Giving consumers a choice of how to make their payments through multiple avenues or mobile payment apps can lead to an increase in collections.
Lenders should provide consumers multiple methods to make payments so they can choose which method they are most comfortable with, making it easier for the consumer to stay consistent on payments, Jill Bohlken, senior director of sales at electronic billing platform PayNearMe, said at last week’s Non-prime Automotive Financing Conference in Plano, Texas.
“We’re trying to reduce [consumer] frustration,” Bohlken said. “You can do customer-specific links or utilize QR codes, which allows them the ability to use a couple of clicks and be comfortable in the payment method that they choose.”
Lenders can enhance debt collection by allowing consumers to make payments through mobile payment apps such as Cash App, PayPal and Venmo, she said.
“Give [consumers] choice, so allow them to make payments where they’re making some of their other payments, or where they’re storing funds,” Bohlken said, noting that more consumers are also storing funds within these apps.
As of 2020, 79% of Americans use mobile payment apps, with 40% of consumers using the apps to pay bills and 68% maintaining an active balance in the app, according to NerdWallet.
With more consumers using payment apps “it really begs the question why more lenders are not utilizing mobile wallets to allow customers to make their payments and be able to clear their debt,” she said.
The Big Wheels Auto Finance Data 2023 report, the only tabulation of the top 200 auto lenders by outstandings, is available now.