By 2025, the digital payments market is projected to increase 13.7% from $3885.57 billion to $8686.68 billion. As more and more products and services enable the ability to digital payments, the market is set to keep increasing. Today, around 5.2 billion people are using digital payments and it is set to increase to 6.1 billion in 2023. An increasing amount of people are utilizing digital payment solutions in their lives to improve efficiency and the ease of payments.
As the increasing amount of the world population innovates their payment processes, organizations need to ensure to match the pace of their members. Managing your community and matching the pace of innovation your members as an increasing number of them switch to more digital services may seem like a difficult process. However, a few improvements to your payment collection solutions can keep you on track.
Here’s some tips and strategies to implement to your organization to create a smoother and more efficient payment collection strategy.
Reminders for upcoming payments to your members will be a beneficial addition before you collect payments from them. Reminders allow your members to be prepared to make the payment and has the added benefit of a streamlined process for you to receive your payments. When members do not make timely payments, it causes your process to slow down and become less efficient.
Reminders for payments that are due allows your members to pay on the day that the membership is due. These reminders can include invoices that let them pay straight away. This can significantly improve the efficiency of your organization receiving payments. In addition, these reminders create an easy solution to your members paying the membership in a timely manner, for they can pay through the reminder without additional time consuming steps.
Reminders for payments that are overdue to your members is an additional reminder for members to still make a payment. Late payments by some members are unavoidable and a simple reminder can allow them to recollect that they have a payment due. This additional layer of reminder serves as a notification for your members that there could be penalties for not making the payment soon, depending on your protocol for missed or late payments.
Automatic Recurring Payments is a beneficial policy for your organization whether or not your members pay an Upfront Payment or follow a differing Payment Schedule. Efficiency in receiving payments is important to an organization and Automatic Recurring Payments would be useful to your members as well as you when payments are due. Automatic Recurring Payments can be an option that members can opt in or opt out of. When members opt in, they no longer have to worry about payments because their payments would be automatic regardless of what payment schedule they have decided on. This strategy will be beneficial to your organization because these payments do not need to be followed up on. Once the due date hits, the payment will be received by the organization.
Upfront payments are an ideal payment strategy when collecting payments from your members. By having the upfront annual payment, you ensure that your members are committing to a full year of membership within your community. This can also ensure that the time you spend chasing payments will be reduced compared to a payment schedule. This may be beneficial to your organization or community, but it may not be the best solution for your members.
Payment schedules are important to consider implementing because some members in your community may not have the means or the cashflow to make a one-time upfront payment. Payment schedules increase the affordability of your membership by spreading out the payment between multiple instances. This allows your members to have the ability to pay when the time comes to collect payments.
Payment schedules can be defined by you and you can allow your members on a quarterly, monthly or a weekly basis. Ensure that your members stick closely to the payment schedule plan that they have chosen to do, to ensure that they time processing, chasing payments, and keeping track of the payments are reduced.
Centralized payments hold a lot of merit in an organization’s payment process. A digitized tracking system can improve your organization’s payment process by accumulating all your payments into a centralized location. This negates the need for a paper copy that would require a filing cabinet, which not only takes up physical space, it increases the chances of payment information going missing. With a digitized tracking system, you can send reminders, charge overdue fees, and search for payments with ease in contrast to a paper payment system.
Faster processing speeds can be achieved with a tracking system, in addition to, processing overdue fees, and reminders with ease. With a centralized tracking system, you no longer need an employee or a team of employees tracking every payment a member makes. A digitized tracking system can process large amounts of payment data in seconds, which not only increases efficiency but frees up your employees to assist in other projects your organization may deem vital.
Increased accuracy is an additional benefit with a Tracking System. With an automated tracking system, overdue payments and fraudulent payments can be easily flagged by the system. It would no longer require employees to process payments one by one and track down individual membership payments that are overdue or fraudulent. In addition to this, employees, unlike a digitized system, have a higher chance of overlooking an overdue payment. A paper based filing system also has its disadvantages in accuracy because paper files can be misplaced and create another predicaments for your organization.
Defined protocols for missed or late payments are a beneficial way for your organization to incentivize your members to make their payments more promptly. You could set a grace period of a week for your members to make your payments, however, if they do not pay pass their grace period, they can be charged a fixed fee or a percentage increase on their payments, each period of time defined by your organization, if unpaid. The overdue payment fee is not a revenue model that your organization should pursue, rather it is a indication to your members that payments need to be made in a timely manner.
Protocols for missed or late payments needs to be clearly stated to your customer. If not clearly stated to your member before they miss their first payment, it could cause rifts between your organization and your members. Your organization must make it clear that members need to make their payments on time and that there will be penalties if they’re not made on time.
Multiple payment options gives your members different options to pay you. Sticking to one type of payment, such as debit card payments, may be the most beneficial to your community or organization. But you may want to consider the fact that your members may have different preferences when it comes to paying membership fees. This is why you should ensure that you consider using multiple payment options to be more accommodating to your members. Different types of payments that could be considered could be:
Incentives for early payments can benefit the organization and the members. Members will know that they need to make their payments eventually and if there are incentives to make payments early, their member loyalty will be established and it can speed up the payment process. These incentives do not need to be large expenses on the organization’s behalf. These could be some small membership benefits such as a free week if they make all their payments early over the course of a year.
Transparency about your payments is an important aspect. Members who are clear about the payment dates, the payment structure and the protocols for missed and late payments are less likely to have a issue about the payments when the payment due date arrives. Your organization needs to keep a clear line of communication with your members to ensure that they understand the penalties that occur when a payment is missed.
Transparency also creates loyal members who will continue their membership and are more likely to make all their payments on time. Transparency does not need to be only about payments and overdue fees, it can relate to security of their information and how it is stored and your organizational values. Members no longer believe that ignorance is bliss and they will want to know everything, and open communication fosters trust between an organization and its members.
If you are not transparent about your organization and a member finds information that disproves the information that you are conveying to them it destroys trust. When trust is no longer present, the members are no longer loyal to you, and they are likely to find another organization to solve their problem. Transparency fosters loyalty and loyal members are likely to stay with the organization and continue making payments to be a member.
Are you interested in learning more about how to take your payments digital for your community? Contacts us at Paygage today and we'll show you how it works.