Remote Loan Payments are Here to Stay — Are You Ready?

COVID-19 may have exposed technology’s limits (Zoom dating, anyone?), but it also opened doors to what technology can do to simplify and enhance people’s lives.

The lending industry is a perfect example. Your customers may not ever purchase a car sight-unseen, but they may very well pay their auto loans remotely from here forward. Consider that more than 50 percent of consumers are now using contactless payments, and according to an OnDot poll, 30 percent of those were going contactless for the first time during the pandemic.

At the same time, some or all of your agents are likely working remotely for the indefinite future. Stanford research reported that 42 percent of the U.S. labor force was working from home full-time due to the pandemic. Despite having to adapt quickly, many businesses are finding a remote workforce works just fine – in some cases, even better.

With this in mind, it behooves non-prime lenders to lean into these remote trends now to develop the smoothest and smartest system for processing loan payments. Here are four steps you can take today to strengthen your remote collections process:

1. Adapt for compliance
Adhering to PCI and NACHA compliance guidelines becomes trickier when your agents work from home. For instance, protecting customers’ card data becomes challenging when that information is shared over the phone without the safeguards you’ve spent years building into your call center.

To reduce your compliance scope, limit the amount of sensitive data your agents handle. You can either have the agents transfer customers to a secure IVR to complete payments or train them to push a payment link to the customer via text messaging or email.

More complicated transactions or insistent phone-pay customers can still be handled by a customer service team working in the call center, but you’ll alleviate the majority of your compliance scope by eliminating over the phone transactions.

You can also enhance security by using tools like virtual desktops, screen timeouts and auto logouts (configured to meet your business’ specific security requirements) and enabling two-factor authentication. You can also set specific permissions for users, allowing only a select group to manage more sensitive processes or information.

Finally, make sure your payment platform has safeguards in place to process payments securely. For instance, PayNearMe clients using full API integration of our platform ensure their transactions are sent via HTTPS and use a secure key only held by the client. For PayNearMe-hosted solutions, all transactions also happen over HTTPS, but end customers can be authenticated based on any data the client provides. All card data is tokenized and stored in an encrypted database.

2. Accommodate all forms of payment
The more forms of electronic payment you can accept (e.g. cards, ACH, Apple Pay and Google Pay), the better your chance of getting customers to participate. And don’t leave out your cash payers. Cash remains a popular and necessary option for a large percentage of consumers, especially those who are unbanked, under-banked or have an uneven credit history.

Payment platforms like PayNearMe provide remote options for these payers by allowing them to pay bills with cash at neighborhood retail locations such as 7-Eleven and CVS Pharmacy stores. To make a payment, the customer simply shows the cashier a personalized barcode on their phone and hands the cashier the cash. The cashier scans the code, takes the payment and gives the customer the receipt.

3. Normalize self-service
Self-service is rising in popularity. One study by Nuance found that 67 percent of customers actually prefer self-service to speaking to a customer representative. Combine that with the touchless age of COVID-19, and you have a sizable customer base ready to pay bills independently. Here are some strategies to normalize self-serve bill pay and get more customers on board:

Use QR codes to make it fast and frictionless: Print personalized QR codes on paper statements that customers can scan with their phones. The code will send them directly to their payment screen without scrambling for an account number or password.

Have callers start with IVR: Some people will be comfortable making their payments independently if guided by the step-by-step instructions of an interactive voice response system. Those who are not can be routed to a live agent.

Prompt often: Incorporate prompts to “set up autopay” or “add to wallet” on all payment communications, with easy links to complete these tasks.

Walk them through it: Train your call center employees to start every bill pay call with, “Let me send you a text or email with your payment link.” By walking the customer through the self-pay process, you improve the likelihood of starting a new habit.

4. Promote autopay
Autopay is ideal for both lenders and borrowers. For lenders, it reduces staff time and reserves agents for more complicated payment issues. For borrowers, it can help prevent late payments, reduce hassle, assist budget planning and simplify their lives.

So why are only about one-third of bills paid this way? In part, consumers simply need more encouragement, incentive and assistance to get the ball rolling. A few strategies to try to include:

Bundle autopay into the loan origination process: Include a recurring bill payment form in the original signing documents. You’ll want to explain what they’re signing, but you can sell the advantages more easily when you’re already going through a high-touch interaction.

Offer a perk: A rate reduction or promotional reward, such as a gift card, can sweeten the deal for customers to adopt autopay.

Give customers options: Non-prime borrowers, especially, may have tricky financial situations where they need to break payments into two monthly payments or pay on specific days of the month. Ask your payment platform vendor if it can accommodate these needs.

Remind and promote: Include prompts in every communication to “enroll in autopay.” You also can design campaigns targeting specific customer segments. For instance, with the help of a payment platform like PayNearMe, you can easily identify customers who have paid late but within the 30-day billing cycle. These customers might eagerly respond to an offer to “never miss another payment” by signing up for autopay.

Train agents to lead: Just like with self-pay, your customer service team should begin and end every call with, “Can I help you sign up for automatic payment?”

These four steps will go a long way in preparing your business for remote payment. By beefing up compliance safeguards, adjusting in-house training, nudging clients toward auto- and self-pay, and working collaboratively with your payment platform provider, you’ll provide better service at reduced cost to your company – no matter what external factors come your way.

John Minor is chief product officer for PayNearMe, leading the product, merchant services and support teams. By combining industry research with client and partner feedback, John ensures that PayNearMe’s solutions continue to lead the market in terms of mobile readiness, ease of use, and advanced bill pay and collection techniques. He plays a critical role in continuing the company’s path of innovation and commitment to making it easy for businesses to collect every payment, via any channel and payment type, every time. John has more than two decades of product development experience in both the mobile and payment arenas. He has held leadership roles at Jasper Wireless, Good Technology and at Motorola, where he helped the company launch its first Android phone. You may reach John at [email protected].