payments without ever speaking with an agent. This convenient payment solution can be integrated with your management software, is available in numerous languages, and, best of all – is available as a 24/7/365 way for customers to pay.
In conclusion, digital consumer finance payment systems are a must-have to keep your consumer finance company ahead of the curve. Interesting in learning more about the solutions discussed in this article? Our Payment Savvy team is available to answer all your questions and create a custom, scalable payment solution for your business. With a decade of serving high-risk industries, our experience in the consumer finance field ultimately provides your business with a first-rate, reliable, and secure digital payment program.