by Mark Kacer
Online bill pay has increasingly become a preferred payment option for more and more customers. Right now what’s jet-fueling this trend is unmistakable – the economy.
A recently released Fiserv study (2010 Household Billing Survey) said it best; in the current economic climate “consumers value control and flexibility particularly when they are experiencing cash flow difficulty.” When in a bind, consumers want to hold on to their cash as long as possible and head to a service provider’s Website at the last acceptable moment to pay their bill.
Aside from the economic benefits, there are other obvious reasons why online bill pay continues to mature. The exponential growth in Internet usage has fostered the increase in online bill presentment and payment options by household (and other) service providers, like utility and cable companies. According to the survey results, 47.9 million households are utilizing biller direct Websites to pay their bills each month. In this hectic world we live in, customer convenience certainly plays a big role in all of this. I know my wife prefers to pay all of our bills online as its easier then cutting a check, paying postage and waiting a couple days for the check to post. She can also better control our cash flow, her added piece of mind.
But, the benefits aren’t all one-sided. Merchants can benefit from ensuring their customer’s have the option to pay their bills online, too. In this strained economy payments are harder to come by, it’s critical to be as payment friendly as possible. By offering online payment as an option, merchants can speed time to cash, and lower bad debt. Plus, you can rest assured that your customer will be more satisfied.
Merchants should also consider which type of payment options they are offering online to meet customer needs. According to the Fiserv study, 37% of consumers reported reduced use of their credit card. As consumers become more aware of their cash situation, they are going to be more conscious about borrowing. According to the National Automated Clearinghouse Association (NACHA), “ACH payment volume increased by more than 475 million transactions in 2009, bringing year-end total transaction volume to 18.76 billion, a 2.6% increase over 2008 activity. The biggest increase occurred in Internet-initiated payments.” Merchants should be sure to incorporate ACH payments as an option, a method that could also help eliminate credit card processing fees and the cost of payment acceptance.
Why Should Merchants Offer Online Bill Payment Options to their Customers?
- It offers your customers an extra payment option and creates an additional “bond” between your valued customer and your company.
- It’s easy and friendly to use. Customers only need to register the first time, then can pay anytime they want- 24/7.
- It’s convenient and practical for both customers and credit managers. Customers can work all day and pay their bills at night. It saves them time. Credit managers can work all day and receive payments without effort. It saves them time.
- It creates efficiency and enhanced productivity while improving cash flow along with automatic cash applications.
- Customers can pinpoint their payment and avoid late penalties or lost discounts.
- Customers feel more in control.
What do you think about online bill pay? What are some of the other benefits that you have seen merchants take advantage of by offering expanded payment options to their customers?
Tags: economy, Fiserv, internet, nacha, online bill pay