Solving the collections conundrum

One thing can be stated about today’s digital payments landscape: it’s volatile. Highly dynamic and ever evolving, the payments industry comes with a plethora of digital payment options from which consumers can choose whatever works best for them. 

An example of the market’s volatility is Amazon’s announcement that it will stop accepting Visa credit cards issued in the UK from 2022, due to high transaction fees charged by the payment processor, before more recently announcing a continuation of discussions. In January 2022, Amazon renounced the idea, instead opting to work together with Visa for a solution. This kind of news immediately brings to mind the kind of challenges and dynamic landscape digital corporates and merchants face.

The global ecommerce market is set to expand by USD 1 trillion by 2025, according to Forbes, a trend that’s been fuelled by the pandemic and the growing need to digitise businesses to survive. To make sure that they match consumers’ wants and needs and benefit from the growth of ecommerce, businesses feel the need to go the extra mile in providing them with as many digital payment methods as possible. However, it can be a strain if you think about having to integrate every new payment method or managing different collection accounts with different providers. 

Collecting money: what are the main challenges businesses face? 

Collections play a huge role in a business’ financial health. However, due to various reasons, many businesses have problems in collecting money. According to Paystand, the average US business has almost a quarter (24%) of its monthly revenue entrapped in overdue invoices. This dent in accounts receivable disrupts a business’ cash flow, sacrificing capital needed for growth, and disrupting the overall business process.

The most common challenges businesses face in collecting money are:

1. Late payments: perhaps the most common challenge businesses is face is not getting paid on time. This results in cash balance and working capital difficulties. 
2. A complicated payment process: having piles of unpaid invoices and a poor collection process might mean that consumers don’t find it easy to pay. 
3. Payment methods: relying solely on cash can cause delays for incoming payments. A business must expand the payment methods it offers (cards, mobile payments) and keep up with the rise of alternative payment methods (digital wallets, QR payments, instant payments etc.) to ease the payment experience. However, the list of digital payment options available to consumers keeps growing, keeping up is a challenge and can even increase the cost of doing business.
4. Consumer experience: ensuring good consumer experience is crucial for a successful business and the payment process is an important factor to consider. Traditionally, the payment process is more operation-centric than consumer-centric and, often, the consumer’s needs are not met. 
5. Managing data and reconciliation: having to deal with data from multiple sources (ecommerce site, spreadsheets, ERPs, etc.) results in a time-consuming process, inconsistent or inaccurate data and sub-optimal reconciliation.

Overcoming collection challenges

As a business expands across multiple geographies, being able to adapt and scale quickly is important. The ability to provide a wide range of digital payment options to consumers easily, with flexible integration options that support an omnichannel payment acceptance, allows businesses to be ready for the future.

An innovative solution can improve the way a business collects money, both online and offline. Standard Chartered’s Straight2Bank Pay is a global omnichannel collections gateway that enables businesses (both to consumers and other businesses) to provide customers with online and offline digital payment options across countries, working with a single provider, a single point of integration, and minimal investment. 

It can also complement their existing collections setup by adding alternative and new payment methods without disrupting their existing flows while opening access to a wider customer base. Additionally, the end-customer has more payment options to choose from, which significantly improves their overall experience and loyalty.

Adaptability to any business 

Today, businesses have the option of offering multiple touch-points to customers, from brick-and-mortar to online stores. With that said, every business model needs collections to be quick, seamless, secure, and cost effective, without sacrificing customer experience or satisfaction.

Online stores

By adding online commerce, businesses gain several benefits such as access to a wider customer base, insights into customer buying habits, reduced reliance on intermediaries, and better control over their brand story. 

However, many still rely on cash due to a fear of technology and associated costs. Additionally, simply moving online only solves a part of the problem, the other part centres around having the right mix of payment methods that customers would be comfortable using. For example, some customers may not have credit cards or be comfortable sharing their card details online. 

Through an online store or mobile app integrated with a one-stop collection solution such as Standard Chartered’s Straight2Bank Pay, a customer can pay with their preferred method such as cards, online banking, instant payments, QR payments, mobile wallets, and more. Additionally, businesses receive real-time notification, resulting in a seamless checkout experience and a faster payment process. 

