Monthly Archives: September 2018

The word ‘fintech’ pops up regularly in conversations centred on innovation, trade, finance and disruptive technologies.

But don’t be fooled, it’s not just a buzzword. According to Accenture investment in fintech increased from $930 million in 2008 to more than $12 billion by early 2015, and is growing by the hour.

What exactly is fintech?

You may have already correctly guessed that fintech is a portmandea for ‘financial technology’. It’s a term that describes the technology used to support banking and financial services. This includes lending, mobile banking, investments and open banking.

The main goal of this industry is to make financial services more readily accessible to businesses and consumers alike. As attention spans shorten, business transactions speed up and everything steadily goes more digital, people want financial services that compliment this, whether they’re attempting to keep track of finances or looking to take out a loan.

The US, UK & Ireland and the rest of Europe are currently at the forefront of fintech investments overall, with China and India closely following.

How is fintech revolutionising the financial industry?

According to EY’s Fintech Adoption Index, one-third of consumers use at least two or more fintech services. We’ve highlighted just some of the activities that have disrupted the world of personal and commercial finance:

Crowdfunding: thanks to crowdfunding, businesses can now raise money in weeks rather than months and thus be able to launch their products and services much quicker than ever before. Suddenly, entrepreneurs don’t have to jump through so many hoops to get a great idea off the ground.

Mobile credit card processing: accepting card payments through technology like PayPal and Square means that vendors can afford to accept card payments anywhere and with minimum set up effort, which usually means that the sales potential is increased multi-fold and businesses are future-proofed.

Borderless money transfer: currency fees are now a thing of the past thanks to companies like TranswerWise that have revolutionised the way people bank, how entrepreneurs are able to fund their projects and how expats are able to manage payments borderlessly.

What’s the impact on consumer behaviour?

Having the technology to simplify our daily lives in this way is revolutionising consumer behaviour around the globe. Most notably, in Europe, we can now see a drastic shift to using electronic payments. Competition in this regard is incredibly fierce.

All retailers must keep up with the shifting landscape – such as introducing their own mobile loyalty apps or different payment platforms.

At the same time, customers are increasingly more willing to share their personal data in order to receive a personalised shopping experience – yes, on the high street too! It’s not uncommon to receive a digital receipt or have personalised QR codes for a blend of in-store and online browsing and shopping.

Fintech is at the heart of all of these changes and the future looks exciting.

Fintech and Direct Debit

Direct Debit was once merely a resource for collecting ongoing payments. It was a pretty useful one, but its aptitudes were limited. Nowadays, Direct Debit is a front and back end sales aid and an administrator’s ally.

An increasing number of people are choosing to join memberships and subscriptions online. As such, making a long-term payment commitment like a gym membership or car insurance is getting quicker and more simple.

The power is in our fingers. People can sign up from their couch or train commute. With comparison sites on the up, it’s easy to find the best Direct Debit deals spread out over a flexible time period.

Even painstaking failed payment procrastination is a thing of the past. Our own MyPayments portal allows customers to login and manage the payment first-hand before it becomes a growing issue. No lengthy phone-calls. No embarrassment. Hurrah!

 

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DFC is a leading Revenue Solutions Management Solutions provider, handling Direct Debits for thousands of happy customers across the UK.

 

Whilst it is your right to collect deserved payments for your services, we can understand your frustrations. You want to remain cordial with your clients, so demanding payments goes against the grain.

But consider this crazy statistic for a second. 62% of SME invoices were paid late in 2017…

Late payments cost one quarter of UK businesses ten hours a week. In other words, one-quarter of forty-hour week is being used to chase customers. Hours that could be deployed much more usefully and at a lesser expense.

If you’re one of many organisations that’s rightly sick of chasing payments, here are some tips on how you can manage this sticky situation without destroying the relationship you’ve worked hard build.

Avoiding late payments early-on

Sure, new business is exciting. But you don’t want to create a rod for your own back.  Prevention is better than cure, as the old saying goes. The trick is to remove any potential hiccups early in the game.

1. Credit check all new clients – this should give you a pretty good estimate of the organisation you’re doing business with.
2. Ask new customers to pay a percentage up front – if they’re going to be difficult, at least you’ve already been handed a good portion of the money.
3. Ensure that you know exactly who to send the invoices to – most companies will have at least two designated persons who can sign-off invoices so start getting CC happy with those emails.

 

Make sure the issue doesn’t lie with you

Believe it or not, invoices are commonly unpaid because the purchase information or bank details simply aren’t on the invoice. Sorry but it’s true.

 

Navigating the excuses (and there will be many)

Every phone call will come with an inevitable excuse. Luckily, most of these are so predictable they might as well be scripted. So we’ve done just that:

• “We haven’t received your invoice” – the answer to this is to ask the customer to send a hard copy and an email. You can even put a read receipt on the email. Watch them try to get out of that one…

 

• “We’ve paid/are in the process of paying” – “that’s great. Please can you send proof of posting or remittance advice?”

 

• “The only person who can authorise this is on annual leave” – this relates back to our earlier statement about two designated persons who can authorise payments. After all, who’s going to authorise the urgent one the only person who can is away?

 

• “Can I get such and such to ring back?” – start notetaking. Keep a record of who you’ve spoken to and when. Not only does this give you more ammo as time goes on, it will also come in handy if the only possible outcome is legal action.

 

• “We’re waiting for a customer to pay so we can pay you” – this is one of those challenging business scenarios that make everyone’s lives difficult. In this instance, see how much they can pay at that time and work the rest off in instalments.

 

• “I’m not happy with the service you’ve provided” – put a time-barring clause in your terms and conditions stating that complaints about work must be made within a certain time-limit.

 

Migrate to Direct Debit

Direct debits give you, the company, control over payments. We’re not saying late payments are a thing of the past when you switch, but you’ll certainly find them sucking less time out of your day.

Payments come direct from a customer’s account. Unlike cards, which can get damaged or expire, the only way that a payment can’t be made is when an account is empty. As a result, late payments are reduced dramatically.

 

Get someone else to do the hard graft for you

Using a third-party debt collection company or bureau takes the onus off your organisation. It prevents your employees having to handle potentially challenging conversations, so that you can deal with only the good aspects of your partnership.

Bureaus specialise in everything from credit control to cashflow management. They can improve collection rates and save your staff from ever having to chase a late payment again.

 

Finally remember: Some people are just badly organised. So don’t despair. Cashflow is the backbone of your organisation and customers do understand this. Most of the time, they’ll pay up eventually.

 

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DFC is a leading Direct Debit bureau offering a transparent service, with clear pricing and no hidden extras.

DFC’s mission is to make our clients business easier and help improve your relationships with your customers so that they stay longer. You can let DFC collect your Direct Debits, while you concentrate on running and growing your business. Find out more: https://www.debitfinance.co.uk/solutions