If you’re a financial services executive, you already know how important it is fully understand the needs of your digitally-savvy customers.
Which is why - in the last decade - financial institutions (FIs) have expanded the menu of digital services they offer their customers to include modernized deposits, loans, transfers, and a host of other day-to-day banking activities.
However, most FIs continue to offer outmoded bill pay platforms that fail to meet the needs of today’s consumers. This explains why three-fourths of them opt to pay their bills directly to billers on less-than-secure biller websites.
This is a key finding from How Americans Pay Their Bills, a recent study BillGO created in partnership with Aite Group. Our comprehensive, 100-page study pulled back the curtain on an array of findings about the bill-paying habits and preferences of American consumers.
Here are four trends you need to know about to better understand what your customers want in bill pay technology:
Which Bills Are Priorities?
Of the more than 15 billion bills Americans pay each year, certain ones are prioritized:
- Having a roof over one’s head tops the list! Payments made for mortgage and rent bills account for a full 25 percent of all bill payments measured by Gross Dollar Value (GDV).
- Major credit card bills rank near the top, accounting for over 1.5 billion bills - followed by electricity bills (1.3 billion) and communications bills such as cable TV and internet (1.2 billion).
- Payments to credit cards have experienced the most growth in the last decade rising by 41 percent. (Meanwhile, landline phone bills dropped 35 percent in that same time period.)
When Do Bills Get Paid?
When asked whether they pay bills on a set schedule, 6-in-10 respondents said they follow a routine. The other 4-in-10 have no such schedule.
What is the overall preferred time to pay a bill? The most common answer was: as soon as it arrives.
Is COVID Impacting Bill Payments?
When asked if COVID impacted their ability to pay their bills, more than half of respondents acknowledged they now face financial challenges.
When asked which bills might not get paid due to COVID, half said they intend to find a way to pay all bills; however, here are the ones that may not be paid due to COVID-related hardships:
- 39 percent said charitable donations
- 34 percent said student loan payments
- 26 percent said cable/satellite TV and internet
- 25 percent said parking tickets and fines
- 21 percent said retail/department store credit cards
What Do Consumers Want When Paying Bills?
As mentioned above, 3-out-of-4 bills get paid on biller websites - a process that forces consumers to manage multiple logins. Which is odd since consumers say they want convenience. However, unlike most bank platforms, biller sites offer consumers the choice of how to pay as well as quick confirmations when bills are paid. These features override convenience.
Next Steps
Want to know more about consumer bill pay preferences and how BillGO can help your institution deliver on consumer needs? Download the full Aite/BillGO bill pay study to get in-depth analysis of how, when and where consumers pay their bills. You can also learn from industry analysts, payment experts and digital banking executives in BillGO's three-part Bill Pay Knowledge Webinar Series.
