Propensity to Pay (PTP)
Propensity to Pay (PTP) is a key performance indicator (KPI) used in debt collections to estimate the likelihood that a customer in arrears will make a payment, either full, partial, or through a repayment plan, within a specified timeframe. This KPI helps collection teams assess the effectiveness of their engagement strategies and prioritise accounts based on payment behaviour.
In operational terms, PTP is typically tracked by measuring the number of customer contacts that result in a payment commitment or actual payment, expressed as a percentage of total contacts made. (propensity to pay model or propensity to pay score)
Formula (illustrative):
PTP Rate (%) =
(Number of contacts resulting in payment / Total number of contacts made) × 100
In the context of FCA-regulated collections, PTP should always be:
- Used ethically, without applying undue pressure to pay (CONC 7.3.4R).
- Supported by fair and transparent communication, where the customer is fully informed of their options and rights.
- Linked to affordability and vulnerability assessments, ensuring any commitment is sustainable and not coerced.
- Monitored in line with Treating Customers Fairly (TCF) and Consumer Duty principles, focusing on customer outcomes rather than just collections success.