COVID-19: Alleviating payment burden on customers while maintaining cash flowMonday, 18th May 2020
Guest blog by Alan Griffiths, Vice President Consulting Expert for Energy Retail at CGI UK
The country’s lock down is creating loss of business, income and jobs for many, translating into the inability – or fear of – keeping up with payments. Utilities, local authorities and other service industries are currently facing unprecedented challenges to do the best for their customers and citizens, while balancing the need to keep their businesses running and ensuring their employees are looked after.
It is therefore encouraging that a very recent survey by PwC found that 67% of respondents trusted their energy supplier will provide financial support during the COVID-19 outbreak, if needed.
Direct Debit has long been the dominant method of payment for many customers of utility and other service providers, domestic and business; however, it is widely reported that significant numbers of customers are cancelling their current agreements. The reasons are obvious – many have seen their businesses shut down overnight and are experiencing precarious cash flows. Furthermore, for those utility customers on a fixed direct debit reflecting an average monthly spend, their usage may now be close to zero.
At the same time service providers are faced with their own challenges of increasing call volumes from worried customers, keeping their staff safe (with many working from home for the first time) and looking after those who are unwell or at risk. In addition, some organisations are unable to take card payments, while their agents are working from home.
The UK government has made it clear that the emergency financial support measures announced for business are not aimed at the likes of utility companies, and will be targeted at their customers instead.
So how can service providers maintain their cash flow while helping their customers?
What if there was a new payment method which could be rapidly deployed, allowing retailers to send a payment request to customers electronically and enabling them to feel more in control of their outgoings? What if there was a new payment method which could allow discretionary flexible payment terms and enable customers to pay securely without needing a card or sharing account details?
Bringing together our strengths in digital transformation, financial services and utilities, CGI has developed such a service with Fintech company, Ordo which makes innovative use of the recently introduced Open Banking initiative. We see this both as a long-term lower cost alternative to traditional card payments with many benefits, as well as a rapid solution to many of today’s unforeseen challenges, allowing retail businesses not only to react to the immediate emergency but to start reinventing ways of working.
Ordo can be deployed very quickly, enabling service providers to offer their customers the flexibility and control they need; options to delay payments, make part payments (with no additional transaction costs for multiple instalments) and pay securely with no risk of mis-keying of bank details or payment references. No payment cards are used (avoiding PCI compliance issues), money transfers are made immediately, helping cash flow and customers retain full control of payments made. Moreover, transaction costs are a minimal flat fee compared with up to 4% of the transaction amount for conventional card payments. Using robotic process automation (RPA), we are also able to connect to back-end systems to process higher volumes without the need for software change.
Alleviating payment burden on customers and citizens in difficulty while maintaining cash flow is now possible with Ordo and CGI.