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.

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.

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. 

To have a positive experience when settling the debt, consumers need a 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.

Access Comprehensive Statistics

Evaluate overall performance and debtor activities at a glance with built-in reports, including payment option ratio, created installments per day, unique debtor logins over time, and more. For even more detailed insight, we can add custom reports with the info of your choosing. 

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.

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 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.

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Volume of Collected Debts

Total Recovered Debt

Payments

%

Faster Debt Settlement