Are your payment solutions winning you a share of your tenants’ attention as well as their wallets?
We’re at the HOMES Event this month, so our November blog tackles the question of how to maximise rent collections, but at the same time minimise costs.
The case for automated payment options
Rent is a major source of income for housing associations, but with welfare reforms such as Universal Credit (UC) having a negative impact on rent arrears, we know it’s important to encourage tenants to make regular rent payments right from the start. Our clients inform us that often arrears “spike” when tenants first transfer onto UC, but then significantly accrue after this. In fact, CaCHE (UK Collaborative Centre for Housing Evidence) cites pre UC average arrears of 1.9%, but post UC arrears of 8%.
This inevitably leads to fluctuations in cash flow and possible covenant breaches on loan arrangements, and might even threaten the financial viability of smaller associations.
What’s certain, is that everyone we’ve consulted with has or intends to digitalise their rent payment services to reduce transaction costs in order to offset the increased revenue risks of UC.
Our debt collection clients tell us that PayTel’s automated payment line has dramatically increased their collection levels. Payments are made by their customers regularly and out of hours, sometimes at the very last minute and are often the result of callers trying different payment cards. Payments can be anonymous and free from potential embarrassment, and made at a time that suits, which definitely encourages people to “have a go” at paying.
Secure payment solutions to match payment trends
With 94% of us owning a mobile and card payments projected to reach £942 billion in 2026, it’s imperative that rent collection processes match today’s ‘on the go, card payment’ society. With people actively avoiding social interaction when making payments and considering “security and privacy to be just as important as speed and convenience” associations are right to review their collection strategies. Our automated payment products mean tenants can use the familiarity, convenience and anonymity of their own phone to make secure payments from anywhere and at any time, 24/7.
PayTel Assist – a best-fit payment solution ‘during office hours’ and ‘out of hours’
PayTel Assist offers a PCI-DSS approved, automated solution. Callers are guided through a series of short prompts to enter card details on their telephone keypads. PayTel takes payment and provides confirmation with transaction reference numbers, either via SMS or voice. No sensitive card details are stored, transmitted or processed, de-scoping your payment processes from the burden of PCI compliance.
Assist can upload your client database in order to match callers to their accounts. A caller’s outstanding balance along with payment details, for example, can be spoken to him or her. A unique phone number, published as your own dedicated 24/7 payment line, can front your branded service.
Associated SMS services including multi-factor authentication can further enhance the flexibility and security of payment operations. With SMS payments predicted to achieve an explosive year-on-year growth rate of 28% and with text messages, as opposed to emails being read within 3 minutes as opposed to 30 minutes, SMS services, including timely payment reminders, are making a difference to our clients’ revenue collections.
Complementing the efficiency of Assist, PayTel Collect allows agents to process payments with outbound calls. Agents simply connect to Collect’s secure platform before entering a tenant’s contact number. Once connected, the payment is processed in the same way as with inbound calls. As with Assist, the payment process is completely secure and de-scoped from compliance: no sensitive card data ever comes within reach of an agent or any call recording equipment.
Payments from your tenants’ homes – ‘field payments’
Using your branded service, customers can make card payments from home. Income officers might otherwise have no alternative other than to accept payment by cash or cheque, resulting in costly handling and processing difficulties.
Customers can instead call your dedicated payment line from their own phone. Alternatively, your officer can instigate the call on his or her phone and then hand this to your tenant to enter their card details. Again, once payment is complete a transaction reference number is spoken and/or an SMS sent.
What’s wrong with increasing the flexibility of DD – direct debit payments?
Well, on the face of it, not a lot. However, UC claimants will be receiving their payments on different dates, so the number of DD payment days you offer will have to increase significantly. Obviously, this involves higher costs. For smaller housing associations, this may prove prohibitively expensive.
Furthermore, tenants are often reluctant to pay rent by DD. Indeed, rent is likely to be their single most costly monthly expenditure. This fact coupled with the uncertainty and timings of UC payments, understandably leads tenants to prefer to keep control of how much they pay and when. They are more likely to make smaller payments, more often and at odd intervals to meet their rent liability. PayTel allows them to take advantage of a dedicated payment line 24/7.
What about increasing payment staff?
We’ve spoken to our clients and they tell us it’s too costly. It seems that income officers, for example, are in high demand, with the consequence of a hike in salary costs. Obviously, there’s a space for PayTel to help your officers take payments at a customer’s home, but automation for rental payments undoubtedly saves time and costs.
Our clients consistently report that the addition of Assist helps increase customer payment revenues as well as reduce collection costs. Our figures tell us that six or seven self-service IVR calls cost about the same as a customer-to-agent call.
So, to transform late rent payment days into good payment ways – call us now for a free consultation on 0333 202 1555 or email us at firstname.lastname@example.org to find out more.