Your credit union and its members will benefit.
By Jason O’Brien
Sponsored by SWBC
As account holders continue to embrace digital technologies, they are using different forms of online billing and ways to accept payments. According to the 2016 Annual Billing Household Survey, individuals use an average of 3.6 different payment methods each month for their bills. Mobile payment use increased significantly, with 33 percent of online households reporting to have paid a monthly bill through their mobile phone, a 22 percent increase compared to last year.
The entire online payment process—from submitting an online payment to updating the account from which funds were drawn—can take a matter of seconds. The end result of accepting loan payments online is improved cash flow for your credit union and almost immediate confirmation of transactions. Here are some tips to help you accept payments online effectively.
Choosing the right loan payment system provider for your institution is critical. Each of the various providers has a different focus and set of options. To determine which is right for your credit union, take into consideration the following factors:
- Questions to ask a payment service provider
- What kind of fees does the vendor charge—per transaction, monthly, setup?
- What volume of transactions do you expect on your website?
- Are payments processed on your website or the vendor’s? Do you care?
- What kind of payments does the vendor accept—credit card, debit card, ACH?
- Does the vendor support recurring payments?
- Accepting cards online
The majority of consumers expect to use the cards in their wallet as a payment method, rather than searching for an ACH account and routing number. By adding card options to the ways members can make their loan payments, you will be more likely to increase self-service payment and account holder loyalty. When members can use their cards to make loan payments, your credit union may get paid faster and, therefore, have better cash flow; reduce transaction risks by knowing the account’s status in real time; and be able to collect more card-holder information.
- Convenience options
Using a recurring billing system is a very popular method for customers to pay for many monthly services. Offering this option not only makes using your online loan payment system more convenient for your account holders, but it almost guarantees you will be paid on time.
- Initiating payments via mobile
Mobile payments offer an array of benefits to account holders and financial institutions. According to Fiserv, 79 percent of online households now have a smartphone, so your opportunity to increase revenue, usage and consumer loyalty through mobile payments is huge. Many consumers find that mobile payments are easier and more convenient—and save time.
Not responding to consumers’ demands for “quick” and “convenient” options may negatively impact your account holder loyalty. Offering flexible, high-quality self-service loan payment options allows your institution to increase operational efficiencies and deliver a greater experience to your members.
Jason O’Brien is SVP/Payments for CUES Supplier member SWBC, San Antonio, Texas. Check out the company’s latest ebook, Meeting Consumer Self-Serve Payment Demand, to learn valuable and timely information on current trends in the payment industry, tips on how to meet regulator and compliance demands, and specific steps your credit union can take to engage with your digital users.
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