The lending landscape has never been more competitive. Increasing digitization has enabled neo-banks and direct lenders to compete with traditional banks and credit unions, who can also compete on a national level. Rates may seem like the obvious differentiator, but the truth is that the repayment experience matters as much, if not more.
As Brian Riley, co-head of payments at Javelin Strategy & Research (formerly Mercator Advisory Group) notes, “The top reason that consumers choose to get a loan from an online lender instead of a bank is that lenders offer a better, more convenient experience than going to a bank.”
The defining elements of a convenient repayment experience
While no two borrowers are the same, expectations generally revolve around the following elements:
- Accessibility in terms of being able to manage and pay loans through a variety of channels and at any time
- Payments optionality that allows for greater choice and flexibility in the exact payment method being used
- Frictionless security that protects all transactions without impeding the experience unnecessarily
How Paymentus is driving performance for leading banks and credit unions
The Paymentus Loan Payments offering fulfills the convenience expected by borrowers through an intuitive lineup of self-serve payment capabilities—which also reduces the cost to serve loans by eliminating staff time spent processing payments.
Loan Payments offers an expanded menu of payment options, including:
- Debit cards and ACH
- Apple Pay, PayPal, Venmo, and Google Pay digital wallets
- In-store retail cash payments accepted at Walmart, CVS, and many others
- Pay-by-Text and 24/7 chatbot
This is coupled with the ability to send proactive notifications and reminders, which have proven particularly effective in driving more on-time payments.
Real-world results
Paymentus has worked with several leading financial institutions to transform their repayment capabilities and meet the expectations of their customers and members.
For one Paymentus client with $2.6B in assets, Loan Payments was the answer to legacy limitations that included a lack of self-service features and an inability to innovate. Shortly after launching Loan Payments, the credit union achieved:
- 99.8% of loan payments were made using self-serve, automated channels
- 121% increase in payments made using digital wallets
- 40% of loan payments were made using AutoPay
Beyond the consistent, on-time cash flow provided by AutoPay, the use of self-serve digital channels has saved countless hours manually addressing payments.
Paymentus has also helped a credit union achieve a staggering 320% increase in total loan payments made across all digital channels, highlighted by a 550% surge in online loan payments.
This was a massive shift forward in terms of operational efficiency, highlighting the preference for self-serve repayment options.
Supporting innovation through marketing
To help our clients maximize the performance of their solution, Paymentus offers complimentary marketing support in the form of our Client Adoption Success Team (CAST). CAST delivers full-scale marketing campaigns at no cost to our clients.
For one credit union, working with CAST helped to outpace peer performance in the form of:
- Bill Pay activity (1.5X stronger performance)
- AutoPay adoption (2.5X stronger performance)
- Bill Pay user growth (2X stronger retention)
These results are typical of all CAST clients, and showcase the power of strategic marketing.
For financial institutions looking to maximize their end-to-end offerings, the Paymentus + Lumin partnership can extend your ability to serve, while driving strong results experienced by your peers.
For more information on how Paymentus can help you meet evolving borrower expectations, please visit Paymentus.com. You can also contact us at any time to schedule a quick call or demo.
