We thankfully seem to be coming out of the COVID-19 pandemic and, with restrictions lifting, those that can are taking advantage of newly-found again freedoms and heading overseas for some sun, sand, sea and most definitely a change of scene!
ACE-FX is a long-standing family owned and run foreign exchange business. They’ve been going since 2007 so have weathered their fair share of market storms and have still managed to come out thriving and growing. When COVID hit, they were hit too and, along with the rest of the travel, hospitality and leisure sector, hit hard; when ACE-FX heard about new technology, Open Banking, the Point of Sale solution using QR codes and eCommerce payment solutions Ordo offers and its benefits, they were super interested! Ordo payments were set to help ACE-FX by saving them money, delivering instant bank transfers, and lowering their fraud costs and customer payment failure rate. In the now COVID-recovery, saving costs, reducing fraud and abandonment rate and boosting cash flow with instant bank transfers were music to Ace’s ears!
ACE-FX operate out of three stores in Central London, two in Canary Wharf and one in London Bridge, where they offer selling and buy back of currency in-person; and online via their eCommerce web site which is then available either by click and collect at one of their three stores, or they’ll get it delivered to your door. They guarantee competitive rates, with exchange rates being updated every hour, customers know they’re getting fair and transparent deals, with Ace being able to get closer to the market than other bureau de changes. They have no hidden costs, and 0% commission. And they’re speedy too: if you want Euros or Dollars, they can do that within 30 minutes, and if you order other currencies before 9am, they’ll have that available for your same day as well.
With excellent customer service, low rates and speed being at the heart of Ace’s offering, they needed business processes and tech that would help them carry on delivering these benefits to their customers, whilst everyone got used to the idea of being able to travel again, and continue growing. They needed to shorten the time it took for their customers’ payments to hit their account, reduce the amount of time payments failed on debit cards, and get their fraud costs down.
It was to solve these enterprise account payment requests problems that Ace turned to Open Banking provider Ordo. Using Ordo’s Point of Sale systems using QR codes and eCommerce payment processing via bank to bank transfer, both meaning instant bank transfers, Ordo worked with Ace to make the payment requests stage of holidaymakers getting their foreign currency more efficient, and to set the standard for the travel industry.
The Challenges
Delayed cleared funds instead of Instant bank transfers
Only the most robust and agile companies could survive the last two years we’ve all had. Even during the intermittent periods in which we were allowed to travel, and in that other world that was pre-COVID, once ACE had made the payments requests from their customers, they needed ways to get their customers’ payments into their account quicker, they needed cleared funds sooner.
Most customers would pay using debit cards, and whilst Ace was guaranteeing currency within 30 minutes or same day, they were not receiving their funds following their payment requests until multiple working days later due to the speed at which card transactions clear in the UK. This discrepancy of time means businesses like Ace suffer when accepting card payments, and their liquidity and cash flow is adversely affected.
High card costs
The other disadvantage for businesses in accepting card payments, be it in-person, over the phone or online, is that they’re high cost. They’re usually a percentage of the transaction which, for holiday money, can be significant sums, and there are often hidden charges, subscriptions and hardware costs that may come along with the percentage per transaction in addition. For a business operating in one of the most affected sectors following COVID, lowering cost is an essential, along with being able to pass any costs savings on to customers to attract new business. At the time, Ace also
had plans to open up a new store, London Bridge, and needed to be as slick with their costs as possible to effect these exciting expansion plans.
Fraud and fraud detection costs
Sadly, as sure as the sun will rise, fraudsters will be forever finding new ways to defraud consumers and businesses out of their hard-earned cash. During the pandemic, fraud was on the increase, and conscionable businesses like Ace suffer the consequences of the cost of detecting that fraud and putting in place tried, tested and effective anti-fraud measures. Cards being used online or in-person can be used, up to the contactless limit, could be being utilised by that of a rogue, and puts a burden on Ace to include measures to detect this kind of activity and behaviour, both online and in-person in store. All of this is good for customer service and reassurance and Ace wouldn’t have it any other way, but it does cost, and all costs count on your bottom line.
Failed card transactions
Another challenge posed by the, what used to be, pre-dominance of card payments, was the propensity for those card payments to fail. This would be for a variety of reasons from the customer not having funds in their account, being over the contactless limit and the customer forgetting their now largely unused pin number, their bank/merchant acquirer flagging the card transaction as a fraud risk and preventing payment, a glitch in the card reader network or something wrong at the bank end. Whatever the reason, for Ace, it means not only a failed transaction, but a lost payment request and sale and potentially a lost customer, all through no fault of their own or failure in their service.
