The effect of Coronavirus on company finances has been stark, hitting orders and revenues for many types of businesses.
This has highlighted the importance of managing outstanding invoices, and one of the key priorities is to make it easy and simple for customers to pay. After all, 58% of Europeans who make a late payment say that they have just forgotten to pay their bills![i]
Sending your invoices via text can help you do this. Here are six reasons why:
One of the most common methods of payment is via bank transfer, often because it avoids card transaction fees (which can be up to 3%).
Payment by bank transfer is now easier with the increased popularity of banking apps. However this method still requires input by the customer to log on to their banking app, and manually input the bank data of the payee’s account and invoice amount. This makes payment cumbersome and adds inertia to the payment process.
A similar situation is true for card payments over the phone. These usually require talking to an IVR (interactive voice response) system or human attendant, and inputting card details. This requires costly agent time and/or systems for the business to protect card security and comply with PCI DSS card security regulations.
As more and more customers are on their mobiles, it’s a cumbersome experience for the customer to get out their card and manually input details.
Alternatively, offering easy mobile card payment via text eliminates these problems by reducing data entry and the requirement to interface with multiple systems to make a payment.
And making invoices more convenient makes them easier and quicker to pay!
Emailing is one of the most common ways of reaching remote customers.
The problem with email is that it’s overused, and trying to engage your customers with yet more email just results in diminishing returns.
Emailed invoices get submerged in cluttered inboxes or just ignored as low priority, especially with a younger demographic. Reminder emails (and also phone calls) can suffer the same fate, as well as requiring additional time and effort from the business to coordinate and send.
Postal invoices aren’t much better with statements getting ignored or lost in the post. And with no “read receipt” it’s impossible to know if your invoice ever arrived.
The truth is it’s hard to get your customer’s attention.
The old channels of email and phone, whilst still popular, are not where the growth is. 90% of consumers now want to connect with businesses via texting[ii] as it’s just more convenient for our mobile-first lifestyles.
And getting customers’ attention is where text really scores.
SMS open rates for outbound texting is in another league compared to email: 95-98% open rate, with 90% opened within 3 minutes with a 45% response rate[iii].
Consumers are 7 times more likely to read a business text message than an email.
Busy customers love texting and text messages engage directly with consumers on the most important piece of digital real estate they have – their phone.
So this makes text a great channel to get your invoice noticed with your mobile customers - it’s practically guaranteed for it to be seen almost as soon as it’s sent.
The next objective is to make sure payment requests are easily actioned.
Instead of navigating manually to a payment site, most accounting apps now incorporate a “Pay” button within an emailed invoice for paying by card.
This usually navigates to a separate page, and if it doesn’t have the capability to prepopulate card details, the customer needs to get their card out and enter those manually.
This can be a frustrating experience, especially when the site isn’t optimised for mobile data input.
Alternatively, easy payment from within the invoice, without the customer being forwarded to a separate payment page or site, can reduce payment friction.
Customers can quickly review the bill, make any relevant changes to the invoice (eg address) while on the same page, and pay without any further input, thought or action.
Key to facilitating easy and quick payment are inclusion of “Pay” buttons provided by mobile wallets such as Apple Pay and Google Pay.
After checking the invoice, busy customers can pay within the invoice page with just one click. Payment is completed without any need to input name, address, card details or PIN, thus reducing payment friction and increasing the chances that your invoice will be paid when the customer first receives it via text.
The implementation of the PSD2 payment directive and its SCA (strong customer authentication) requirement came into force in September 2019 (although it has been delayed in some jurisdictions), introducing new authentication checks to reduce fraud.
Complying with SCA is straightforward when using a mobile phone, as it uses the customer’s biometric details collected on the payer’s phone to verify the customer. This makes it an ideal device on which to pay an invoice, as it improves authentication and reduces the number of rejected payments.
Whilst increasingly pay by phone and online desktop payment methods will also include SCA measures, they will in most cases also require an additional authentication loop with the customer’s mobile phone, adding complexity to the desktop or phone payment process – if you need to get authentication on a mobile phone, you might as well complete the whole process on the same device!
Sending invoices via text also has the great advantage of leveraging a phone’s biometric authentication features to enable the use of mobile wallets. This eliminates the need for the customer to input sensitive card details into payment sites for each purchase, reducing the risks associated with divulging card details over the phone or online.
This is possible because mobile wallets such as Apple Pay tokenise the user’s card data, making it impossible for third parties to view this sensitive data. This also ensures adherence to PCI DSS compliance for handling card payments by reducing the exposure of all parties to in-the-clear card data.
When a customer pays via a web invoice, it’s also important that the link is from a verified entity, ie the billing party. This can be achieved by setting up payment links using the domain of the business sending the invoice, providing added assurance and verification for the paying customer.
Texting is a convenient 2 way conversational channel which makes it ideal to instantly resolve customer questions about an invoice and any potential reasons not to pay. Texting an invoice also has the advantage of “in-channel” payment.
This means that the customer can view and pay without having to be diverted to another system, and at the same time be able to raise queries about an invoice or payment within the same conversation.
This makes it simpler for agents to respond and quickly resolve questions about the invoice or product, as message context and relevant information is included in the same thread.
Connecting via text also means that you have a personal and direct way to communicate not just for support issues, but also for other areas of customer communication such as product updates, promotions, upsells etc.
This enables seamless follow up, diverting customers from using more expensive channels such as phone support.
Text (and also other mobile message channels such as Messenger and WhatsApp) are conversational in nature which makes them ideal for chatbots.
Chatbots are virtual agents that can do regular tasks without human involvement. Billing chatbots will assist finance staff in the process of sending out invoices at the right time, sending reminders and handling any queries such as account balances, payment dates etc. If payments are late, a billing chatbot can automatically send further reminders, as well as adding on any late payment charges.
These functions can be refined with increasing use of natural language understanding for more intelligent conversations with customers. As well as helping recover outstanding debts and improving cashflow, bots can save significant time for accounts staff in chasing customers and their outstanding payments without requiring direct human involvement.
Another area that is likely to have a substantial impact on late payments is Open Banking. It’s early days for this new payment technology but it promises to reduce the levels of friction and cost for businesses compared to card payments.
Open Banking works on the principal of customers pushing payments to the business rather than business pulling the payment from the customer, so it’s necessary for the push request to be captured in the most customer friendly method. This is where a text message makes a lot of sense as it’s guaranteed to be noticed by the customer and acted upon almost immediately.
The other main benefit is that payments are made almost instantly using the banks’ faster payments network, thereby helping small businesses improve their cashflow - most card payments take at least 7 days for payments to be deposited in a business’s bank account.
Open Banking will in the future also include a recurring payment feature that will allow it to provide services to replace direct debit payments at a more reasonable cost.
Future advances in text and other messaging services generally will make business messaging much more appealing for consumers, with the ability to include quick action buttons, images, videos etc.
Especially important for payments will be the ability to incorporate pay buttons in the message thread, making it even easier to pay within the message conversation itself.
The worlds of payments and communications is changing fast and new technologies can help smooth the payment process for customers, helping invoices get paid on time as well as reducing stress of non payment for the small business owner.
To find out more, please go to www.converso.io or get in touch at info@converso.io, or via text at 07451 277570.
[i] Intrum European Consumer Payment Report
[ii] Twilio
[iii] Twilio
