Every day, debt collectors deal with people who have found themselves in tough and sensitive financial situations.

Virtual technologies, particularly virtual payment technologies provide a perfect environment where these customers can negotiate and pay in a simple, automated and private way, significantly reducing the amount of effort they have to put in to make payments, and reducing the embarrassment factor of having to explain their situation to an agent.

At a recent webinar, Jeffrey Luskin, creditor relations manager of debt recovery agency, National Recovery Solutions, explained the dramatic effect introducing enhanced online payments and agentless negotiation had on his business: the company immediately experienced a surge in payments—including fewer payment drop-offs or customers reluctant to speak with advisors about their personal finances – and enjoyed the added bonus of increased compliance.

In short, the benefits to National Recovery Solutions of implementing a virtual payment system were increased revenue, enhanced customer support service, and keeping up with the growing demands of compliance, not to mention the time freed up for agents to complete alternative tasks.

Indeed, we have found that there is a strong move within the collection payments industry to adopt virtual technology. In a recent survey we conducted, although only 10% of agencies said that they were already using some kind of virtual payment technology, we found that 47% said they planned to adopt some form of virtual technology within the year. 

And there are different types of virtual technologies collections companies can opt for, each with their own benefits and ROI.

First there is the virtual agent, particularly favored by smaller businesses. This agent allows the customer to make an online payment, view a balance and look at payment history. It is a great starting point for any sized business that wants to start on the virtual journey.

Next, we have virtual technology settlement plans where customers can opt for a payment settlement arrangement tailored to their own financial circumstances that ensures that the debt is fully paid over a period of time.

And finally, we have virtual negotiation, a three-step process that enables the customer and the agency to agree to a reduced balance and payment plan that works for both.

First, a customer is notified of a minimum payment amount and maximum payment length. The customer can then accept or make an offer of how much they would like to pay back, and for how long, giving reasons they need more time or do not have sufficient funds. Then the virtual negotiation system will accept or reject the offer. If rejected, the customer will receive a counter offer which he or she can accept or reject. If the counter-offer is rejected, the customer has to start the process over again, offering different amounts or altering their situation.

Once the offer and debt payment plan has been accepted, the deal is done and the customer begins to make payments, of course using the virtual agent.

Dave Yohe is head of corporate marketing for BillingTree