This is a guest post by Crezco.
Overdue payments have been a headache for businesses for far too long. They affect cash flow, operational efficiency, and overall financial stability. However, with the rise of open banking, an alternative solution has emerged that holds the potential to reduce the time and effort spent chasing late payments, finally helping to put these pain points to rest.
The challenge of late payments
Late payments can create a domino effect of financial stress for businesses. The time and resources invested in chasing outstanding payments can be spent on core operations, growth initiatives, and strategic planning. The traditional methods of payment collection often involve manual follow-ups, multiple intermediaries, and a lack of real-time visibility into payment status. This inefficiency not only hampers the cash flow but also strains business relationships, which is far from ideal.
Enter open banking
Open banking is a financial innovation enabled by technology and regulation. It facilitates the secure sharing of financial data between different financial institutions. Open banking allows third-party providers to access financial data with the customer's consent, to offer new and improved financial services. This concept has been harnessed to revolutionize payment collections and eliminate the pain of chasing overdue payments.
Open banking allows for seamless direct transfers between bank accounts, bypassing intermediaries like third-party payment processors. When customers make payments directly from their bank accounts, their funds are deposited directly into their recipient's account, reducing processing time and the risk of errors. This direct transfer method can significantly accelerate the payment collection process. Delays are minimized and the need for follow-up is greatly reduced.
Payment links to enhance customer experience
To make account-to-account payments even more efficient, businesses using Crezco with Zoho Books can automatically add a “Pay now” button to their invoices. This button enhances the customer experience and offers a convenient and secure way to make payments. Customers simply click the “Pay now” button and authorize payments directly from their bank accounts. There is no more hassle of entering credit card information or navigating through multiple payment gateways. Instead, they can benefit from a streamlined, easy payment process. Keeping payment methods simple increases customer satisfaction and encourages prompt and timely payments, which benefits both parties.