Paying off debt with a Visa debit card has major advantages, offering more convenience for consumers and cost savings for the lender. In a recent survey1, 31 percent of consumers used cards to pay at least one bill in the past month. Even though consumers, especially millennials, are ready to embrace digital payment methods in order to pay a wide range of monthly debt expenses like car loans, mortgages and student loans, issuers and lenders are only just beginning to accept debit cards.
Previously, Visa debit acceptance for debt repayment was usually only offered as a last resort, in collections circumstances. Now, many issuers understand that consumers need more options for payment, which can also decrease costs for services like agent-assisted phone payments. Overall, operational efficiency also goes up, since processing checks requires a lot of staff time and resources, and often yields errors. Today’s consumers are finding digital payments are much easier to track and account for instantly, helping both the consumer and the lender. 77 percent of those responders that make loan payments with their debit cards cite convenience as their top reason1. While debit used to be predominant among young adults, it has also become the most frequently used payment method across nearly all age segments.
Debit card payments also offer zero liability and federal consumer protections, making them a very secure payment method, becoming increasingly secure with advances in tokenization technology and integration of Visa security features through smarter APIs.
Visa is making debit card payments a viable and competitive alternative to checks and ACH. Visa rules now allow debit and prepaid cards to be used to repay almost all consumer loans, including auto loans, bank loans, and private label loans. Visa is also supporting loan repayment programs with customizable tools and resources that help expand online card acceptance successfully.
ACI Worldwide, the Universal Payments (UP) company, provides real-time, any-to-any electronic payments solutions to financial institutions, merchants and all other types of lenders. ACI makes it easy for customers to make loan payments. This is crucial because, the billing and payment experience is the most influential driver of customer satisfaction in lending2. 90 percent of highly satisfied customers will purchase loans from their lender in the future2 Higher customer satisfaction leads to higher revenues. ACI has seen its UP Bill Payment Solution increase customer satisfaction by 25 percent with electronic payment options including debit card2.
Visa is providing lenders the opportunity to greatly improve customer service with an easy, safe, and fast payment solution. Paying debt with a Visa card also offers multiple benefits including increased security, immediate timely payments, easy tracking ability, and paperless accounting.