Paying by debit or credit card is big business in the medical finance sector.
Figures from UK Finance show that in 2017 medical services accounted for 17.5 million card transactions worth £2.4 billion. For medical goods these figures stand at 9 million transactions worth £256 million. And for optical goods, 6 million transactions worth £983 million were processed.
They’re clearly a popular and convenient way for consumers to settle their healthcare bills. But there’s a sting in the tail.
New legislation introduced in January 2018 means that businesses can no longer add surcharges to consumer (i.e. excluding commercial) credit and debit card payments. These surcharges, which were as high as 5%, are now banned across Europe.
So instead of passing on processing costs to clients, businesses must now either absorb the cost themselves or increase prices. Neither of which are very appealing.
You could follow the route taken by HMRC and choose to no longer accept credit cards, although this risks alienating some customers.
But don’t be tempted to emulate Just Eat who were instantly criticised for adding a 50p “service charge” to every order when the regulations came into force.
If you’re looking to mitigate the effects of the ban on your business, read on to explore how offering your customers the chance to pay by Direct Debit could be the simple answer.
Beat the Ban with Direct Debit
If you’ve not offered Direct Debit as a payment method before, it’s the ideal option to incentivise clients to pay via a non-card route.
It can save you from either increasing prices, risking the wrath of your clients, or from damaging profits, risking the wrath of your accountant. It will also bring immeasurable benefits.
With 4.2 billion Direct Debits processed in 2017, it’s used by nine out of ten adults in the UK and is renowned for being a reliable, secure and convenient way to pay. The added bonus is that, compared to cards, transaction fees and failure rates are lower.
Harness the power of Direct Debit as part of your healthcare finance set-up and both your business and your customers will really feel the difference.
Great Business Benefits
With a Direct Debit bureau on board to manage payments, you can say goodbye to unpredictable income.
Payments will accurately arrive in your account on the correct day, giving you peace of mind that clients are up-to-date with payments and your cashflow is healthy.
For businesses with low margins, absorbing the additional cost of credit and debit card surcharges simply isn’t an option. For others, it’s a road they’d prefer not to travel down. For all, increasing prices is a risky strategy.
Direct Debit processing fees start from as little as 3p per transaction when using FastPay’s Bureau Service. And these costs are invoiced to you as a whole, rather than deducted from each collection, making reconciliation extra-easy.
Introducing it as a flexible, reliable payment option within your healthcare finance department means you don’t have to choose between the lesser of two evils.
Once your customers have completed a Direct Debit mandate, their admin work is done.
You’re offering them the most hassle-free payment alternative: they don’t need to call or log on to continually input their card details, they don’t need to give your fees a second thought.
They’ll trust you to take the money from their account on the expected day, boosting your reputation as an efficient, friendly and professional business.
More Time, More Money
Collecting via Direct Debit means your healthcare finance team will be freed from the awkward job of chasing payments. Not only will this radically improve your customer service offering, it will boost staff morale and motivation and reduce time-consuming admin hours.
Their jobs will also be made easier as everyday accounting tasks are automated. Digital reconciliation will eliminate the risk of human error and regular reports from your bureau will give them a comprehensive overview of your account status.
Direct Debit transactions can be seamlessly integrated with your accounting software via APIs or applications such as Xero and Sage.
You can connect your online payment gateway to your account team’s system and to your bureau’s software, making the whole process pain-free.
As transactions flow smoothly through the digital chain, you’ll enjoy increased payment efficiency, reduced admin time and a real-time cash overview.
Impressive Customer Benefits
Convenience and Peace of Mind
When it comes to simple payment solutions, Direct Debit’s convenience is hard to beat. Once your customers have signed up with you, all their payments will be taken care of by you and your bureau.
They don’t need to remember when and how much to pay you, they don’t need to worry about late payment fees and they don’t need to panic that your fees will tip them into their overdraft.
All they need to do is ensure sufficient funds are in the account on payment day.
They’ll also be spared any uncomfortable conversations if they’re late making payment and will enjoy a continuous service.
The ultimate fast finance solution, Direct Debit will make your clients’ lives easier and their opinion of your business soar.
Security and Trust
You want your medical finance systems to be as secure as possible and this is another area where Direct Debit outshines the competition.
The Direct Debit Guarantee offers unbeatable levels of security, protecting clients with a comprehensive range of safeguards. You can put their mind at rest that Direct Debit is the most secure form of payment available, making the chances of fraud highly unlikely.
Easy to Incentivise
Direct Debit’s flexibility makes it an ideal candidate to incentivise customers with budget and loyalty-enhancing payment arrangements.
For example, you could offer a 5% reduction in fees or lower interest rates if you use it to collect monthly instalments for a high-value item.
You can also spread the cost of historical debts by switching your client to Direct Debit and devising a flexible repayment plan.
With credit and debit card payments losing a little of their shine for businesses, Direct Debit is the perfect alternative to ensure healthy cashflow, satisfied clients and resilient profits.