SEP 19, 2019
By Drewe Apps
Managing Failed Payments
for Telco, IoT, and Utility Providers
In this day and age of digital finance, it is important for businesses, especially those dealing with recurring payments, to expect credit card payment failures, to understand the impact failures can have, and to efficiently manage them.
Payment failures are not only frustrating and inconvenient for both the customer and the business, but they can cripple a business's cash flow, and tarnish the relationship between customer and business, resulting in increased churn and a drop in MRR (Monthly Recurring Revenue).
Therefore, it is crucial for businesses to have an efficient management process or, ideally, an automated system to manage failed payments.
Why Payments Fail
So, why does a credit card payment fail in the first place? Well there are a number of reasons, with the most common being:
- Insufficient funds
- Expired card details
- Bank refusing the charge due to fraud prevention
The good news is that none of the above reasons mean the end of the line for your customer!
How To Manage Failed Payments
The most efficient way to manage failed credit card payments is with a system that will automatically retry the payment after some time.
Upon a payment failing, it is always a good idea to promptly notify your customer that there was an issue and explain what they can expect as far as the next step to have their payment processed.
This not only helps to manage the customer's expectations, but it saves time for you and your staff with regard to the recovery of outstanding debts.
How Can EAP Help
EAP, ECConnect's industry-leading service provisioning, client management, and automated billing system has been designed specifically for MVNOs, IoT providers, and Utilities providers and takes the complexity out of managing failed credit card payments.
EAP automates the payment retry and communication process of failed due-date related credit card payments (the automated payment relating to an outstanding invoice), to nurture clients through the process and quickly attempt to recover outstanding revenue before it is potentially lost.
EAP can be configured to automatically retry a failed due-date credit card payment up to three times based on specific failure reasons, i.e. You may wish to retry if the payment failed due to insufficient funds, but not if the bank has blocked the payment attempt.
Each retry can be configured to occur a specific number of days after the failure, and a unique message can be sent to the customer for each failure occurrence either via email and/or SMS.
EAP's Failed Payment Retry Configuration Screen
Preventing Failed Payments
Prevention is better than cure! The following can help to reduce payment failures and speed up collection of failed due-date credit card payments:
- An automatic notification with regard to expiring and expired credit card details, asking clients to update their payment details
- Allow customers to easily manage their payment details via your website or applications
- Provide customers a way to have their payment processed, either via your website, applications or SMS
EAP does all of this, plus more.
Whilst failed payments can certainly be frustrating, they can be limited and easily overcome by implementing the suggestions above.
Chief Commercial Officer