Page 3 - MIADA-Q2 2023

FINANCIAL HIGHLIGHT

Why customers pay late,

how to get on-time payments

Late payments from customers impact “The younger generation scores 30 percent using digital banks for primary
many facets of a business, restricting cash themselves lower on average accounts. Business Insider reported more
flow, taking up resources and costing other than 50 percent of these age groups using
opportunities. when it comes to paying their digital wallets and more than 75 percent
bills on time,” Gaskill said. using digital payment apps.
In the auto industry, especially for buy-
here, pay-here dealerships, finding options According to the research, a lack of funds Looking at 140,000 transactions totaling
to get more consumers to pay on time is drives consumers to pay late, but it isn’t $42 million at 40 BHPH dealerships, 79
critical. the primary reason for missing payments. percent of payment transactions were
For those 45 to 60, procrastination caused completed with debit cards, 13 percent
During a recent webinar held by the 33 percent to pay late. In those 30 to with cash, 7 percent with digital wallets and
National Independent Automobile Dealers 44, approximately 30 percent reported 4.3 percent with cash apps.
Association, Bruce Gaskill, Senior Director overlooking physical mail and emails.
of Integration Partnerships at PayNearMe Gaskill suggests accepting as many forms
presented research on why customers pay Of respondents under 30, 11 percent were of payment as possible.
late and some solutions to increasing on- late on every payment and 30 percent late
time payments. every other month. “You should be accepting digital wallet
currency. They do have money they can
“A late payment, even a couple days late, The younger generations were also not pay you, but that money is trapped in these
can, for a smaller business, impact payroll likely to use traditional banking methods, types you are unable to accept,” Gaskill
and daily operating expenses,” Gaskill said. according to the survey, with said.

“Anything you can do to keep your best The research shows younger people are
customers on time has many pluses.” more apt to set up autopay. Another
suggested solution to getting an
PayNearMe polled 2,600 consumers, increase in on-time payments
asking 30 questions about paying is using smart links in texts.
bills. The survey hit across The links take the customer
different demographics to provide to a portal where a card
a representation of the U.S. is saved and allows them to
population. Of the respondents, make a payment in less than a
51 percent said they were late on at minute.
least one recurring payment with
a 12-month period. Thirty-one “There’s a 90 percent reduction in
percent said they were late on up inbound calls and more on-time
to three payments in that span and payments,” Gaskill said.
18 percent were late on four to 10 bills.
“You want to remove as much friction
“It’s not specific to non-prime lenders,” as possible. A````` gentle reminder
Gaskill said. Among individuals 60 and frictionless customer experience
and older, 92 percent had three or are the two things that eliminate
fewer late payments. In contrast, procrastination.” n
those 44 and younger were four
times more likely to pay late.

MSIADA MISSISSIPPI DEALER Q2 2023 | 3