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Most people will fumble about for change when a merchant doesn’t take card. The payments podcast reviews how digital expectations have evolved when it comes to getting paid.
No more waiting around for a cheque to clear, this episode looks at innovative payment methods that help a business with customer retention and make a seamless user experience.
Rich Williams: Whether you get paid daily, weekly, or monthly, there’s a preconceived idea of when and how you’ll receive your payment. As technology advances, so do our expectations. So, what does this mean for how organisations process their payments?
Hello. I’m Rich Williams, host of the Payments Podcast. Today, we’re discussing how organisations keep up with the digital expectations we have about getting paid, from more traditional methods, and, also, looking into the future.
Discussing this topic with me today is Jon Mahoney, who is the Head of Digital Enablement at Bottom Line. Hi Jon.
Jon Mahoney: Hi there, Rich.
Rich Williams: So, Jon, welcome back. Let’s start by looking at the way things used to be in the payments world. What mechanisms were employed and how they’ve evolved over time? For example, are organisations really still using cheques?
Jon Mahoney: Yes, they absolutely do. So, a lot of businesses carry on using cheques for a number of reasons. Probably the most notable is that of issuing refunds. So, sending payments to someone when you don’t already have their bank account details on file.
So, if, for example, you’re an insurance company, and you have taken a one-off payment at the start of the contract, maybe you took that via a debit card or some other payment mechanism. Halfway through the contract, for whatever reason, you need to make an outbound payment.
A lot of insurance companies still use cheques to send money out that way. Now in the consumer space, we really do see cheques rapidly tailing off, and, actually, there was a big press story a few years back of taking them out of circulation altogether.
I think it’s something, actually, that will just happen naturally. As I’m sure we’ll discuss today, businesses have now got far better options for making those kinds of one-off payments, when they don’t have bank details available.
Rich Williams: Okay. As you said, we’ll explore that in a bit more detail, later on, I’m sure. There is still relevance for cheques. You said there are better options available? So, how do these more traditional methods of getting money out to people, individuals, or businesses, compare to what we see available to us today?
Jon Mahoney: So, going back to what we were just saying, it really comes down to the reason for cheques persisting. So, as I mentioned, the most common reason is not having information available to you. So, whether that’s data on your customers as a whole, or whether that’s just account number and sort code, and those are the pieces of information that you need to fill in. What we are seeing businesses really adopt now is a digital approach to that.
What I mean by that is having the customer either go to a landing page or a website, to request the way in which they want to have the money sent back to them. Thinking of consumer examples of this, if you are lucky enough to have a tax rebate, you’ll be able to put in your bank details in there and actually tell HMRC where to send the money, as opposed to just having a cheque posted out to you.
If you’re like me, and you don’t really visit the bank physically anymore, they really are a pain to physically pay in, at the very least.
Rich Williams: So, there’s an element here then of giving some choice to the recipient and there’s probably some extra detail provided, through the more rich data available through these other options of receiving the payment. A lot of that is considered very much the norm now Jon. So, what other differences are we beginning to see in how funds are received?
Jon Mahoney: So, there are new technological advances in the industry, in terms of how money can move. So, to date, as an individual to get paid, really, the only way of doing that was to have, say, a cheque. Sometimes you would be sending a mobile payment. So, we’ve seen systems such as MPay and Pingit, from the banks, really try to take a hold.
Actually, we’re now seeing more advances in that space. So, we’re actually going to see mobile payments, I think, really taking off. A big reason for that is the advance of challenger banks. So, if we think of the likes of Monzo, Starling Bank, etc., if I were to walk out of our studio and go and speak to any of the other members, and particularly the younger members of the team, within our organisation, every one of them has either a Monzo card, a Starling card. Very few really have the old nine banks, and there’s a reason for that.
That experience is far more in touch with the way in which they absorb and consume other apps on their phone. The signup experience for these systems is far more intuitive, it’s far more straightforward. So, signing up and sending your mate a payment for a dinner that you had last night, is just a more intuitive experience, when it’s just a form that you’re filling in.
That ties back to that expectation for your customers to be able to ask for how they want to be paid. Again, in a situation such as a refund, or, some other example, such as that.
Rich Williams: So, Jon, do you think that the demographics, so, millennials versus Gen Z, Gen Y, for example, has an effect on what the experience expectations are likely to be?
