According to Banque de France research, late payments increase the risk of default by 25% to 40% for companies waiting to be paid. Also, debt collection payments exceeding 1 month delay, further deteriorate cash flows and multiply risk of default by 4.
What can you do to collect your unpaid invoices?
1. How could you use payment links to settle invoices and recover unpaid bills?
“Pay by Link” is a new payment method that allows you to be paid remotely through a secure low-code solution.
Using softwares equipped with a solution such as Bridge powered by Bankin’, companies can issue invoices containing a payment link or QR code “Pay by Link” directing their clients to an Open Banking bank transfer. “Pay by Link” brings debtors to a payment interface where all information is already pre-filled. Debtors just have to validate your payment, in a few clicks and without manual inputs.
2. Advantages of Pay by Link and Open Banking transfers
According to numerous studies, we have observed that payment flows in the debt collection sector are mainly relying on debit cards. By adding Bridge’s Open Banking banking transfer and Pay by Link, you can offer your customers a wider range of payment methods.
Integrated into your business software, Open Banking bank transfers can easily be embedded into your collection processes to create a seamless and secure payment experience.
For instance, during a collection process, debtors can receive a payment link “Pay by Link” by email or text messages and will have the possibility to pay their outstanding debt by Open Banking bank transfers. From there, debtors will be redirected to a very simple SEPA bank transfer flow in which all the transfer information is already pre-filled in, namely:
– IBAN of the creditor company (receiving IBAN)
– Transaction amount
– Payment references for easy and automatic reconciliation
The payment experience is therefore simplified as debtors can pay their outstanding debts without having to register a new IBAN in their list of trusted beneficiary accounts; they do not have to leave creditors’ systems nor payment flows to connect to their bank’s interface. They just have to connect to their bank apps through app-to-app with their usual biometrics (face ID, fingerprints) and/or passcodes to validate the transfer in a few clicks.
As for creditors, their collection experience is also simplified since payment information is pre-filled and thus, thanks to the standardisation of information (correct references, correct amounts), the reconciliation of payments and journaling are facilitated. In other words, for a collection department or agency processing many outstanding payments, it is easy to know which customers have paid and which have not.
Open Banking bank transfers and “Pay By Link” also offer many advantages:
– High payment limits
– Automatic invoice/payment reconciliation
– No expiry dates unlike traditional payment methods such as cards
– Simple and smooth payment experience
– Better cash flow management through instant payment
Open Banking payment links and transfers respond therefore to the difficulties encountered when trying to collect unpaid bills. They facilitate payment collections of outstanding invoices and unpaid bills.
3. Pay by Link advantages
As we have seen, “Pay by Link” is a payment method suitable for online services that allows payments to be accepted with little or no development. Payments are received in less than a minute.
This new payment solution can bring many benefits to your business:
– Simple, secure experience that promotes conversion
– Automatic tracking and reconciliation
– Plug & play payment solution
– Irrevocable payments, once initiated, with limited risk of frauds
– High payment limits
Find out more about Pay by Link: Read more