Benefits of Online Payments
January 2008
An e-commerce payment site allows a business to offer it's customers a much more convenient method of payment in today's increasingly non-nine-to-five world. Anne Roberts investigates the benefits available to companies by embracing this ‘virtual' world.
With the technological and security advances of recent years, over half of us are now more than happy to shop, bank and make payments online. Consumer confidence in the internet is at an all time high and this electronic channel of service delivery has created a host of opportunities for all businesses. As we all know though, opportunities are not without their challenges, but some businesses are using these high profile issues as an excuse to not move with the times. Media spin combined with a lack of knowledge still surrounding the internet has led to the ‘cons' outweighing the ‘pros', resulting in many businesses being left behind and unaware of the increased cash flow and kudos this means of payment will afford them.
At Close Credit Management, we provide clients with an audit of their current credit control status and through a ‘workout' designed to tap into those areas causing them the most ‘pain', we find that one solution is developing an online payment site for them and their customers to use.
However, some clients are still reluctant to embrace this approach, even though they can see for themselves the benefits that could be gained. The reasons for this appear to be mainly surrounding security, usability, cost and compliance.
With the press touting increased figures surrounding online payment fraud and baffling consumers with scary sounding words like ‘phishing', ‘virus' and ‘hackers', it is only natural that companies, big and small will be wary about opening their customer base and brand to this perceived risk.
However, as we have discovered at Close Credit Management, implementing the correct level of security and constantly reviewing this, allows us to offer our online clients and customers the same level of security we offer our offline base. For example, you wouldn't give your bank card to a stranger in the street and ask them to go to the cash point for you, so apply the same theory online and only use trusted brands.
This coupled with the fact that only 12% of the population have actually suffered from online fraud, which compares favourably against offline card fraud which has increased to 46%, helps to demonstrate how secure the internet can be.
Another set of issues surround usability and credibility. We all know how irritating it is when we log onto a website and can't find our way around. This not only frustrates customers, but can also lead to them logging out, brand damage and therefore loss of revenue. A recent survey of UK consumers brought to light specific key issues that online customers defined as important when using a website; interaction, obvious and easy navigation, user friendliness and security.
It is essential that online services notice the similarities between the traditional marketplace and the electronic one. Virtual services should not be ignorant of what customers actually want to achieve online, something that we have factored into our designs and are constantly monitoring.
Also, by working with a credible outsource provider who is not necessarily a web development company, businesses can benefit from an offline industry experts knowledge applied to a virtual market.
Websites are so expensive! Is another statement we here regularly. Although this can be true, using a white labeled approach can be not only extremely cost effective, but also save time and allow businesses to benefit from the knowledge and expertise that the supplier has. For example, many of our clients have benefited from our ‘work out' approach which sees us going in and working through their collections procedure with them to see exactly where an online payment site can add benefit and what functionalities would be needed in order for it to work for their customer base. Reviewed constantly, this approach allows us to monitor the effectiveness of offering online payments, invoices and statements for their customers and also develop the service inline with the clients' needs, something a normal web provider would find difficult to do.
Another area of contention for financial sites is that of compliance. Again working with an outsourced partner here with industry knowledge will allow for businesses to take the pain out of this process as an established provider will work with you to guide you through the potential pitfalls of setting up a merchant account, going through a PCI audit (if required) and ensuring that your site complies with the disability discrimination act.
A good service partner will also be able to provide details and help surrounding other issues such as chargeback's, 3D Secure, domain registration/renewal and appropriate communication routes to market, including incentives for customers to pay online.
Once clients have walked these through in their heads, they are much more willing to look at the positives associated with online payments and opening their business to this method. We find that the main benefits can be summarised into five main areas; data management, customer analysis, access, security, cost and the reduction of manual intervention, but each clients needs are different and therefore the benefits for each client vary also.
Data Management - The internet on the whole allows for easier collection of customer data and database management. A well designed and built payment site will allow its owner a more robust method of data capture and cleansing. Capturing new information about customers such as email addresses and keeping address details updated and refreshed much more frequently and easily than any offline method.
Customer Analysis - online payment data is much easier to analyse and can provide credit control departments a much more detailed overview of their customers payment behaviour, even down to their preferred payment times. This allows a business the luxury of setting more stringent payment terms for repeat offenders and also providing them with a behavioural profile for each and every customer. We offer customers the ability to easily download transactional data from our platforms, which can be opened in a variety of programmes for ease of analysis and reporting.
24/7 Access - as we all know, 9-5 opening hours are becoming more and more outdated in for today's busy world. Online services are increasing in popularity because of this and being able to pay your bills online simply increases the chances of you being paid as a visit to the bank isn't necessary, payments can be made by credit card, if cash is a bit tight and part payments can even be made driving cash into the business quicker.
Stricter Security Measures - 3D Secure, SSL Certification and partnerships with established payment gateway providers all afford businesses that extra level of security. Also, by communicating the security features of their site can actually increase the number of people using the site, as recent research suggests that almost 70% of us would be more willing to pay online if they knew that the site we were using was secure.
Cost and Manual Intervention - a reduction in the cost is evident when we have implemented these sites for our clients, reducing the need for manual intervention in payment processing, reducing the need for PDQ machines because any staff member can have access to process payments from their desktops and the automatic creation and delivery (by email) of invoices/receipts.
The benefits of marrying those ‘pros' above together with the benefits of outsourcing to an industry white label specialist mean that companies benefit from both online and offline expertise, resulting in an offering that doesn't ignore the importance that customers place on the traditional payments process and moving with the marketplace to ensure that your business is always in a position to collect as much as possible, as quickly as possible and by the most cost effective means.