How scheduled payments provide flexibility in bill pay
30-09-2022 8 mins read
With energy prices and inflation soaring across Europe, the need for flexible payment options is rapidly growing. For example, one in four households in the Netherlands is currently unable to pay their energy bills. This number is expected to continue to grow over winter. As households experience less financial stability due to the current cost of living crisis, more direct debits are expected to fail or be reversed. Direct payment methods that include flexible payment options, like installment plans and scheduled payments, can provide this growing group of people who are unable to pay their direct debits with the flexibility to pay differently on a month-to-month basis.
Billers need to help as many people as possible, both as their duty to society as well as safeguarding their cash flow. Hence billers should offer other month-to-month payment methods next to direct debits for those who cannot or do not pay their direct debit. Until recently, the most common method that allowed customers to pay their bills directly meant typing all the information into their banking account. Customers will then need to find and copy all relevant information regarding the payment into their accounts, which, in turn, makes it easy to make mistakes and encourages procrastination. Another option consumers are given is to download yet another app or go to another portal. In both cases, they are required to set up an account or find their login information, which is tiresome, to say the least.
Payment requests accompanying direct debit payments
A better method exists; using a payment request. A payment request is a transaction page for a specific payment with all the necessary information prefilled. Your customers are then able to choose how they want to pay for this payment, which can help them take control of their financial situation.
Serrala Alevate Request-to-Pay can enable this. Our solution enables effective communication between you and your customers through many different communication channels such as email, WhatsApp, or SMS. Your customer can then pay within a few clicks. This intensely lowers the mental barrier to pay. Hence, they are more likely to pay right away and not put it off and forget about it.
Moreover, if someone else is paying the bill, customers can easily send the payment request to the right person. Lastly, as the information is prefilled, it becomes impossible for customers to make any mistakes which can cause unallocated cash and all the problems this can bring for your company.
The payment flexibility offered through these payment requests is therefore not replacing direct debits but they are simply an addition for when the direct debit fails, gets reversed, or if your customers simply prefer other payment methods. And although it will not be able to help all customers that need additional payment flexibility, it may be a start to helping some.
Flexible payment options: the way forward
However, as inflation is soaring and more and more people are employed in the gig economy, solely offering customers the ability to choose their payment method on a month-to-month basis or when their direct debit fails is not cutting it anymore. Some customers may need more flexible payment options which allow them to choose when and how much to pay at once. In the world of eCommerce, these flexible payment options are often provided by Buy Now Pay Later (BNPL) providers. They offer customers a little extra financial freedom while buying products online by allowing people to pay for the goods they received at a later point in time, or to pay for a product in four installments. One in ten consumers in the UK currently uses BNPL payment methods to cover essentials, according to a recent report from Hargreaves Lansdown. Moreover, millennials and gen Z mention that available payment options play a large role when deciding whether or not to buy from a place. Hence, they may find it beneficial if they can use similar flexible payment options while paying for their services.
Scheduled payments enabled by the power of PSD2
Scheduled payments are one way to provide this payment flexibility in the billing and collections space. Giving people the possibility to plan their expenditures while making sure you get paid on time. This makes scheduled payments especially useful for people who do not get paid on a monthly basis, like those who work in the gig economy. Serrala can help facilitate this by allowing your customers to schedule a new date when receiving a payment request. The biller sets the final due date, and the customer can pick a date when they know they will be able to pay before this. It helps combat forgetting about the bill and the problems that come with it.
Installment plans for additional payment flexibility
Another way could be by providing the option to pay in installments. Paying in installments allows customers to split payments over three or four interest-free equal installments with no hidden fees. This is nothing new for billers as energy companies have been using installment plans for years by allowing customers to pay off their debt through payment plans. Serrala can facilitate installment plans and make it easy to remember and execute them. It is different from BNPL providers as, in this case, the biller stays responsible for the relationship.
These flexible payment options are simply an addition to traditional payment options such as bank-to-bank transfers, credit cards, e-wallets like Apple Pay, Google Pay, and PayPal, and lastly, cash by bringing a voucher to a participating retail location. Both scheduled payments and installment plans still rely on these online payment methods to pay, the only difference is that now a person can decide to schedule payments for a different date or pay the bill in installments.
The way forward thus requires more flexibility and compassion from billers. Offering your consumers flexible payment options like scheduled payments and paying in installments can be key while trying to help them out a little during difficult times. Doing so can, in turn, strengthen the long-term relationship with your customers, and ensuring the process is automated creates a better experience for both your company and your customers.
That’s where Serrala comes in by helping you provide payment flexibility in an easy and automated manner. Our Alevate Request-to-Pay solution now offers two flexible payment methods directly in its application. Your customers can decide to schedule a payment; directly from the email for a later date in time. This date still occurs before the final due date. Besides this, your customers can also decide to pay their bills in four installments.
Using the Request-to-Pay solution, companies can make flexible payment options available effortlessly through many different channels outside of e-commerce. The solution makes it easy for customers to pick how they prefer to pay and can easily deal with billing or dunning files from any ERP or collections system. As our solution is cloud-based, it can be implemented quickly and remotely anywhere in Europe (including the UK), which makes it easy to stay on top of the latest technology trends. Whether it is to pay bills or to collect on a debt, with Serrala Alevate Request-to-Pay providing your customers with their preferred payment options becomes easier than ever before.
To learn more about how our solution can help you offer your customers flexible payment options, schedule a demo.