Our view at Stack - GoCardless is a payment services provider - highlights include low processing rates, no monthly fee for the basic account, month-to-month billing without early termination fees, and extensive support for international payments. It’s optimized for direct bank payments, offering security and flexibility
Over the past decade, the insurance industry in the UK has undergone a significant transformation. This shift is driven by the realisation that superior customer experiences not only foster loyalty but also attract new clients, ultimately impacting the bottom line positively.
According to a survey conducted by the UK Customer Satisfaction Index (UKCSI), insurance companies that prioritise customer experience outperform their competitors in customer satisfaction and retention rates.
With 80% of insurance CEOs reporting that customer satisfaction metrics are embedded in their long-term strategy, it’s clear that the industry is increasingly getting switched on to the power of prioritising the customer. So in a competitive industry, prioritising the customer journey, how can you stand out?
Making payments feel good
Whether your customers pay monthly or yearly, the way they pay for your services is an important touch point across their lifecycle. It can be the difference between winning or losing a customer. In fact, research from GoCardless and YouGov found that 67% of customers would abandon their online purchase if their preferred payment method was not available.
Any efforts made to acquire a new customer can all fall down and customers may easily abandon the process at any stage.
What are your customers looking for when they get to checkout?
In the survey, we discovered that bank payments (such as Direct Debit, where money moves from one account to another) are the most trusted form of payment for consumers with 9 in 10 confirming that they trust it the most compared with Credit, Debit Card, Digital Wallet and Crypto.
The survey also looked at what factors customers consider when choosing a payment method. The top three reasons they choose one method of payment over another are:
How can you better meet customer preferences when it comes to payments? Are your current payment options taking into account these factors?
Security
The latest figures show that online fraud has no intention of waning, with unauthorised fraud levels remaining largely unchanged over the last 5 years (UK Finance).
Fraudsters are primarily targeting cards as the weakest link. Over the last year, five times more money has been lost to unauthorised card fraud than the next payment method.
Until now, businesses have had to make a choice when it comes to fraud. Do you add additional layers to checkout, putting the customer journey and conversion at risk? Or do you do nothing, maximise conversion and deal with fraud as it happens?
Open banking provides a way for you to both prioritise the customer experience whilst stopping fraud in its tracks. Open banking allows you to securely access your customers’ bank account data so that you can quickly verify who they are upfront.
Whilst setting up an instant bank payment with GoCardless, for example, customers are quickly redirected to their online banking to authorise that they are the owner of the account they’re trying to pay with. To authorise a payment through their online account, customers are often required to use Face ID or fingerprint verification. This type of authentication is very hard to copy or replicate, much harder than just using someone’s card details online.
What’s more, this process means that customers’ payment details are automatically inputted meaning they have very little to do when setting up their payments. It means that you can provide a seamless customer experience whilst protecting you and your customers from fraudulent activity.
Ease
We already established that customers will abandon their checkout process if they don’t find their preferred payment option available. However, there is another factor that can be even more of a barrier at checkout – complexity.
In our survey, we found that over two-thirds of respondents said they would stop and leave their purchase if the checkout process felt too complicated. 45% of respondents felt frustrated when manually entering payment details online.
Clearly, taking any complexity out of the payment journey is crucial. With Direct Debit, customers can take the set it and forget approach, setting up a payment schedule for the lifetime of their policy in one go.
Payments are then automatically collected directly from their account across the lifetime of the policy. Cards on the other hand can create much more complexity for you and the customer.
Card payments can fail up to 8% of the time compared with only 2.7% of the time with Direct Debit. When a payment fails, you have to chase the payment creating more complexity for the customer. What’s more, 11-15% of failed payments can result in customer churn. This means customers can lose access to your services when they are otherwise happy.
Opting for a hassle-free, reliable payment option like Direct Debit can create ease for your customers whilst reducing payment inefficiencies for you and your teams.
“ GoCardless has been instrumental in achieving an amazing collection success rate, which is running at almost 99%.”
Clare Caras-Atlas, Finance Director, Taurus Insurance
Money leaving their account right away
In our survey, customers identified that ‘money leaving account right away’ is one of the key reasons for choosing a payment method. Visibility over your finances is important for your customers in the same way it is important for your businesses. Waiting a long time for funds to clear in your account or payments to be made when you’re not expecting it can create uncertainty over your financial position. It can also create a negative experience with your brand.
Direct Debit collects payments directly from your customer’s account on the date agreed in the payment schedule. It’s the most direct way to collect payments. We know that for GoCardless Direct Debit payments, payments are collected within just 4 days of the due date. With cards on the other hand, payments can take up to 7 days to clear your account.
*GoCardless Data
Providing customers with clear notifications around payment collections can also help to improve visibility further. With GoCardless, customers can receive a notification to say that the payment will be collected in 3 days. This gives customers ample time to understand when the payment is due and avoid any bill shock.
“Customers are happier because they get better information when they query a payment. They’re used to Direct Debit and are happy as long as it works well and is transparent.”
Guy Farley, CTO and Co-Founder, ManyPets
Payments that set you apart
Payments can be a powerful tool in creating the ultimate customer experience. Payment collection is one of the main touch points with your brand across the lifetime of a customer’s policy. When creating a positive experience, it’s clear that your customers are looking for ease, security and visibility over their finances.
Direct Debit layered with the right technology, such as open banking provides the ideal solution for insurers.
If GoCardless is of interest and you'd like more information, please do make contact or take a look in more detail here.
Credit: Original article published here.