According to a study by GoCardless, legacy payment systems cost UK businesses a hefty 3.5% of their revenue. The fintech firm highlights the inefficiencies of traditional payment methods, which impose unnecessary costs on businesses. As a result, it underscores the potential benefits of Commercial Variable Recurring Payments (VRPs) as a more efficient alternative.
Interestingly, the study reveals that an overwhelming 95% of finance leaders believe VRPs could help reduce these costs. Moreover, they predict that adopting VRPs would also curtail late payments, a significant problem for UK businesses. These insights underscore the increasing dissatisfaction with outdated systems and the urgent need for a shift towards more innovative payment methods.
GoCardless Champions VRPs as a Solution
GoCardless suggests that VRPs could be the solution businesses need. VRPs, which are automated payments that can fluctuate in amount and frequency, offer more flexibility than traditional payment methods. Such adaptability can be particularly beneficial for businesses with variable income and expenses.
Additionally, automating VRPs can reduce late payments, a prevalent issue that negatively impacts cash flow and can even threaten businesses. Through payment automation, businesses can ensure prompt receipt of payments, thereby improving their cash flow and financial stability.
However, transitioning to VRPs comes with its own set of challenges. Businesses need to adjust their systems and processes to accommodate this new payment method. There may also be resistance from customers accustomed to traditional payment methods. Despite these obstacles, the potential benefits of VRPs make them a compelling option for businesses seeking to enhance their payment processes and reduce costs.
The GoCardless study findings underscore the pressing need for businesses to adapt and innovate. Given that legacy systems consume a significant portion of their revenue, adopting more efficient payment methods like VRPs could be a crucial step towards attaining greater financial stability and success.
