The last Utility Information Pipeline examined the Eighth Annual Billing Household Survey from Fiserv. One of the more interesting statistics from the survey was a graphic showing the preferred payment methods of online households.

The number one choice was paying online at your website. Number two was paying by check, followed closely by paying online at your customer’s financial institution’s website.

Online banking checks

When your customer pays online at their financial institution’s website, you recognize this because you likely receive a computer printed paper check with no bill stub included.

These online banking checks can be an annoyance because, as mentioned above, they arrive with no bill stub enclosed. This means you must rely on your customer to have entered their account number correctly. If not, time consuming research is required to locate the account number. Additionally, many customers, because they “paid online”, assume you will receive their payment immediately, not realizing a paper check must be printed and mailed.

I bank with Bank of America and they have recently changed their online bill pay process to more clearly identify which payments will be delivered electronically or by check. See the screen shot below for an example of a payment which will be delivered by paper check:

Online Banking Screenshot

Most banks don’t print their own online banking checks, preferring to outsource this process to a check processing service such as CheckFree or a division of MasterCard. These check processing services then print and mail the check to your office. However, if they detect additional checks scheduled to be mailed to your utility in the next day or two, they will often hold all these checks to mail in one large envelope, further delaying the delivery of your customer’s payment.

Electronic payment delivery

These check processing services deliver payments electronically to large volume payees such as large utilities, credit card and mortgage companies, but typically print checks for smaller volume recipients.

Fortunately for smaller utilities, there are payment processing vendors who expedite the process by aggregating payments from the check processors, deposit the funds in your account, and provide a file to be imported into your billing software.

Let’s examine some of the benefits of using an online banking check consolidator…

Improved cash flow

Rather than waiting a week, or longer, after your customer initiates payment to receive a check, with a payment consolidator you receive your funds much sooner, sometimes the next day.

Saves staff time

With a payment consolidator, you receive a file to be imported into your billing software. This saves the time of manually entering each payment.

If your customer entered an incorrect account number when setting up your utility as a payee, the payment won’t import correctly. Payment consolidators provide a way to enter the proper account number and have the system automatically correct the account number going forward. This saves your staff the time involved in researching account numbers each month.

Better customer relations

Because you receive the payment sooner, fewer customers receive late fees or are disconnected for non-payment, resulting in improved customer relations for your utility.

Are you interested in using a payment consolidator?

If you are still receiving online banking checks as paper checks, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a check consolidator could improve your operation.

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© 2016 Gary Sanders

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