5 Ways to Serve Your Underbanked Business Customers
Banking on the unbanked isn’t just a challenge for brick-and-mortar banks. The same goes for traditional and online business lenders alike. No matter how much you want to serve your customers, there are vast financial constraints preventing many potential customers from pursuing a credit card or checking account in order to transact with you. That said, there are still ways you can help your underbanked business customers, even if they aren’t able to open an account with you. Here are five of them.
Offer Virtual Accounts
When it comes to underbanked customers, a virtual account might be your best route. Virtual accounts are “virtual” in name only. In practice, they’re a way for banks and other lenders to serve customers who may not have a brick-and-mortar bank account. However, virtual account providers generally offer lower limits than traditional bank accounts. Still, virtual account holders are able to make some basic financial transactions, like paying bills and setting up automatic payments. One of the main advantages of offering a virtual account is that you can offer the account even to customers who have bad or incomplete credit. Most online virtual account providers will even allow you to see a credit score before offering an account. You can then choose to approve an application anyway.
Streamline Application Processes
One of the best ways to serve your underbanked business customers is to streamline the application process. You’ve likely heard this advice before, but it bears repeating. How? Create a streamlined process that allows customers to apply online, by phone, or in-branch. If you can make the application process easier, more convenient, and more transparent, it’s likely that you’ll see increased application volumes. Moreover, streamlining application processes can also help you identify customers with bad credit or incomplete credit history. You can then effectively turn away those customers, which may prevent them from applying for other products like credit cards and loans.
Work with Third-Party Service Providers
If you want to serve your underbanked business customers, work with third-party service providers that help bridge the gap between traditional and non-traditional lenders. For example, a third-party service provider can help you accept payments and streamline transactions between your business and customers. A third-party payment provider, for instance, can help you process online payments, which could help you see a wider range of customers. It’s also worth considering partnering with crowdfunding or crowd equity platforms that let you accept equity-based payments from your customers. With equity-based payments, you can offer your customers shares in your business.
Use An Underbanked Customer as a Test User
One of the best ways to serve your underbanked business customers is to use an underbanked customer as a test user. You can then offer this customer a free, open account. You can then offer advice on how to use the account, what to watch out for, and how to resolve any issues. This approach can help you identify underlying issues with your product and resolve them before opening a more permanent account. It can also help you identify any potential security risks.
Provide Easy On-Demand Payments
Easy on-demand payments are a great way to serve your underbanked business customers. Easy on-demand payments are simply free, short-term funding options that can help your customers bridge cash flow gaps. You can offer these payment options through an online inclusive cash bill pay option or in-person bill payment centers. Alternatively, you can also offer these payment options through your mobile app. Your payment options can include a variety of payment options, including cash (working with your state’s prepaid authority), debit cards, credit cards, and ACH transfers.
Bottom line
There’s no denying that the rise of digital wallets, the continued rise of fintech, and the growth of mobile wallets have all contributed to the rise of underbanked customers. However, the most important reason for the rise of underbanked customers is that the financial services industry has failed to meet the needs of the customers who need it the most. Fortunately, there are still ways you can serve your underbanked customers, even if they aren’t able to open an account with you. Offering virtual accounts, streamlining the application process, working with third-party service providers, using an underbanked customer as a test user, and providing easy on-demand payments are among the best ways to do so.