the bill payment industry is often overlooked, which is surprising given that bills are ubiquitous for all adult consumers. Fortunately, organizations like InvoiceGO pay close attention to how consumers pay their bills and what consumers are looking for in technology to help them better manage their financial obligations.
PaymentsJournal met Daniel HawtoffSVP of Bill Pay Product at BillGO, and Tim SloanVP of Payments Innovation at Mercator Advisory Group, to discuss BillGO’s recent e-book, Win the battle for Bill Payincluding highlights from several in-depth studies identifying consumer expectations of bill payment technology.
Bills, bills, bills: consumers want flexibility and speed
PaymentsLog Bills, bills, bills: consumers want flexibility and speed
Payment Choice Alleviates Bill Paying Anxiety
In 2021, Mercator Consulting Group surveyed 3,000 consumers about their bill payment preferences. Data from this survey can be found in the BillGO e-book, Win the battle for Bill Pay. Survey results indicate that consumers use a wide range of payment solutions for paying bills: 26% use debit cards and checking accounts, 19% use credit cards, 17% use checks and 12% use cash.
The reason for such a variety of payment methods is simple: consumers want choice and flexibility. “It depends on where they have the money,” Hawtof explained. Sometimes consumers may have to move money around to pay their bills, or they may be motivated to use a specific payment method, such as with credit card rewards.
And the reason consumers are demanding choice and flexibility stems from anxiety about paying bills. “There are a lot of late fees and high interest rates, and late payment can lower their credit score,” Hawtof noted. “Even a single missed payment can, in some cases, drop a person’s credit score by more than 180 points.” Consequently, consumers cannot afford to wonder where to find the money to pay their bills.
Even Sloane, a seasoned payments industry veteran well versed in the schemes employed by scammers, found himself willing to click on a fake XFINITY link recently when he was (mis)told that his bill payment had bounced back. “I looked at the URL, and sure enough, it was a spear-phishing exercise, which almost worked — even against me, and I’m pretty brainwashed against that,” Sloane admitted. “But that angst of not paying that bill almost got me.”
The role of timeliness in paying bills and cash flow
Consumers who have access to fast payments and billing confirmations often find that their anxiety is reduced, and for good reason: faster payments and flexibility go hand in hand. “Speed means flexibility,” Hawtof clarified. “For the consumer, he wants to be able to pay at the last possible moment; they want to pay on the due date. This gives them the flexibility to wait until all their money is received, their paychecks are cashed, and they don’t have to commit any money before it’s due.
Likewise, instant verification that checks have cleared also eliminates the stress of uncertainty. “You pay it, you go look at your account, you can see the money has been withdrawn – the anxiety is over,” Sloane pointed out.
Prompt payment of bills is the expectation of the modern consumer, regardless of where the money comes from. To this end, BillGO seeks the fastest possible bill payment methods and facilitates the transfer of funds at both ends, with separate processes for biller and payer.
“We have direct links with our bank and fintech customers who can quickly withdraw that money from the consumer’s account – obviously, only when the consumer wants it,” Hawtof said. “We then have a variety of payment methods, and several options are in real time, so [billers] be paid immediately or within the hour.
Changes in the bill payment landscape
About half of consumers use banks to pay their bills, but more than half pay some or all of their bills directly to a biller. There are several reasons for this mix of payment methods. “[Banks] are working to offer real-time payments, but not all of them have same-day confirmations,” Hawtof said. “Not all of them offer the bill visibility or the kind of speed and insight that the consumer expects.” For FIs looking to take over this bunch of bill payers, BillGO can help by consolidating this mix of payment methods and allowing consumers to see and pay all their bills in one place.
This centralized billing platform also responds to another trend induced by the pandemic: the increase in subscription billing. As many consumers found themselves confined to their homes, they began to order more from home – from media to groceries to restaurant delivery. “Usually they’re on-card billers,” Hawtof pointed out. “But let’s say your card expires or something happens to that card, and you want to switch to another card. Logging into each of these billers and making a change on the card can be a real pain. BillGO’s centralized platform simplifies this process.
Notification of receipt of payment can also be comforting to consumers. “When bills from Amex and other cards are paid, I get a notification that payment has been received and I’m ready for the next month,” Sloane said. “Yet most traders don’t.” BillGO comes to the rescue again by sending confirmations directly from billers, so consumers know the status of their payment.
Many financial institutions and fintechs still don’t offer great user experiences (UX) on their login pages, or fully embrace all the choice customers are looking for. “The key to this is that consumer expectation for an exceptional bill payment experience is only increasing,” Hawtof concluded. “Consumers expect speed, simplicity and mobility.”
Read the e-book Win the battle for Bill Pay to learn more about BillGO’s bill payment solutions.