Jon Mahoney: Yes, absolutely. Again, just even using our own organisation as a sample for that, the mindset completely changes. Millennial is a real kind of fluid term. Because it can mean a whole bunch of dates. So, I tend to apply the… if you’re born 1985 onwards branch of thinking.
Those millennial… that millennial group has really now moved into a position of authority and a position of spending power. So, consumer spending power, yes, but, also, in a B2B space, those people are actually the people that now, if not making the end decision, on a purchasing decision, they’re very much influencing the decisions that are made.
Rich Williams: Jon, that leads really nicely onto the next question. So, if the influence of the mechanism of fulfilling payment is coming from the recipient, what can organisations do to ensure they’re actually meeting the needs of their customers?
Jon Mahoney: So, first and foremost, if you’re thinking about your recipients, or if you’re thinking about your kind of end-user, as it were, note that their needs are ever-changing, and they are ever-evolving. In particular, if you’re dealing with anyone who has, kind of got that, as I say, 1985 onwards mindset, that millennial which seems like it’s such a young demographics actually is not so much anymore.
Being able to adapt quickly and being able to change experiences, update experiences. So, if we think about web experiences, things that allow you, as an administrator, to quickly adapt, brand, change the experience. Add additional functionality at the click of a button. Switch things off, tailor things around, etc.
Where we’ve really moved away from, as organisations, as a whole, is the old start a project, build it out for months and months and months and then deploy it and hope that it’s right. Because invariably, it’s not right, it needs tweaking, it needs changing. That’s going to end up being extremely costly for most organisations.
So, we hear the term ‘cloud-based’ and I almost feel like it has kind of gone without saying now, but solutions that are hosted by software organisations or by big tech companies, they really are the way to go, as much as possible. There’s a whole host of different kind of hybrid approaches, that organisations can take. That’s the way that you’ll really deliver great customer experiences.
Rich Williams: So, aside from having a strategy which allows you to be agile, make quick decisions, and be reactive to what your end users, or your customers, are actually demanding, how else does being in the cloud make the communication with your customers easier, thereby enhancing their experience?
Jon Mahoney: So, what it really allows us to move to as organisations is a far more real-time and, I hate to say it, but data-driven approach to customer experience, customer delight. What I mean by data-driven is that, historically, data formed into lots of different pools within your organisation.
So, if you had a whole bunch of different deployed solutions, it was up to, perhaps, the people who were taking a telephone call, to log everything. It was up to people who happened to have a conversation, while out on the road, to come back, remember the conversation and log that back in.
Moving to a far more self-service and digital approach to dealing with customers means that all of that information is coming into a single or central system. You’re able to have the customer, in their own words, describe what they’re after. So, whether that’s transcribing solutions for, kind of, meeting systems that you’re using, whether that’s feedback mechanisms within the products that you offer?
Whether that’s, you know, disputes that come back on outbound documents that you’ve sent. So, you’ve sent an invoice out and you want to see some of the discussion that comes back on that. Having hosted systems that can really funnel all that data into one place and allow you to make decisions based on that, really gives an opportunity for a competitive advantage, as an organisation.
Rich Williams: What are some of the other, I suppose, more tangible benefits to organisations, by purposely giving their end-users a better customer experience, when getting paid, or being paid?
Jon Mahoney: The ultimate aim of the whole experience is to leave the customer thinking that you are the right choice, right? That perceived customer value is what you want to have running all the way through.
So, if I go back to the insurance company example, you know, I mentioned earlier? A lot of the time, ABC Insurance might sit there and assume that actually the customer satisfaction and the customer value comes at the point of sale. So, that first experience, maybe their website, maybe how they train their sales staff etc.
Remember that actually it’s usually when the customer is going through the hardest point, i.e. they need a payout from that insurance company. That’s when really an insurance company, as an example, is under strain. So, it’s those kind of… those scenarios where having a really ahead of the game experience allows you to stand out as best in class and really does lead to better word of mouth recommendation and a better chance of repeat purchase from those same users.
Rich Williams: Well certainly, in my experience, a seamless user interface at checkout, does help me spend my money, yes, more willingly, my bank can vouch for that.
Jon, thanks again for joining us today. Very insightful to understand some of the options that are available to a modern business when it comes to paying, and, as an end-user, as well, to see how an enhanced user experience can influence their behaviour.
Unfortunately, that’s all we have time for today. We’ll be back with some more podcasts very soon, and, in the meantime, you can listen to more episodes and all things payments, at the touch of a button, using your preferred provider. We’ll see you all next time.
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