In our fast-paced world, instant gratification is the name of the game. When it comes to banking, consumers feel the same way. We live in a world of mobile and direct deposits, peer-to-peer payment technology, various payment method options, and same-day payment posting. It’s no wonder more and more members are demanding convenient, flexible loan payment options from their credit unions.
When it comes to paying their bills, fewer and fewer consumers want to have to stop and write a check (if they even have checks) or get a money order (remember this old-school way of sending money?). Self-serve is the new black. Even if they have to pay a fee, borrowers are willing to do so for the ability to make a payment conveniently online or over the phone. The bottom line: convenient payment options are no longer optional. If your members can’t get what they want or need from you when they want it, they’ll go looking for it elsewhere even if they’ve been a loyal member for a long time.
If you’re already offering your members convenient ways to make their loan and credit card payments, congratulations! You’re probably making your borrowers happy, simply by making their lives easier. But even if you’re limiting these services to just ACH or check-by-phone, you could still be driving away current and potential borrowers who prefer using their debit/credit cards to make payments over the phone. Plus, you’re passing up a great opportunity to generate fee income quickly and easily and that directly affects your bottom line!
Payment processing technology allows credit unions and financial institutions to accept payments through multiple convenient channels online, through Interactive Voice Response (IVR), via phone, or in personusing various payment methods such as credit/debit card or checking/savings account.
Credit unions stand to gain flexibility, improved customer satisfaction, increased payment activity, and improved operational efficiency. Improved operations can lead to fewer employees dedicated to collections and payment processing, allowing them to cross-sell other products and services and focus on meeting your customers’ needs.
There are numerous benefits to accepting loan and credit card payments electronically, including:
- More efficient authorization, tracking, and collection of funds
- Streamlined processes that increase productivity and require less manual work
- Decreased delinquency since borrowers can pay anytime, anywhere
- Increased collection cure rates
- Reduced collection and payment processing costs
- Minimal time spent on collections and payment processing, so employees can focus more of their time generating revenue and meeting your borrowers’ needs
- Flexible and more accessible payment options for borrowers
If you’ve noticed that your loan and credit card payment processing is creating frustration for your borrowers, maybe it’s time to re-evaluate the technology and payment channels you’re utilizing.
Click here to download our free ebook, Improving Operational Efficiencies with Payment Processing Technology, and learn if your payment processing technology, or lack thereof, is affecting your members’ satisfaction.
Brad Young is chief operating officer for the Financial Institution Group at SWBC.