It’s Never Too Early to Begin Improving Your (or Your Customers’) Payment Processes

For any business, profitability is the oxygen that fuels growth needed for long term success. Improved profitability, however, comes both from increasing revenue and reducing costs.  Even while you’re focused on new customer acquisition and growing existing accounts, it’s never too early to think about achieving optimal operational efficiency -- and combining better customer experiences with lower costs.   

Improving payment processes may seem an unlikely area for significant impact to profitability; however, it can be an area rich with opportunity, particularly if your business serves others with processes that include moving money among multiple entities.

So, think again about the benefits of embedding improved payment processes via APIs to power the ability to automate self-service functionality for your clients and their customers for multiple use cases to receive, manage and send payments including:  

  • Multi-source inbound payments
  • Aggregation of accounts
  • Intelligent connected wallets
  • Borderless payments
  • Cash and non-cash payments

Receive Multi-sourced Payments 

The ability to accept and manage funds received from customers or partners anywhere in their local currency -- with or without merchant card processing fees -- does not have to incur additional bank fees nor does it require paying banks to handle the currency exchange associated with receiving or distributing payments.  Using intelligent digital wallet architectures, payments can be received in many forms - ACH, wire, credit or debit card - and stored in the digital wallet for disposition. And these funds can be made immediately available for distribution to multiple payees. Payment workflows can be designed to automate both the inbound and outbound flows as a single process while creating all the necessary information for reconciliation, compliance and tax reporting as needed.  

Manage Aggregated Accounts Using Intelligent Connected Wallets  

Using digital wallets also enables simplified aggregation of funds, so that payment flows can be designed to receive, manage and distribute funds to nearly anyone, anywhere on behalf of approved customers and partners.  

While traditional banks can create trust accounts for managing client funds in separate accounts, the expense and internal overhead required to manage these accounts manually creates significant resource costs that in many cases are simply not warranted. Every digital transaction is uniquely identifiable and traceable to source for full transparency.

KYC compliance data can be automated to collect information at both an account and transaction level and processed against multiple terrorist and AML lists dynamically.   Doing so can be a tremendous cost saver as it eliminates the need for the banks to manage any KYC requirements for your payment processes. They simply must have completed the KYC requirements for the ACH account-holders at either end of a payment process to create their account.  A process which, by definition, they have already completed at their own expense, not yours.    

Send Borderless Payments 

Whether your sending payments directly to your business partners and customers or you’re developing a system to manage this on behalf of your clients and their customers, another major cost-driver is conducting business in multiple currencies.  Eliminating wire transfer fees is a significant cost-saver. Enabling your payees to do so as well, yet another benefit of using an intelligent payments platform.

The ability to send payments to anyone, anywhere requires implies the ability to send payments in many currencies.  This can be managed by creating digital wallets in each of the required currencies.

However, in many cases it is operationally more efficient to simply offer a currency exchange -- so that the recipient can manage the transaction and bear the cost of the exchange.  Enabling this to be done while still on the payments platform ensures that they can do so at rates far more favorable than they can if the exchange is completed at their local bank.

Cash and Non-Cash Payee Options

 As mentioned above, enabling payees to select their form of payments can create a better customer experience and eliminate unneeded costs. Cash payments can be made via ACH or wire transfer.

Beyond these cash option, there are alternative payment forms that, if offered,  payees may prefer. These include prepaid Visa debit cards or digital gift cards from major retailers on their country or even PayPal.  

Research shows that recipients prefer choice but, depending on your use case, it may not be appropriate to offer.   You can direct payments to any singular choice as needed. And while, recipients report that they prefer choice, the vast majority (90%+) will elect the cash options.  

Offering choice is also central to the automated self-service capabilities that make the customer user experience for payees optimal by giving them control.   They control their information completing KYC and tax compliance data when/if needed as part of transaction -- rather than upfront when many find requesting such data as intrusive and often will not provide.  Likewise, if offered the choice of how to receive payment they once again are offered some control of their  benefits.  And lowering barriers to customer usage and utilization is critical to achieving the user acceptance needed to realize all of the cost savings inherent in the automated processes using an intelligent payments platform.

These are but a few thought starters.  The real question is: How are you going to improve your payment processes to lower costs, optimize efficiency and improve profitability starting now?   

We’d love to help.






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