Product Corner: How To Use Flexible Payment Options To Drive Revenue Growth And Reduce Missed Payments

What if you could grow revenue by an extra 20% this year just by changing the way your customers pay?

 Studies show that businesses that offer flexibility when their customers make a payment can do just that. New payment methods such as mobile wallets and online banking have given buyers more financial freedom, meaning they are more in control and more likely to make a purchase.

Over the last few months, we’ve developed a comprehensive suite of flexible payment options powered by eLinx™, our white-label payment link technology. Flexible payments allow our partners to offer their customers even more financial freedom, promoting inclusion, transparency, and, more importantly, choice.

What Are Flexible Payments?

Our Flexible Payments suite currently consists of three main products:

• Multiple Payment Methods: Allow end users to spread a single payment across several payment methods, like their bank account, credit and debit card.
• Partial Payments: Enable end users to make a portion of payment towards their outstanding balance, great for avoiding missed or late payments.
• Installment Plans: Offer customers the option to set up a payment plan to spread out a payment over a pre-determined period.

Flexible Payments offer businesses a way to enhance customer satisfaction and reduce missed payments by providing different ways for users to make payments. This flexibility helps ensure that customers can manage their payments in ways that best suit their financial situation.

How It Works

Flexible Payments is powered by our payment link solution, eLinx, which is popular with VoPay customers due to its ease of use and implementation. VoPay customers can send eLinx experiences directly to users via email, or embed the entire workflow into their existing platform, fully branded in line with their business identity. 

Flexible Payments is an extension of the eLinx workflow, which already packs a lot of features into a single workflow, including bank account connection, digital debit agreements, and two-way transactions. 

Here’s how a VoPay customer would set up a Flexible Payment workflow:

1. The business creates the eLinx workflow either through API or on our online Portal.
2. The business chooses which payment options it wants to make available to the user.
3. The option terms are dictated by the business, such as the number of payments in an Installment Plan or the minimum amount required for a Partial Payment.
4. The eLinx experience is then sent to the end-user, either via email or embedded iFrame.
5. The user receives the eLinx experience and can choose how they want to pay.
6. They enter their payment information and confirm the payment terms.
7. Both the payor and the business receive real-time confirmation when an eLinx request is completed.

Why Flexible Payments?

• Increase Revenue Opportunities: Offering more payment options can appeal to a broader audience and make it easier for customers to complete transactions.
• Reduce Missed Payments: Flexible schedules, reminders, and multiple payment methods help customers stay on top of payments, minimizing delinquencies.
• Customer Retention and Loyalty: Providing convenient payment options can enhance customer satisfaction and increase retention rates.
• Automated Payment Collection: Streamlining billing processes reduces administrative effort, allowing businesses to focus on growth.
• Scalability: eLinx is easily scalable, making it ideal for growing businesses with fluctuating demands.

Use Cases in Key Industries

Scenario 1 - Lending

Situation: A lending customer has an outstanding loan balance of $100 due for payment. They cannot afford to make the full payment but can pay half on the due date. They communicate this to the lender, and the lender offers Flexible Payments, allowing the customer to pay part of the balance now and the rest later.

Implementation: The lender uses the VoPay platform to set up an eLinx request with Flexible Payment Options. The lender enables both Partial Payments and Installment Plans for the borrower. They set the minimum Partial Payment at $50 and an Installment Plan for $50 upfront, followed by two installments of $25 each, spaced a week apart.

Outcome: The borrower receives the eLinx request and opts for the Installment Plan. They connect their bank account and agree to the terms. The first payment is collected immediately, and the remaining installments are collected automatically.

Result: The lender receives the payments in a timely manner, avoiding default, while retaining the customer thanks to the flexible payment options. The borrower is satisfied with the flexibility and remains a loyal client.

Revenue Growth Impact:

• Increased retention and additional borrowing: By offering flexible payment options, the lender ensures the customer avoids default, which encourages future loan applications and repeat business.
• Cross-selling opportunities: Satisfied customers are more likely to explore additional financial products, increasing each borrower's lifetime value.

Scenario 2 -  Property Management

Situation: A property manager finds that many tenants prefer to pay their rent using multiple payment methods, such as half by credit card and half via bank transfer. Handling these requests manually takes time, leading to inefficiencies and delayed payments.

Implementation: The property manager uses eLinx to send monthly rent requests, enabling the Multiple Payment Methods option. Tenants can choose to pay through a combination of bank account, credit card, or debit card.

Outcome: Tenants receive the eLinx request, input their preferred payment methods, and split the rent across different accounts. The property manager reconciles these payments as a single balance within VoPay.

Result: The property manager saves time, tenants enjoy greater flexibility, and late rental payments are reduced. As a result, cash flow improves, and tenant satisfaction increases.

Revenue Growth Impact:

• Improved cash flow: Split payment options encourage tenants to pay on time, reducing late fees and ensuring more predictable cash flow.
• Increased payment completion rates: Offering multiple payment methods reduces friction and increases the likelihood of timely rent payments.
• Reduced churn: Tenants who feel supported through flexible payments are less likely to leave, reducing vacancy rates and tenant acquisition costs.

Revenue Growth Impact:

• Improved cash flow: By accommodating split payments, tenants are more likely to pay on time, reducing late fees and ensuring the property manager has a more predictable cash flow.
• Increased payment completion rates: Offering multiple methods reduces payment friction, leading to a higher rate of completed transactions and fewer missed or delayed payments.
• Reduced churn: Tenants who feel supported through flexible payment methods are less likely to move, reducing vacancy rates and tenant acquisition costs.

Conclusion

Flexible payment options offer businesses a significant opportunity to drive revenue growth, reduce missed payments, and improve customer satisfaction. By leveraging multiple payment methods, partial payments, and installment plans, companies can cater to their customers' diverse financial needs while maintaining control over payment terms. 

No matter your industry, VoPay’s Flexible Payments suite can be easily integrated into your platform, helping you enhance your product offerings and drive customer loyalty. 

Ready to offer your customers more payment flexibility and grow your revenue? Contact us today to get started!