As a merchant, insurer, fitness club manager or energy provider, you are all part of the subscription economy, and securing your revenues over time is a major challenge. When collecting payments via SEPA Direct Debit (SDD), payment failures can occur. These SDD payment failures are called R-Transactions. In Europe, the average R-Transaction rate stands at 2.85%, according to a report published by the European Payment Council.
A unique failed SDD payment can cause a client to churn and, consequently, generate a substantial impact on your activity as you won’t be collecting their recurring payments.
We know that as a business, you’ll encounter many unforeseen challenges that have impacts on your revenues. Here is how we can help alleviate the pain of R-Transactions.
How to reduce your R-Transaction rate
1 . CHOOSE THE BEST DAYS TO EXECUTE YOUR PAYMENTS
Your average R-Transaction rate can vary depending on the type of activity. In order to reduce risks linked to R-Transactions, you should conduct an analysis of the R-Transaction rate over a monthly period. This will help to identify the periods where the risk is higher and you can then adapt the execution date to avoid them.
Based on SlimPay’s client data, the success rate is typically higher if the execution date happens between the 3rd and 6th of each month. This trend is particular to our clients and may differ when you perform an analysis at your company level. We recommend you comb through your own data to identify the most adequate period and avoid the most risky ones.
2 . IDENTIFY THE REJECT CODES OF YOUR R-TRANSACTIONS
For every R-Transaction, you will receive a reject code linked to the failed payment. The most frequent reason for a failed SDD is insufficient funds on the debtor’s account. However, there are a host of other reasons such as a closed bank account, a nonexistent mandate or a revoked mandate.
Analysing the reject codes will help you adapt your actions, when possible, to find a solution and avoid a repeating scenario of payment failures, which will impact your revenues.
For example, if you get an AC04 reject code corresponding to a closed bank account, you can contact your customer to ask for a new IBAN so that you can update their payment data.
SlimPay has detailed all the recommendations for each type of R-Transaction code so that you can recover the failed payment and secure future revenues. Check them out on our Help Center.
3 . RETRY FAILED PAYMENTS
Once these analyses are done, you can more efficiently plan the retry of failed SDD. On top of that, you can retry your failed payments using another payment method like card. For most of the cases, you can maximise your chances to recover failed payments and reduce the bill-to-cash cycle.
How we can further help
At SlimPay, we have developed a set of solutions that can help you reduce the impact of R-Transactions on your activity.
1 . AUTOMATIC RETRY
Our Automatic Retry module allows you to automatically represent some failed payments to secure their revenues and increase the customer lifetime value. This feature is customisable to help you adapt it to your specificities (number of Automatic Retry, Business day of Automatic Retry execution, amounts and range of amounts to be replayed, etc.).
2 . MANUAL RETRY
You can also decide to retry manually individual transactions through our Dashboard.
3 . CARD BY LINK
We have recently developed the Card by Link feature, which allows you to send payment requests by email. This way, when you notice a failed payment via SDD, you can send a request to pay via a Card by Link. Your customer will receive an email, containing a link that redirects them to the Checkout so that they can make a payment by card. Once there, the customer only has to enter their card details to regularise the payment. This method ensures that your payment is effectively done quicker and without risking new R-Transactions.
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