Leveraging Payment Systems Integration and Automation to Improve Cash Flow
Amid today’s global economic recession, companies are challenged to look for new ways to balance cost reductions with necessary technology and service investments to improve cash flow, increase revenue and achieve operational efficiencies – the lifeblood of any business. Yet few companies recognise that a strategic investment in integrated payment service solutions and automated innovations can be a powerful and cost-effective way to meet universal and essential business objectives.
Establishing multi-faceted payment channels is the first step toward increasing revenue and improving cash flow. Consumers, many of who are tech-savvy and multi-wired, demand convenience, choice of payment methods, ease-of-use and reliability when it comes to paying their bills. And companies most likely to succeed in today’s unprecedented competitive environment are those best prepared to respond to consumers’ need for flexibility during these financially trying times.
According to the Western Union Money Mindset Index, conducted by Javelin Research in August 2008, consumers are adjusting the way they pay their bills. The average person is paying approximately two and a half bills late in a given month. One in five consumers pays bills late and one in six believes they will pay bills late or default on payments in the near future. Not surprisingly, customers are stressed about their credit scores, money management and meeting their financial obligations. What does this all mean? Customers are looking for ways to meet their financial obligations and the businesses that offer the easiest and most flexible payment options are the one’s who are mostly like to get paid first.
What does a flexible, multi-faceted payment solution look like? The payment channels below reflect some of the most well-accepted and widely used services, as well as some new, on-the-horizon payment technologies:
IVR is among the most popular forms of self-service payment. Customers have embraced bill payment by telephone because it eliminates wait time for a live operator, provides around-the-clock access and allows for customer-driven dialogue. Companies value IVR because it reduces traffic to the call centre and provides call centre staff with advance information to better serve customer needs. In addition, IVR offers a built-in mechanism for monitoring process improvements, including reduction of wait time and call duration.
Because consumers are increasingly comfortable making transactions and managing their finances online, the Internet serves as a full-time virtual agent, enabling consumers to schedule and manage payments through their biller’s existing website seven days a week, 365 days a year. This allows customers to self-service their basic account needs and payments. All in all, the Internet offers an enhanced customer experience, while reducing call volume to customer service representatives.
With more and more customers paying bills online, companies have adopted e-billing to leverage the growing numbers of Internet users into cost savings. In addition to reducing the need for live agents, e-billing has also helped companies cut costs and make an environmental statement through ‘paperless’ billing. As security concerns have decreased among customers, e-billing will continue to be a popular channel for payment. While ‘pull’ e-billing, or the delivery of emails that notify customers about invoices posted on the company’s website, is still popular among companies, the format is evolving. Innovative companies are now using ‘push’ e-billing to speed up the payment process on both ends. With this solution, the invoice is delivered to the customer’s mailbox and allows for payment to be submitted with the click of a button on that email. This solution also allows companies to reach customers who will not be pulled to the company’s website, increasing adoption and maximising cost savings. The customer gets a faster ‘one-click’ experience, and the company receives payment notification.
Online banking is significantly transforming payments processing speed and convenience. Customers are seeking same day or expedited payments that allow them to keep track of their account balances in real time, while offering them peace-of-mind through more immediate payment confirmation. Banks who adopt this payment channel will benefit from receiving accurate, electronic payments in a timely manner, while offering their customers an opportunity to tailor payments that fit their lifestyle and help them meet their financial objectives.
Customers are using mobile phones as communications tools that extend beyond telephone conversations. As customers continue to assimilate new technologies into their daily lives, companies must continue to innovate. According to the report, Fixed and Mobile Subscribers, conducted by Infonetics Research in 2008, the number of mobile subscribers around the world will hit 5.2 billion in 2011. With the rise in mobile broadband access, payment strategies will increasingly rely on mobile payments to better serve customers and increase efficiencies and tracking. This emerging payment channel provides secure payments via SMS text messaging and mobile enabled web pages, exploiting the technology’s ability to truly provide anytime, anywhere service.
Once a company has established a robust, multi-channel payment system, the time is right to go behind the scenes and incorporate a comprehensive integration and automation strategy.
Despite the fact that we live in a technological society, many companies do not have well- integrated systems and must manually reconcile payments. This process is time-intensive, costly and prone to error. Failure to identify missing payments and an inability to quickly detect financial or order problems are hallmarks of traditional reconciliation efforts. Further, as a customer base grows, so do payment reconciliation costs.
The good news is that integrated solutions are highly customisable and compatible with both legacy and advanced technologies. Integration of systems does not need to be a high-cost investment in terms of time or money. Experienced and knowledgeable payment service providers can enhance or adapt existing channels with few compliance challenges. The resulting business benefits are expansive, including:
Quick reconciliation of billing systems allows relevant and timely information to be fed ‘downstream’ to other functions or the field near real-time. The cost savings extend beyond managing the cash position in payments to other functional areas of the company. Further, swift integration of payment services can optimise reconciliation, collection and reporting across individual and often disparate systems.
Integrated bill payment systems and services are no longer a ‘nice to have’, but are the cost of doing business in today’s highly competitive environment. The electronic payment revolution is here. Savvy payment executives and treasury managers know that they must adapt to remain competitive. They are under intense pressure to keep up and respond to the changing marketplace or risk being pushed aside. Efforts to achieve payment efficiencies through automation will yield quantifiable benefits throughout an entire organisation.