Every business eventually reaches the point where its revenue either becomes real or disappears. This point is referred to as the moment of payment. Whether a sale has just been closed, a service has just been provided, or a membership has just been initiated. If a customer’s payment fails to process correctly or take too long to do so, the negative impact on the business is felt immediately. This is why we believe increasing a business’s payment success rate. Which means creating a payment system that reduces friction points in the payment transaction process. Also, it develops trust with customers and creates an effortless experience for customers when they pay for goods or services.
The payment success rate is defined as the number of successful payments made on the first attempt compared to the total number of payments attempted. When businesses experience high payment success rates, the cash flow of the organization is predictable. Additionally, operations run smoothly, and less time is spent chasing down payments by your team.
When businesses experience a low payment success rate, the growth of the company slows down. The ability to maintain relationships with customers also becomes strained, and sustaining long-term growth becomes increasingly challenging. Many customers don’t refuse to pay for their orders, they simply encounter outdated payment processing systems. Essentially, limiting the types of payment methods available to them, and lack of clarity in billing process from manual billing.
Reason Why Payments Fail
Payment failures should be understood in order to help businesses improve their payment success rate. Payment failures occur often because businesses use outdated payment methods or systems and have a limited payment processing options available. As well as, they are unable to provide good user experience, have complicated checkout processes, require excessive information on forms. For example, there is too much product information or too many fields, and it fail to provide enough payment channels.
In addition, there are technical problems that slow down the payment process, like, payment gateways. These systems that are incompatible with payment types and renewal invoicing/follow-up processes. Which creates problems for businesses. Such as, a missed invoice payment. These factors all create friction in the payment process for businesses, resulting in reduced first-attempt collection rates. Regardless of whether the customer is planning to make a payment or not.
Designing a System That Works
For high-performing companies, payments are an integral part of the client journey rather than an administrative duty. Accessibility, flexibility, and automation are the key components in a solution that consistently grows the probability of payment success.
Accessibility enables a client to make their payment when they engage with the company, regardless of where they are located. Flexibility provides clients with the ability to pay using the payment method of their choosing. Whether it be a debit/credit card, ACH, eCheck or mobile wallet.
Through the use of automation, organizations manage recurring payments, provide reminders for missed payments, and automatically re-attempt collections until the client has made a payment. By automating payment processes, organizations eliminate the unpredictability of collections. Ultimately, transforming them into processes that are fully predictable and require no manual intervention.
Strategies to Increase Collections
By utilizing the best practices outlined, it will be easier for a business to increase its chances of receiving payments. A business can substantially increase its collections by automating the billing and including a variety of payment methods available.
Major Steps to Take
- Provide customers with both credit card and ACH options for payment to provide them with security when they make their decisions.
- Automate the billing process for memberships, subscriptions, or agreements.
- Provide a secure portal for customers to store their payment information. In order for them to easily access it without having to worry about a declined charge.
- Use automated notification systems and receipts to help minimize the number of late payments.
- Utilize retry systems for failed transactions to provide the best chance of success on the first attempt.
If these steps are taken, they will eliminate or significantly minimize the friction and uncertainty that are often associated with making a payment. When used correctly, they will provide businesses with the opportunity for more rapid payment collection, reduced amounts of declines, and greater predictability in their revenue streams.
Leveraging Technology for Success
Modern payment solutions offer more than just a means to process payments. The ability to report in real-time on transactions, monitor transactions and manage customer accounts provides businesses with the opportunity to identify problems as they arise instead of waiting for them to turn into revenue loss.
Tracking declines and failed payments along with monitoring patterns of repeated payments gives businesses the ability to proactively improve systems in order to provide a better experience for their customers. An integrated payment solution will provide consistency when accepting payments whether online, in-person, on mobile devices, or over the phone, all of which can contribute to a greater likelihood of success.
Automation and analytics will equip a business with better knowledge of how they are doing while reducing missed payments and improving the customer experience.
Why GMS is the Best Solution for Small Businesses
Gulf Management Systems was developed to support small-to-medium-sized businesses in maximizing payment success while streamlining their collections process. This is accomplished by enabling the acceptance of payments via an integrated platform that allows businesses to accept payments from customers regardless of how they paid.
The ability for customers to pay using credit/debit cards, ACH bank drafts, and eChecks, enables GMS customers to offer the flexibility that consumers have come to demand, while lowering their decline rate. In addition to this, GMS includes automated billing and subscription management features which can automate the collection process for recurring payments by removing the need for a business to enter manual invoices and allow a business to develop a regular cash flow. Not only that, with GMS you can significantly cut processing costs. All by up to 75% compared to credit card fees! Beyond the savings, businesses benefit from less time spent managing expired or declined cards. Ultimately, you can maximize your collection rates, minimize overhead, and boost your business’s bottom line.
Not only is GMS a secure payment processing tool that complies with PCI security standards, but it also tailors its offerings to the specific needs of each business model, thus allowing small businesses to increase their payment success rates and optimize their collections processes efficiently.
By supporting businesses with the ongoing service and support they need, GMS allows businesses to concentrate on delivering their goods or services while ensuring that their payments and collections processes are handled effectively and consistently.
