Today’s bill pay ecosystem serves three main constituents: consumers, billers and bankers. And each has very specific - and often conflicting - needs.
Consumers may not love paying bills, but when they do, they expect an elegant, Amazon-like experience, complete with fast, frictionless user experience and real-time confirmations.
Billers also want speed, but they are less interested in elegant UX and more interested in IOU. They want to get paid and asking them to wait days - or even weeks - for payments to settle is incompatible with today’s lightning-fast business environment. (This, by the way, is one reason so many billers encourage consumers to pay them directly on their websites. And consumers comply. According to Aite Group, 3-out-of-4 online bill payments are made directly to biller websites.)
Most financial institutions (FIs), meanwhile, offer bill pay as a core service pillar - along with direct deposits and loan payments. They know it’s something customers expect, but far too many FIs cling to an outmoded view that bill pay is purely a cost. This might explain why Aite found only 22 percent of consumers pay bills through their bank.
As a result, three different segments depend on one overly-complex ecosystem that is badly in need of enhancing.
Understanding the Bill Pay Landscape
As mentioned above, approximately 75 percent of bills are paid on biller websites. And even though this forces consumers to juggle a variety of login credentials, they elect to do so because it allows them to decide how and when they will pay their bills. (It also provides peace of mind because they receive immediate confirmations directly from billers.) The typical FI bill pay platform, meanwhile, fails to deliver on these features.
These were just a few of the takeaways that emerged from BillGO’s recent Bill Pay Knowledge Series webinars. The goal of these webinars was to provide digital payment executives with real-world insights into what consumers and billers look for in bill pay technology - and why most FIs are missing the mark. The webinars also provided steps FIs can take to optimize their bill pay platforms so that consumers and business owners can better manage their bills.
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The first webinar in the series - How Americans Pay Their Bills - provided a comprehensive overview of today’s bill pay landscape based on recently-compiled data from Aite Group and BillGO. Although the data filled a study that ran more than 100 pages, the webinar zeroed in on what consumers want when paying bills: faster payments, real-world confirmations, more payment choices, and a more engaging customer experience.
Co-presenter David Albertazzi, Research Director with AIte Group, summed up the findings nicely: “Customer UX trumps functionality. Right now, a commitment to the customer experience is paramount – and it may represent the biggest competitive advantage left for FIs to take advantage of.”
The follow up webinar, Demystifying the Business Case for Modern Bill Pay, detailed exactly how FIs can take advantage of the intel shared in the first webinar. BillGO invited some of the country’s leading FI executives to participate in a round-table discussion where they made the business case for modern bill pay. As one panelist pointed out, the bill pay technology found in most FIs has not evolved in two decades. But, she said, neither has a mind-set where bill pay tech is treated as simply an expense.
“Modernized bill pay platforms have the ability to turn bill pay into a revenue generator,” she said, “instead of something that - for years - was seen as just a cost.”
But generating revenue is only one advantage of modernizing bill pay. Several panelists agreed that modern bill pay can also drive and deepen customer engagement while also serving as a key differentiator in the increasingly-competitive financial services landscape.
“For us, it [modern bill pay] was also a point of differentiation in the digital experience,” Zachary Wasserman, CFO, Huntington Bank, told webinar attendees. “It gave us something that [is] significantly better than the status quo. It was one of the thrusts that make us different and marketable.”
Digging Deeper into Bill Pay
But even two webinars and a 100-page study can’t fully cover the complexities of today’s bill pay ecosystem.
That is why BillGO is presenting the third event in our Bill Pay Knowledge Series, this one entitled Consumers, Billers & Banks, Oh My!
For this third webinar, we have invited Sarah Grotta, Mercator Advisory Group’s Director of Debit and Alternative Products, to dig even deeper into the state of the state in bill pay. She brings with her more than two decades of experience in payments, banking, product innovation.
She shares the stage with Russ Chacon, BillGO’s SVP of Product Development, whose career includes a variety of executive positions with Fiserv, PayPal, Early Warning, Bank of America and others. Together, they will look at the many players now operating in the bill pay ecosystem, and discuss how infusing it with speed, choice, and intelligence can help improve the ecosystem so that it better meet the needs of its stakeholders – billers, bankers, and, most importantly, consumers.
Next Steps
If you’re a financial services executive focused on building your business in 2021, watch a replay of Consumers, Billers & Banks, Oh My! to learn how modernized bill pay can cut a path through today’s overly-complex bill pay ecosystem.