Reconciliation admin time
And then come the indirect costs that a business needs to account for, the manual reconciliation and staff needed to do this, to match up accounts, payment requests and income showing on bank statements. Whilst a business is expanding, this is often done out of hours or by headcount that is either extra cost to the business or done by people who would be better deployed in other profitable areas of the business. Nevertheless, whilst customers make a bank to bank transfer not using the more secure and convenient wrapper of Ordo payments and Open Banking, they will incur time and cost in reconciling and chasing payments that have been made for not exactly the right amount or with the wrong reference, and those payments that have gone awry because, following the payment requests, wrong account numbers have been typed in by the customer. All of this indirect cost adds up, and could have been the difference between Ace being able to open their third store or not.
Why Ordo payments?
Ace started using Ordo payments at the beginning of 2022 and have seen the challenges they were facing above melt away like an ice cream sundae in the midday sun.
Instant bank transfers
Ordo payments use Open Banking and the payment requests use the UK’s Faster Payment system to make the bank to bank transfer. All this is orchestrated and manged by Ordo, so the customer experiences ease and convenience, and Ace is credited the payment request in their account the moment their customer pays them. There are no delays, no money deducted, just instant bank transfers from the customer to Ace, boosting their cash flow and liquidity immediately.
Lower costs
Unlike cards, Ordo does not charge a percentage of transaction. With Ordo payments, there is a single flat fee of not more than 20p, meaning the cost of holiday travel to Ace is significantly reduced. They were able to reduce their costs by around 80% which was immediately attributable to their bottom line, helping shore up their business finances for their long-term expansion.
Reduce fraud and fraud detection costs
Ordo payments, both Point of Sale solutions and ecommerce payment processing, mean all payment requests are authorised by customers through their own mobile or online bank. With direct bank to bank transfers requiring authorisation of payment requests in the customers online or mobile bank domain, fraud and fraud detection costs are dramatically reduced, meaning Ace can re-deploy those funds to expanding the business.
Reduce abandoned transactions
And because Ordo payments are authorised directly in the customer’s online or mobile and then made via instant bank to bank transfer, there’s no card pin to remember or card network connectivity and uptime to rely on. Customers are taken to their bank by Ordo, where the customer logs into their online or bank app as they usually do, often by biometric such as finger or face, and can immediately see their account, balance status and the payment request that Ordo has set up for them. It’s convenient, easy and secure for the customer, leaving no hurdles at which they’re tempted to abandon that basket.
Automatic reconciliation and reduced admin time
With Ordo payments, as the essential information, such as Ace’s account details and their transaction reference, are inputted by Ace, the party making the payment request and wanting to receive the instant bank transfers, there’s little chance it’s wrong and payments arrive in Ace’s bank account correctly and automatically referenced. This has the advantage of reducing that admin time spent sorting and reconciling payments, and reducing the sunk indirect cost.
Being used in-person and online
Ace-FX having been using Ordo payments for both point of sale solutions using Ordo’s QR code money transfer solution, and for eCommerce payment processing. Whether it’s in-person or online, Ordo payments have helped Ace reduce costs, fraud and abandonment, and get their money in cleared funds sooner with instant bank transfers to the correct account with the correct reference every time.
And the result?
The results have been dramatic, and Ace are on a mission to get more of their customers using Ordo payments in order to utilise the security and convenience benefits of Ordo, as well as helping Ace keep their costs down so they can give their best rates to their customers.
As a result, Ace have seen:
- 80% reduction in costs where customers use Ordo payments,
- an immediate cash flow boost giving them the confidence to open new stores in Central London,
- significant drop in basket abandonment rate,
- invaluable drop in fraud detection costs, and
- more evenings at home for dinner and homework with the kids rather than evenings spent reconciling income.
The benefits Ordo payments bring to the travel and ForEx sector are immediate and compelling, and Ace is one of the first to get ahead and start exploiting the advances in technology that make Ordo payments, instant bank transfers both for point of sale solutions and eCommerce payment processing, at low cost, a reality.
So be sure to head to Ace-FX before your next holiday and get saving! And book a demo with Ordo today to find out how we can help you optimise your business.