Direct bank payments turbocharge global expansion for car subscription service Loopit.
first-time payment success rate with GoCardless, compared to 80% for cards.
instant payments enabled by open banking will add value for Loopit and their customers.
Loopit is taking car subscriptions mainstream, with a tech platform that can be used by anyone from car dealerships and manufacturers to leasing and rental companies.
As Matt Blake, National Sales Manager, Loopit explained, the mechanisms for buying cars are largely the same today as they always have been – but the way people want to own them is changing. “What we've noticed over the years is more and more people are not actually owning cars anymore, they're looking to finance them in different ways,” he said.
Subscription business models have already emerged to disrupt the markets for various goods and services, from printers and ink to bicycles. Matt believes cars are poised to undergo a similar transformation, if companies can engineer a streamlined customer experience.
“Subscription business models are a fantastic way to allow your customers to drive your cars, sample your brand, and not be committed to a long-term finance agreement,” he said. “But we work in a world where people expect frictionless interaction with services. Subscriptions are no different – it's critical in a subscription business to be able to collect payments in a reliable manner.”
More successful payments, lower levels of fraud
With those criteria in mind, Loopit turned to GoCardless to power the direct bank payment component of its payment system.
Loopit accepts payments via card, but where possible recommends for customers to move their subscribers on to direct bank payments to lessen the risk of fraud and improve receipt of payment. “Direct bank payments are a valuable tool for our customers to leverage via the Loopit platform, they have a higher success ratio and can provide peace of mind for our customers, particularly when coupled with the upcoming advancements around real time payments.” said Jeremy Gupta, Chief Operating Officer, Loopit.
Direct bank payments are also more secure and offer greater first-time payment success rates compared to other payment methods.
Open Banking takes payments real-time
Loopit partners with subscription billing software specialists Zuora, with which GoCardless has a direct integration. According to Jeremy, this leads to less payment admin. “The fact that it is a two-way street in terms of that integration leads to less reconciliation, less maintenance, and it means that we can trust the system to just go and do its thing,” he said.
As a member of the GoCardless Enhanced Customer Success programme, Loopit also benefits from one-to-one access to a customer success manager, annual strategic account reviews and operational guidance during expansion to new regions and/or business units. “Enhanced Customer Success means that we've got someone that we can talk to at any point in time,” said Jeremy. “Importantly, they're proactive in outbound communications to us – that can be innovations, or it could be upcoming product enhancements.”
Going global, together
After a period of fantastic growth, Loopit is now planning to expand from its bases in Australia and New Zealand to the UK and Europe. It has secured $3.6 million worth of funding to support this effort. Along with the additional funding, Jeremy expects the agility of its payments platform and the global presence of GoCardless to be critical success factors for its expansion efforts.
“The technology we’ve built is extremely agile and allows us to keep pace with the growth of our customers,” said Jeremy. “GoCardless is a like-minded company in terms of the agility of its technology, which is helping us to grow quickly and at scale. Knowing that GoCardless already had a presence in other regions always meant that it was the right partner for us as we pursue our ambition of being a big global player.”
“We’re excited for what the future holds for our GoCardless partnership, especially the value PayTo will enable when it’s available,” said Jeremy.