At Dukes we've been quick to adopt online payments and new tech like Google Wallet to make sure anyone who is willing to pay their debts is able to do so. Why? Because ‘new’ payment methods are no longer just a tool for early adopters – they're becoming an essential.
Last week I read that the 2017 EY FinTech Adoption Index discovered that 50% of consumers globally already use FinTech transfer and payment services – and 65% say they will do so in the future. What’s more, there’s growing evidence that ignoring these trends could have a serious impact on your business.
Considering customers (and debtors)
You don’t need to put too much effort into stats like these to understand just how important it will be to cash flow in the future. I read a report by Barclaycard which showed that 15% of shoppers have abandoned purchases because they couldn’t use ‘next-gen’ options (like one-click ordering through PayPal or digital personal assistants). This figure rises to 29% among people aged 18-34. Not only that, but it collectively costs SMEs a staggering £1.6bn per year.
This isn’t just an issue for retailers, however; it’s also a potential solution to the late payment crisis across all sectors. The Federation of Small Businesses estimates that a shocking one in three remittances to SMEs are late, while research by the Prompt Payment Directory found that 36% of small business owners have sacrificed their salary because of delayed payments. Ensuring that clients have no excuse for falling behind could help reduce these numbers.
Protecting your reputation
There’s also the matter of reputation. Losing purchases doesn’t just mean losing individual sales – it could also mean lost customers. EY points out that the new tech is being driven by new services and new players, and, if you don’t keep up, you could miss out.
In our field, however, the potential for reputational damage is greater still. Scrutiny in the form of reports like Taking Control, published by a group of debt charities, is rightly critical of enforcement that fails to make it easy for debtors to pay. A StepChange survey reveals that 24% of debtors have tried to arrange repayment over the phone, only to find enforcement officers insisted on visiting their home to receive the money. These kind of results paint a picture of a sector that’s at best backward and, at worst, intimidating.
It’s not fair on those who seek to implement affordable and manageable plans for people in debt. It also makes it harder for us to assist clients who genuinely need support to maintain their cashflow. If we could be more forward-thinking in how we serve our clients' financial needs, it would benefit not just our business or even our industry, but the wider economy too.
Many thanks for viewing my post; I hope you found it useful. If you did, please feel free to share it with your network. And, before you go, would you use the comment section below to let me know what you found most interesting about what I had to say and how it was relevant to your own circumstances?