Lenders, Debt Collection Agencies (DCAs), and other businesses are more often turning to digital-first innovations in the ongoing search for more efficient, secure, and user-friendly payment solutions. Apple Pay is one of the game-changing solutions we’re seeing businesses implement across this space. In this article, we explore the increasing importance of incorporating Apple Pay in collections strategies and the significant strides it has been making in enhancing the collections process.
Strong Customer Authentication (SCA) and Apple Pay
Strong Customer Authentication (SCA) is a European regulatory requirement aimed at reducing fraud and making online and contactless offline payments more secure. The requirements introduced by the second Payment Services Directive (PSD2) in 2022 mean that purchasers will need to verify their identity by completing an additional security step at checkout.
SCA then ensures that all card payments are made by valid cards and users before the payments are authorised and processed. This means fewer disputes, decreased fraud, and higher success rates for the payments in question. Its introduction has been a pioneer for online payments. However, as with all new technology, there are often unintended side effects. For the new restrictions of SCA, this came in the form of an increase in declined transactions due to SCA failures.
But this is where Apple Pay comes in. Apple Pay has built-in layers of authentication, including passwords and biometric identification, such as Face ID and Touch ID. These layers of security allow transactions to meet all SCA requirements alongside offering a frictionless checkout experience for all users.
Reducing SCA Declines
A recent study undertaken with one of Acquired.com’s customers showed that they experienced an average transaction decline rate of 4% for their ad hoc collection payments due to SCA failures. After discussing this finding with our customer, we responded with the speedy implementation of Apple Pay into their existing collections strategy, with the aim of reducing SCA declined transactions by utilising Apple Pay’s built-in security features.
Enhancing Success Rates
The benefits of implementing Apple Pay into your payment strategy extend beyond reducing declines. Aside from the extra layers of security inherently offered by Apple Pay, the streamlined and user-friendly payment experience is also a contributing factor to increased success rates. Conversion rates can be heavily affected by a poor user experience, particularly when it comes to mobile sites and payments.
It comes as no surprise then that Apple Pay is renowned for its fast and easy payment process – once the necessary information has been completed in a user’s Wallet app, they need only to use Touch ID or Face ID to input their payment details and make the transaction.
During our recent study with a long-term customer, Acquired.com observed an astounding 19% uplift in success rates on customer payments when Apple Pay was offered as a payment method.
In the UK, it’s estimated that six out of 10 people used Apple Pay in person between April 2022 and March 2023, with an additional three out of 10 saying they had also used Apple Pay for an online transaction in this same time period. From this data, it’s clear to see that offering Apple Pay as a payment method can significantly enhance transaction success rates.
Benefits of User Sign-ups with Apple Pay
Encouraging your customers to use Apple Pay as their preferred payment method for in-person and online transactions can bring a range of advantages to both the customer and you as a merchant.
Increased Convenience: Using Apple Pay, users can complete a payment easily and quickly. In some cases, only a single tap is needed – making this process short and convenient is vital for keeping customers satisfied.
Improved Security: Fraudulent transactions are much less likely with Apple Pay, as all payment cards need to go through built-in security processes before being added to the wallet and used for transactions.
Making Ad Hoc Collections Seamless
Ad hoc collections can be a challenge, both for businesses and customers – these types of payments are often limited by high fees, clunky user experiences, and long processing times. The key to improving this process lies in making it as streamlined as possible. Apple Pay, with built-in security features and a seamless payment journey, can be a great addition to any payment strategy and combats common collections issues. In addition to this, customers are more likely to have a positive affinity for a brand’s collections process that offers such a hassle-free experience.
Adopting Apple Pay
The implementation of Apple Pay into your collections strategy offers a win-win situation for your business and end-users. Data continues to demonstrate that Apple Pay can be a key tool in reducing SCA declines, enhancing the success rates of payments, and ultimately elevating business and customer experiences alike.
Interested in empowering your customers by adopting Apple Pay into your payment strategy? The Acquired.com team can provide a step-by-step guide to integrate with our API and add Apple Pay as a payment method. Get in touch to speak to the team.