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Reducing Delinquencies: The Impact of Personalized Payment Links

More American consumers are late on their credit card and auto loan payments than before Covid, according to an August report by the New York Fed. The rate of new credit card and new auto loan delinquencies surpassed 7% in the second quarter, up from 6.5% and 6.9%, respectively, in the first quarter. Moody’s predicted those numbers could rise as high as 10% in 2024 as consumers struggle with rising prices and falling savings. 

Yet, for some people, the problems with bill payments are more micro than macro. In a PayNearMe consumer survey, 52% of respondents said they struggle to remember their login information, 42% have trouble keeping track of due dates and 30% cannot navigate the biller websites. 

Each one of these micro problems can lead payers to drop out of the payment funnel before completing payment, often leading to delinquencies. Or, those frustrated payers call the biller’s customer service number to make payment, adding to long hold times, overburdened agents and increased costs. 

One remedy is to remove as many of those hurdles as possible, getting payers directly from the proverbial starting block to the finish line in as few steps as possible. Technology has an answer: personalized payment links.

Personalized Links Remove the Friction

Personalized payment links take customers right to their payment screen in a few clicks—no passwords required. According to research by PayNearMe, 38% of consumers said that receiving a text message or email reminding them when a bill is due along with a link to pay would make paying bills easier. 

Roger Portella of PayNearMe
Roger Portella of PayNearMe

It’s easy to get started helping your customers with the assistance of your payments technology provider, which will provide the links and send the messages. When a customer opts into the program, the payments provider begins by sending regular payment reminders a few days before the bill due date that contain a personalized link or QR code. The customer simply taps the link or scans the code to get directly into the payment flow. 

The customer can also select how they want to receive the links: SMS text message, push notification, email or paper statement. For those who prefer receiving a paper bill, the link can be contained in a QR code printed on the statement.

Three Ways to Boost and Measure Success

Once you have your system for personalized payment links in place, you can use data to fine-tune your strategies and measure improvement. Here are three examples:

  1. Develop targeted messaging. Everyone can benefit from personalized payment links, but customers with two or more delinquencies or with a history of customer service calls are especially good candidates. Your payments provider can identify those key customer groups and help you develop and disseminate effective messaging that speaks to their specific pain point. For instance, “Don’t spend time on the phone paying your bill when a personalized payment link can help you get it done in only a few clicks! Here’s how it works.” 

    As you experiment with different messaging, be sure to have your payments provider track how many recipients open the message and click their personalized link and whether it leads to a positive shift in on-time self-payment.
  1. Have agents educate callers. Whenever a payer calls a customer service agent to pay by phone or get help with a simple payment problem, the agent should recommend personal payment links. What works well is to have the agent ask, “May I send you a link to get you right to your payment screen?” and then stay on the line with the caller until payment is complete. By demonstrating how easy self-pay can be with a personalized payment link, the next logical step is to suggest the caller sign up to receive their link within a regular reminder message.

    Your payments technology provider can help you develop a script for customer service agents and track how many people register for personalized payment links based on that interaction. You can even create incentives for agents who sign up the most customers using this process.
  1. Time the distribution of messages based on data. Send payment links on the days most likely to yield successful payment. How do you know that information? You look at payments data both from your own payers as well as your industry as a whole. Your payments provider should be able to provide that data as well as helpful analysis on any patterns or anomalies that might guide your strategy.

    For instance, PayNearMe has found that payments made at the end of the week have much lower rates of decline, likely because that’s when most people get paid. Timing reminder messages and links to arrive on those days will increase the likelihood that recipients will follow through on payment immediately doing so successfully.

    Data can also guide other elements of your program, including keeping track of which wording prompts the desired action for individuals or groups of customers. That includes messaging before the due date, to encourage on-time payment, or once the payer is delinquent, to initiate a repayment plan. You can even incorporate artificial intelligence and machine learning to automatically generate and disseminate messaging to individual payers based on what has historically resulted in the desired action for that person, or persons like them. 

Easier Payment – No Matter How the Economy Unfolds

Whether or not payment delinquencies return to normal levels in the future, your organization can motivate customers to pay on time now, without costly customer service involvement. That’s the promise of personalized payment links. They take a multi-step process that can easily trip up customers, and make it as easy and intuitive as the other activities they do on their mobile devices every day.

Most importantly, don’t go it alone. Look for a payments technology provider that offers that service, along with the data to help you improve adoption and measure success along the way.