What can local authorities do to ensure the future security of rent payments? Lewis Alcraft at PayPoint explains
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Local governments have continued to see their budgets cut and are still expected to deliver the same service. What impact do you see this having on the housing sector?
Our view is that it is a sector that is undoubtedly under pressure. That is likely to continue to be the case for several years to come. The pressure will continue to serve up tough choices for local authorities around how to most efficiently provide services.
This is where PayPoint has become increasingly relevant, working more closely with external partners so its services can be provided more efficiently.
Broadly speaking, it drives the need to think more creatively and to seek out partners to provide the breadth of services that are required at the right commercial price point.
What are the challenges for local authorities around Universal Credit and rent payments?
With Universal Credit, we are already seeing that it is challenging housing providers in terms of delivering payments on time. One of the ways in which local authorities can increase the likelihood and speed of being paid is through providing access to a range of convenient, intuitive payment options.
A multi-channel payment service that enables customers to pay through different routes such as by cash or online provides choice. Importantly, online services can aggregate a singular view of bill payers’ accounts and enable customers to see their full payment history.
Our experience is that you get enhanced payment behaviour when you provide convenient, easy-to-use services to end users.
With consumer habits changing, is there also a growing demand for greater flexibility in how tenants make payments? What sort of challenges does that raise for housing providers?
People’s expectations around convenience in accessing services and making payments are becoming increasingly demanding. We’re in a ‘now’ society and we’re much less tolerant than we were five, 10, 15 years ago: when barriers are put in our way, we complain and we take our business elsewhere.
Flexibility is key. For example, we see that customers really value convenience and long opening hours.
Traditional business hours do not always work for people and we see that reflected with a high proportion of our transactions happening after 5pm and at weekends.
Social landlords are not immune to these evolving pressures and those who embrace them are likely to remain resilient. There is a considerable challenge for housing providers in responding to an increasingly demanding customer who expects the most convenient payment options to be available to them.
Cash is one of many payment channels in the housing sector. Is it important that local authorities continue to enable cash payments when there are now more prominent payment methods?
The growth of digital payments is undeniable, having now overtaken cash payments in the UK.
Despite this, cash continues to be a central payment method for people making housing payments.
In fact, there are more than two million unbanked people living in the UK, which shows that providing the option to pay in cash is a vital service for a significant proportion of the population.
In time, our behaviours will shift with more people accessing different technologies and choosing to operate in a multi-channel dimension. However, it is undeniable that cash will continue to remain a core component for the foreseeable future.
Some people continue to question the security of certain payment methods - what does the sector need to do to counter this view?
Payment methods are constantly evolving and so the security surrounding them needs to move at an equal pace.
When you’re providing payment services, there are very clear regulations to comply with and industry standards to meet. For example, the new Payment Services Directive (PSD2) introduces the concept of enhanced security via the use of customer authentication, which impacts the payment registration process to ensure both the integrity and safety of customers’ details.
Looking ahead, we believe that consumers will become increasingly wary of disclosing payment information to a range of companies and are likely to favour a ‘register once’ concept with organisations they trust.
For the housing sector, that means choosing a payment provider that has a track record in delivering highly secure solutions across today’s evolving payment channels. The key feature of any payment must always be the protection of the consumer and managing the risks they face.
Payment methods are increasingly moving online - what do housing organisations need to do to make sure that tenants are not left behind?
Although there is an increasing move to online payments, cash continues to remain highly relevant and a key payment method for people who are vulnerable or with less access to mainstream financial products. For this reason, housing providers cannot afford to ignore the need for cash services.
We are starting to see online payments become an increasing part of our everyday lives as we shop and bank online. As consumers, our expectations around how we interact with organisations have increased.
As a tenant making regular payments, I would expect to be able to store the details of my payment card securely with the organisation receiving the payment. This way, housing providers could expect to receive payments in a timely manner, having removed a barrier in the process.
Payment processing is both resource and cost heavy. What can providers do to help make handling payments more efficient?
Housing organisations face considerable costs in the need to process payments through manual back office operations, which can be time-consuming.
Technology can help make a positive difference. For example, PayPoint provides a fast, secure cash-out service to local authorities, enabling them to make payments back to tenants in the form of vouchers via PayPoint locations.
It cuts out a significant layer of cost for local authorities; removing the need for traditional cash offices. We have seen a significant uptake of the service as authorities recognise the efficiency gains it provides.
Lewis Alcraft is commercial director at PayPoint and has worked on the creation of innovative cost-effective payment solutions for local authorities and housing associations for more than 10 years.