Automating Debt Collection with Paydit

Our client, one of the largest collection agencies in the U.S., managed to significantly increase the volume of collected debts, using our compliance-first debt negotiation and settlement platform.

Problem Statement

55% of U.S. consumers complain about frequent calls from collectors. Calls are generally perceived negatively and only irritate consumers. The more frequent they are, the more likely debt will not be recovered. Consequently, today’s collections industry suffers significant profit losses, in addition to such issues as bad publicity and compliance violations. Over a decade, Armada Labs has been fine-tuning expertise in creating and delivering SaaS loan origination and loan management solutions. So, we used this expertise to create a new product to cater to the needs of our clients and fill in the market gap.

The following goals were set:

Maximize debt recovery and reduce bad debt;
Reduce the time spent on collections;
Cut the cost of collection procedures;
Always remain compliant with regulations;
Improve consumers’ experience.

Our approach

After researching the market conditions and feedback of our customers, we decided to create a fully automated SaaS platform that will mimic the behavior of a human collector. In this way, we could help the client launch a new digital strategy by offering a cost-effective, fully compliant and effective alternative to the traditional debt settlement and resolution process.

How Paydit Works

Paydit is a universal solution for debt collectors and consumers, designed to remove friction at every key point of the collection process. It allows collectors to adjust debt collection to their internal rules and local regulations and customize the consumer journey to make it fully convenient, with custom payment schedules and options, billing frequency, reporting, and more. When invited, a consumer can access the platform anytime, anywhere, and choose from the available online payment options. If none of the options is affordable, they may negotiate and even renegotiate lower payment until the agreement is reached.

Source: Paydit

Next, Paydit handles payments and compliance issues without requiring any supervision from the collector. Regular payments are collected automatically when the time is due, while the system ensures seamless compliance with local laws and federal regulations and payment monitoring and analytics.

Project key facts:

The U.S. market, global debt management and recovery
Web Application

Team

2 Developers

2 QA Engineers

1 Business Analysts

1 Project Manager

Debt Collection goes Digital with Paydit

As we see, the demand for digital debt collection tools has already been forming among consumers. In addition to being generally positive about resolving their debts online, they actively participate in that process.

Source: Paydit

To have a positive experience when settling the debt, consumers need convenient, stress-free communication, flexibility when choosing payment options, and ongoing control over debt negotiation — Paydit provides all these at once. Traditional calls from collectors can make consumers nervous and feel under pressure to make an immediate decision to pay. A stressful environment doesn’t guarantee the receipt of debt. Additionally, collectors may provide a limited number of payment options whose security may be doubted by some. Paydit is designed to remove these issues with online debt negotiation and improved user experience. Collectors, on the other hand, now have to read lengthy legal disclosures when calling consumers. With Paydit, however, they are free of that routine since all compliance requirements are built into the solution in the first place so that procedures could be handled in full compliance. More, Paydit delivers the service available 24/7, which allows collectors to focus on more challenging, hence attention-grabbing, interactions with consumers instead of repetitive compliance and collection issues. Finally, collectors can gauge the performance of each debtor at a glance with a set of real-time reports provided within the platform: daily installments, unique logins, chosen payment options, and more. To get additional info, they can request to add custom reports.

Technology stack:

Technology used: jQuery, HTML, CSS, .Net Framework 4.6, ASP.NET MVC, ASP.NET WebForms, SOAP/REST Web Services

Database server: MS SQL Server

AWS server KMS, SES, S3

Hidden Opportunities Discovered

Paydit changes the way debts can be collected and presents several strategic benefits. First, it enforces the digital channel as the means of contact with consumers. Next, it makes the settlement and resolution process more compliant, transparent and less stressful for both parties. Finally, the process itself is more cost-effective; you pay only a small percentage from successfully collected debts without any additional overheads.

Source: Paydit

Key Results

In the first three months of deploying Paydit, more than 2,300 payments were made for a total of ~$800,000 of the debt collected through our debt negotiation platform.
Round-the-clock service availability and a non-threatening approach allowed collectors to improve the experience of their customers.
Paydit allowed 27% of debts to be settled faster than with the traditional collection approach.

Overall, in less than two years, the client managed to scale up the monthly volume of collected debts by ~150%, which resulted in ~$11 million of the total recovered debt.

Collector benefits

Fast debt settlement
Built-in compliance
Automated service
Decreased labor cost
Real-time reporting

Consumer benefits

Choice of payment options
Stress-free communication
Convenient debt negotiation
Trusted payment gateways
24/7 service availability

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