Make users pay up front or after an application is submitted?

Question

Quick back story: My company has a web-based application that college-age students will complete (similar to the FASFAA) that helps them get awards, grants, scholarship aid from the schools they apply to. So, student and/or parent submits app to college, college admin looks over the app (which gives a very accurate and detailed financial picture of student/parent) and assesses student's need. The school admin will award financial aid to student. The point of the app is so that schools see a more complete picture of their students and award equatable aid (versus the FASFAA, for example.)

The problem: the application is very long and detailed (think filling out your taxes). There's a one time fee of $28 for new users to submit and $16 for returning users. Most users fill it out completely and submit. Others do not for whatever reason - too long, got accepted to another school that doesn't accept the application, gave up, etc.

Management people at my company want the payment process moved up to the beginning of the application, so even if someone starts but does not finish the application, we still get paid. In other words: person logs in, completes app, pays, submits. Management wants it this way: person logs in, pays, completes app, submits.

My question: I can't imagine making someone pay up front for something then filling out an application is any king of good UX nor can it be good for conversions (submissions). Especially if you don't give the person an incentive to complete it or set his/her expectation on why it is like this. What are your thoughts on the proposal of the management at my company. Have you seen that before? We planned on a usability test to try this out and collect some data - hopefully to push back in our favor. Can anyone give me research or point me in the direction as to why this should/shouldn't be okay to do?

Answer 1

Others do not for whatever reason - too long, got accepted to another school that doesn't accept the application, gave up, etc.

For me, this is the heart of the issue. To make them pay up-front is a business decision that raises some interesting questions/issues.

• Paying up front tells the user they should not start the process until they are sure it is worth completing. Is that mindset/outlook typical of the midset of your users? It currently sounds as if it is not. Design of the site and the form will need to be sympathetic to the uncertainty your users feel.
• Paying up-front punishes those users who begin the process and then find out they do not need to make the submission. Is your org okay with that? If they are not, a refund mechanism needs to be in place, or a design that allows for a cooling off period (e.g., We will submit this charge against your credit card when you a. submit the completed form or b. after 7 days whether the form is complete or not unless you return and cancel).

This could be made to work, but it would need to be very carefully handled. Testing is essential.

Answer 2

Will you be offering refunds to people who have paid, but did not complete the application? If so, this will increase the complexities of your systems and perhaps even incurr more costs (credit card refund costs, charge back fees).

Asking for payment or even just credit card details upfront can be a turn off. See this question about asking users for credit card details when test driving or trialing a product. In that question, most people voice concerns and distaste at having to enter credit card details before doing anything. In fact, squarespace makes it clear that NO credit card is required for a trial.

While your question does not deal with trialing an app, it certain has similarities.

The root of you problem, however, is whether users should be charged whether they complete the application or not.

• Is there any human intervention, costs during the application (whether completed or incompleted) on your side? If so, it may be justifiable to charge them a fee upfront as you incurr those costs no matter what. However, make sure you communicate this well and let the user know why you are charging up front.

• If you do not incurr any significate or any costs during the application process, then you should not charge for in progress/incomplete applications. This is essentially like being charging users while they are adding products to the shopping cart on a shopping website.