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4 Reasons Your Small Business Should Offer a Payment Plan
Before the literal explosion of eCommerce, do you remember how upset you would get when you went to a local restaurant or grocery store only to realize that they didn’t accept plastic? That wasn’t really so long ago in the past. And in today’s world, even farmers’ markets have vendors with mobile card readers so that they can sell more of their produce. What, you may ask, does that have to do with offering an option for a payment plan? It is just one step forward into the future where so many businesses don’t offer their customers that option. They either pay in cash or by debit or credit card. If you take a look at the major retailers, you will see that many of them offer monthly payments as an option. Consider the following:
1. Giving the Customer Greater Payment Options
While it is incomprehensible that today’s consumer doesn’t have a debit or credit card, many don’t. Some still don’t trust the security of transmitting their financial data and perhaps that’s not as irrational as you might believe. According to the Identity Theft Resource Center, data breaches were up more than 23% over the previous record-setting year.
Why not offer payment plan options that go through the security of the Automated Clearing House? ACH payments are strictly regulated and monitored, and data is only transmitted once through highly secured channels. ACH payments through APPs and APIs available through Envestnet | Yodlee offer higher levels of security while giving the customer greater payment options they can trust. Their process of account verification also offers increased security to the consumer as well as to your business.
2. Time and Cost-Efficient Billing with a Payment Plan
If consumers come back to make payments via a credit card, there will be relatively high service fees your business will pay, and the processing site will often charge consumers for that service as well. Once a monthly direct debit from a consumer’s bank is authorized, all payments to your company are handled seamlessly by the ACH service you contract with and there is nothing your employees need to do beyond that. It is the most cost-efficient billing method you will find.
3. Stay Aligned with Today’s Financing Options
If you question how effective offering your customers a payment plan can be, take a look around the Web to see just how many of your competitors are doing this very thing today as you are reading this. If your competitors offer monthly payment options and you don’t, you may lose those customers who would rather keep money in their pocket today by agreeing to recurring monthly ACH payments as debits from their checking accounts.
4. Giving Customers More Cash on Hand with a Payment Plan
While not everyone is living hand-to-mouth, the global pandemic did put a bite into the finances of the average consumer. We are still not totally out of the woods and many consumers are still feeling the crunch, even after returning to work. By giving your customers an option to have payments automatically debited from their bank accounts, they have more cash on hand today. This is often used to pay debts that piled up over the past two-plus years.
When all is said and done, by giving them one more payment option you are giving them a greater choice that will often close the deal for you. Why should you offer payment plans? If it benefits a customer, it will benefit you. That’s all there is to it.