The Importance of Real-Time in Consumer Payments
02-06-2022 8 mins read
Every once in a while, a consumer contacts us with a question about a “pay-by-link” payment request we sent them via email on behalf of one of our clients. While the experience is fully client-branded, it does show that Serrala, with our request-to-pay service for B2C and B2B payments, is the provider of that convenient payment interaction. The other day, it was someone – we’ll call her Sandy – who has a revolving line of credit with an online retailer, provided by a consumer finance company. That consumer finance company sends us data records for bills and reminders that need to go out. Our software turns those records into emails to the consumer and links to payment pages armed with online payment options. This makes life a lot easier for consumers, as they can simply pay by link. Consumer payments made easy, everyone wins.
But. Sandy had been receiving through our service the online retailer’s payment requests to settle her debt and clear her account status. She said she had paid the most recent credit instalment but did not see that reflected in her account. That in turn meant she could not order new stuff as she had wanted to. Consumer payments experience gone wrong. Confused, made uncertain and annoyed, she managed to contact us – a B2B2C SaaS provider, not the online retailer.
You don’t need real-time payments to provide real-time service for consumer payments
Now, one of the powerful things about (our) payment requests is that our customers, meaning the online retailer in this case, can see and notify in real time that someone has authorized the online payment. And authorizing the online payment (like face ID with Apple Pay, pin code with PayPal, fingerprint with your mobile bank app) means that the money is on its way. It may still take a day or two to arrive and be matched to the corresponding open item in your accounts, but consumers are used to the authorization being enough to get pizzas delivered in thirty minutes and products shipped overnight. “I paid.” Depending on the online payment method used, the merchant may even be 100% certain that the money will come: bank-to-bank payment methods like iDEAL (the Netherlands), Sofort/Klarna (Germany and other European countries) and EPS (Austria) are irrevocable and, for all intents and purposes, guaranteed. And while cards and wallets may enable a chargeback, NOT trusting the real-time authorization has significant repercussions:
- Missed revenue: Sandy wanted to buy more stuff but had to wait for days for the payment to finally be reflected in her account. In the meantime, she may have bought it somewhere else.
- Bad consumer payments experience means bad customer experience: Sandy thought she did her job (authorize an online payment) and kept checking her account in vain, hoping for its status to change. Besides being annoyed, it left her uncertain as to whether her payment was successful – despite our payment requests clearly communicating that in color and writing. Call it omni-channel, multi-channel, cross-channel… this is not it.
- Waste calls to customer service: In this case, Sandy decided to contact us. However, most people will get in touch with the online retailer’s contact center to ask and complain. That contact center, if its records are NOT based on our payment requests’ real-time status updates, won’t be able to confirm that the person actually did authorize the payment.
Customers will hang up frustrated after being told that they simply have to wait and check, wait and check. Or, if the use case is important and urgent enough, customers will resort to sending screenshots of their bank (or card) account showing that they did authorize the payment. Which still may not be accepted and can introduce data privacy / security issues.
Fix it! How to make consumer payments work
The answer is technology. Our solution can be used through a so-called REST API, even for batches of records that need to be sent in one fell swoop. And that REST API has a thing called a webhook: a real-time push notification that (in this case) the payment was indeed authorized for Sandy’s payment request. Our client’s IT needs to ingest that webhook to update its portal (where Sandy manages her account) and its customer service system, if not the status of the open item in its ERP / loan management system.
So, this is a plea to all our clients – existing and new ones – to optimize their use of our solution. It’s a small IT investment that pays off in more ways than one. Others do it, so can you. It’s better for your customers, your people, your brand and your bottom line.
Pain Points in Billing and Collection
- Low and slow conversion hurting cash flow / DSO and requiring follow-up
- Inaccurate payments causing manual reconciliation and exception handling
- No visibility on status of message and payment until money arrives and matches
- Rigid and slow process of sending and waiting
- Expensive paper that takes days to arrive and hurts the environment
- Expensive and complex payments like checks, cards, and wallets
- Fragmentation regarding channels, payment integrations, and processes
A Comprehensive Pay By Link Ecosystem Is Waiting for You
- Electronic Bill Presentment and Payment: With Pay By Link solutions, you can support your bill presentment and customer payments. Reach consumers and small businesses for onboarding, billing or reminders via any channel for immediate online payment with any method or provider. Learn more about Electronic Bill Presentment and Payment
- Reconcile PSP Settlement Files: Include as many Payment Service Providers into your sales channels as you want. Our automated reconciliation of settlement files supports faster and more accurate cash application without any additional manual workload. Find out more about PSP reconciliation Settlement Files
- Enable Open Banking: Combine request to pay with PSD2 payment initiation and let your customers authorize payments directly from their bank accounts and make transactions faster, easier, cheaper. Read more about Open Banking