Brick and mortar 

While going online can be a great decision, the fact remains that some customers prefer going in-shop for their purchases. According to Mood Media, US consumers spent 11% more money and time in physical stores than in 2020 and, even with the pandemic, 86% of US consumers are most comfortable with in-store shopping. For in-store payments acceptance, many businesses continue to rely heavily on cash or cards, not offering their customers the choice to pay with alternative payment methods. Handling cash comes with its risks and inefficiencies, and the costs associated for card acceptance is proving to be expensive for many merchants. In addition, the growing prevalence of smartphones, combined with the popularity of QR-codes, is resulting in a shift in social and buying behaviours. 

Businesses can leverage these trends to introduce innovative digital collections solutions to make it quicker and easier for customers to pay with their payment method of choice. Using Standard Chartered’s Straight2Bank Pay, businesses can enhance the in-store experience for their customers by allowing them to scan and pay using a QR code generated by the Straight2Bank Pay app or their POS device. Also, with this solution customers can pay via a payment link. 

Last-Mile Delivery

According to Valuates Reports, the global last-mile delivery market size is projected to reach USD 66 billion by 2026, from USD 40 billion in 2020, driven by various factors such as the expansion of ecommerce, increase in internet penetration, consumers’ demand for just-in-time delivery, and technological advancements. The key challenge is delivering the package as soon as possible and overcoming any obstacles in the process, including handling cash and any payment friction. The cost of delivery combined with the pressures of same-day delivery puts an additional financial burden on sellers, especially during the festive or holiday season with the surge in deliveries.

Logistics and ecommerce businesses are heavily reliant on last-mile delivery for their success today and they need to embrace the right set of solutions to streamline the entire delivery process. This will enable organisations to reduce their operational costs and create a strong brand by improving customer experience.

With Straight2Bank Pay, organisations are replacing their cash-on-delivery with digital payment modes enabled through the handheld device of their delivery agent, the Straight2Bank Pay app or Payment Link to collect payments on the go.

Bill payments

While many businesses are increasingly moving online and enabling digital payments, invoicing is still an essential function. Generating invoices, mailing them to customers, and tracking the payments introduces many operational processes and overheads across B2C and B2B industries. 

Processing invoices weighs heavily on finance teams and this has been felt even more during the pandemic with organisations adapting to remote working. Pressures around internal reporting and cash flow updates makes real-time data critical for enhanced visibility. Scalability becomes a challenge as businesses expand as it leads to more invoices to manage and hence more resources are required. Organisations are equally impacted by various external factors such as missing invoices and fraud which can lead to delayed payments or disputes. Ultimately these issues may result in an inaccurate view about the company’s financial position.

Straight2Bank Pay allows businesses to get paid faster by embedding all the transaction details within a QR code or a payment link in their invoices. Effectively, making the invoice a payment gateway where the customer is led directly to the payment page pre-populated with all the transaction details. The customer simply clicks their preferred payment method to complete the transaction, eliminating the risk of lost invoices or fat finger mistakes. Alternatively, the solution also allows for customers to self-service by fetching their invoice electronically and making the payment. 

Conclusion

The digital payments landscape will continue to be dynamic, and so will customer expectations. The pandemic has also been a catalyst in businesses accelerating their shift to online commerce. Moving online is no longer a choice but an existential requirement. Straight2Bank Pay can be tailored to different business needs, providing a unified digital commerce solution across all sales channels and business models. If you’re thinking of how to offer customers more digital payment options without needing multiple integrations and managing different collection accounts with providers across markets, Straight2Bank Pay is a solution that can help you. 

About Mahesh Narayan

Mahesh Narayan is the Global Product Lead for Mobile Money & Ecommerce at Standard Chartered Bank, Singapore, responsible for driving the Bank's product strategy globally. He works closely with a wide array of partners including fintechs, mobile wallet providers, payment service providers to design, develop, commercialise, and launch innovative and compelling Mobile Money & Ecommerce solutions for the Bank's clients. He is passionate about helping clients embrace digital solutions to drive efficiencies in their business and promoting financial inclusion. He has over two decades of rich transaction banking experience across digital platforms, sales, product management, product development, implementation, and operations, with several leading financial institutions.

About Standard Chartered Bank

Standard Chartered is a leading international banking group, with a presence in 59 of the world’s most dynamic markets, and serving clients in a further 85. Its purpose is to drive commerce and prosperity through its unique diversity, and its heritage and values are expressed in the brand promise, here for good. Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges.