How to set up a hybrid collection method on a savings product

Overview

A collection method defines how funds are deducted from a user to fulfill their savings obligations on a savings product. It is a foundational configuration that directly affects how reliably users can contribute to their savings goals and how seamlessly the savings experience works end to end.

Lendsqr supports multiple collection methods for savings products, and the hybrid collection method is one of the most versatile options available. It combines two primary funding channels, debit card and direct debit (bank account), into a single flexible setup.

This means that when a user wants to fund their savings, they are not restricted to a single payment channel. Instead, they can choose whichever method works best for them at any given time, or the system can attempt one method and fall back to the other if needed, depending on how the product is configured.

This guide walks through how to configure the hybrid collection method on a savings product in Lendsqr, along with best practices, use cases, and key considerations to keep in mind.

Also read: 5 reasons why manual loan booking is still relevant for lending

What is the hybrid collection method?

The hybrid collection method is a funding configuration that enables savings products to accept contributions via both debit card and direct debit from a bank account. Rather than locking users into one payment channel, it supports both simultaneously.

Direct debit works by pulling funds directly from a user’s linked bank account, typically through a mandate or standing instruction. It is well suited for recurring, scheduled deductions and tends to work reliably for users who have a consistent bank account they operate from.

Debit card funding, on the other hand, allows users to fund their savings using a valid debit card linked to their profile. This is often preferred by users who are more comfortable with card-based transactions or who do not have an active mandate set up.

By combining both, the hybrid method caters to a wider segment of users and increases the probability of successful deductions, particularly in environments where payment infrastructure reliability can vary.

When to use the hybrid collection method

The hybrid collection method is best suited for the following scenarios:

Savings products targeting a broad user base. When a savings product is designed for a diverse group of users, some of whom may have debit cards but no direct debit mandates and others who prefer bank-based deductions, the hybrid method ensures neither group is excluded.

Products with flexible contribution structures. If the savings product allows users to contribute on demand or on a schedule, offering both channels means users can pick the most convenient method for each contribution cycle.

Operators looking to reduce failed deductions. One of the most practical reasons to use hybrid is to reduce failed or missed savings contributions. If a deduction attempt fails via one channel, the other channel may succeed, improving overall collection rates.

Savings products in markets with mixed payment preferences. In Nigeria and similar markets, users often have varying levels of comfort with card versus bank account transactions. A hybrid setup accommodates this variety without requiring separate product configurations.

Steps to configure the hybrid collection method

Follow the steps below to set up the hybrid collection method on an existing savings product in Lendsqr.

Step 1: Navigate to the products management section

Log in to your Lendsqr dashboard and navigate to the Products Management section from the main navigation menu. This section contains all the financial products that have been created under your organization, including loan products and savings products.

Step 2: Open savings products and select the relevant product

Click on “Savings Products” within the Products Management section. A list of all existing savings products will appear. Identify and click on the specific savings product you want to update with the hybrid collection method.

Step 3: Access the edit option

Once you are on the savings product detail page, locate the three-dot icon (also referred to as the more options menu) typically found at the top right of the product detail view. Click on it and select “Edit” from the dropdown options that appear. This action opens the savings product editing interface where you can modify the product’s configuration.

Step 4: Scroll to the funding method section

Inside the product editing page, scroll down until you reach the “Funding Method” section. This section controls how contributions to the savings product are collected from users.

Step 5: Select hybrid from the funding method dropdown

Click on the dropdown in the funding method section to view the available collection options. Select “Hybrid” from the list of options. This will configure the savings product to accept both debit card and direct debit as valid funding channels.

Step 6: Save your changes

After selecting the hybrid funding method, scroll to the bottom of the page and save your changes by clicking the save or update button. The savings product will now reflect the hybrid collection method, and users interacting with it will be able to fund their savings using either their debit card or bank account.

Best practices for using the hybrid collection method

Communicate available funding options to users. Once a savings product is configured with the hybrid method, make sure users are informed through your app or platform interface that they can fund their savings using either a debit card or direct debit. Clear communication reduces confusion and increases the likelihood of users completing their savings contributions.

Ensure users have at least one payment method linked. For the hybrid method to work effectively, users need to have a valid debit card or a direct debit mandate set up on their profile. It is advisable to prompt users to complete payment method setup as part of onboarding or account activation flows.

Monitor collection performance by channel. Where analytics or reporting is available, track how often debit card versus direct debit is being used and which channel has higher success rates for your user base. This data can inform future product decisions, such as whether to lean into one channel more heavily for a particular product.

Test the configuration before going live. Before rolling out a new or updated savings product to users, test the funding flow for both channels in a staging or test environment to confirm that deductions are processed correctly through each method.

Align the collection method with your product’s contribution schedule. If your savings product uses automated recurring deductions, direct debit is typically more reliable for scheduled pulls. However, for on-demand or user-initiated contributions, card funding may be more appropriate. The hybrid method supports both patterns, but understanding how your product is structured will help you better support and troubleshoot user issues.

Things to keep in mind

Changing the collection method on a savings product that already has active users may affect how existing users fund ongoing savings cycles. It is advisable to make such changes before a savings product is widely deployed or during a maintenance window, and to communicate any changes to affected users.

The availability of each funding channel also depends on your organization’s integration setup within Lendsqr. Both debit card and direct debit capabilities need to be active and properly configured at the platform level for the hybrid method to function as expected. If you notice that only one channel is working after setting up hybrid, verify that both payment integrations are enabled and correctly set up under your organization’s settings.

Speak to your Lendsqr account manager or review your workflow configuration if automated fallback between channels is a requirement for your product.

Summary

The hybrid collection method is a practical and user-friendly configuration for savings products that need to serve users across different payment preferences and infrastructure conditions. By enabling both debit card and direct debit funding on a single product, operators can improve collection success rates, reduce drop-off caused by payment friction, and provide a more inclusive savings experience.

Configuring it is straightforward: navigate to the savings product, open the edit view, scroll to the funding method section, select hybrid from the dropdown, and save. With the right user communication and payment method setup in place, the hybrid method can significantly improve the performance of your savings product.