Consumer Expectations & Experiences

I’ve written in past years about the Fiserv Billing Household Survey, which describes consumer trends in paying bills. You can read those articles from 2013, 2015, and 2016.

I’ve been checking periodically to see if Fiserv released a similar survey for 2017, but can’t locate one. However, I did find a research paper, Expectations & Experiences | Consumer Payments, from April, 2017. You can download the paper from this link. Downloading requires your name and contact information but, from experience, I can assure you they won’t spam you!

Highlights from the paper

Here are some highlights from the research paper I think utilities would do well to pay attention to:

  • 74% of online banking users use online bill pay (page 3)
  • In the 30 days prior to the survey, the number one reason consumers used online banking was to pay bills (page 4)
  • 79% of consumers are satisfied with online bill pay (page 6)
  • Convenience is the number one reason consumers use either their bank’s online banking bill pay service or online bill pay directly from billers (page 7)
  • 76% of consumers say real-time payment delivery is at least somewhat important (page 9)

What does this mean for your utility?

Clearly, the trend is towards paying bills online, whether that means using your online bill pay site or your customer using their bank’s bill pay service.

If you don’t already offer online bill pay, I recommend you move as quickly as possible to start offering it.

If you do offer online bill pay through a third party, and it’s not fully integrated into your billing system (i.e. you have to import payments the next day), I encourage you to investigate a fully integrated online bill pay solution.

The final takeaway is, if you are still receiving paper checks when your customer pays using their bank’s bill pay service, to consider using a payment consolidator to receive those checks electronically.

Are you offering all the latest payment options?

If you’ve ever wondered if you’re offering the most popular payment options, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to discuss how a business review could benefit your utility.

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© 2018 Gary Sanders

Should you accept echecks…?

So you’ve got your online bill pay system in place and now you’re faced with what payment methods to offer. This includes which credit cards to accept and, more importantly, whether or not to accept echecks.

What is an echeck?

Echeck payments provide your customers the opportunity to enter their bank routing and account numbers and submit a payment to be electronically transferred from their bank account. This process is essentially the same as a bank draft, except the customer initiates the process rather than your office sending an ACH file to the bank.

Advantages of echecks

First, let’s examine why you might want to accept echecks. For starters, transaction fees are generally lower for echecks than credit cards. This means, if your utility absorbs the cost of processing online payments without charging a convenience fee, it costs you less to process an echeck than a credit card payment. If you charge a third party convenience fee, your customer will pay less than if they were to pay using a credit card.

Another reason to consider accepting echecks is some customers have checking accounts but no debit card so, without the echeck option, they wouldn’t be able to pay online.

Disadvantages of echecks

As was posted last week on one of the listservs I follow, echecks are subject to being returned if the customer incorrectly enters the echeck information.

This is because, unlike credit cards, there is no validation of the routing or account numbers as your customer is entering the payment. Likewise, there is also no verification of funds availability.

What this means is, unfortunately, echeck transactions are subject to honest mistakes in entering the information or, in some cases, outright abuse. I have had utilities tell me they are certain they have had customers intentionally enter erroneous echeck payments just prior to cut-off day to avoid being disconnected. This can work to the customer’s advantage if your returned check fee is less than your cut-off or reconnect fee.

The only real solution is to not accept echeck transactions and encourage your customers to use a debit card to pay from their checking account.

A reminder for North Carolina utilities

If you work for a North Carolina water utility, you should have received an invitation from the Environmental Finance Center to participate in a Utility Management Survey conducted by the EFC and North Carolina League of Municipalities.

If you, or someone at your utility, didn’t receive this invitation, please email the EFC directly at efc@sog.unc.edu and they will provide you with the specific survey link for your utility.

Should you offer additional payment options?

Do you ever wonder if your office should offer additional payment options? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could benefit your utility.

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© 2017 Gary Sanders

Is this really poor customer service…?

Recently, I was presenting my Improving Revenue Collections for Utilities presentation to the Alliance of Indiana Rural Water Fall Conference.

Part of my presentation deals with offering additional payment methods, such as bank drafts, online bill pay, and IVR payments. While discussing these, I stress how important it is to offer convenient ways for customers to pay without visiting the office.

Audience concern

About midway through my presentation, a gentleman on the back row raised his hand to voice an objection. This gentleman works in the industry, but not for a utility, and his concern was something to the effect of “it sounds like you are advocating for utilities to be less customer friendly by encouraging their customers not to come to the office to pay.”

My response

I explained that, quite the opposite, I firmly believe in – and advocate for – utilities providing outstanding customer service. I went on to explain that some customers, especially millennials, actually prefer not to interact in person.

By offering a fully integrated online bill pay system where customers can research their billing and usage history and make payments, your utility is actually providing an invaluable customer service. By doing so, and thereby reducing the number of calls or visits to your office, you actually free up staff time to more effectively deal with customers who have more serious issues.

By devoting enough time to adequately research and assist customers with excessively high bills or to set up a payment plan, your utility is able to offer even better customer service. If your staff time is consumed with walk-in customers merely wanting to make payments, they won’t have the time to devote to those customers who truly need the attention.

Do you ever wonder…?

Do you ever wonder if your office staff spends too much time dealing with walk-in customers? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could benefit your utility.

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© 2017 Gary Sanders

Have you considered a third party convenience fee?

When it comes to accepting credit card payments, there are two options regarding the fees associated with processing credit card payments. One is to absorb the fees as a cost of doing business and the other is to charge a convenience fee for credit card payments.

In the first case, your utility simply absorbs the cost and your customer only pays the full amount of the bill. In the second case, your customer pays a convenience fee, over and above the amount of the bill, and your utility pays the credit card fees from the convenience fee collected.

Some credit cards, such as reward cards and business cards, incur larger fees than others. Many utilities don’t want to incur the cost of credit card fees and they feel uncertain about charging a convenience fee, not knowing if the convenience fee will cover all the costs associated with accepting credit cards.

Third party convenience fees

A third option is third party convenience fees. If a third party provides your online bill pay or IVR service, such as Logics does with Logics WebPay and Logics PhonePay, the third party processor can charge the fee and your utility still receives the entire about amount of your customer’s bill. In this case, it is up to the third party to pay the associated fees from the amount they charge.

Additionally, convenience fees are not allowed by law in some states. If your utility is located in one of these states and you want to avoid the costs associated with taking credit card payments, third party convenience fees are the solution for you.

In office payments

Obviously, third party convenience fees can’t work for in-office payments because no third party is involved.

But, is there a way to charge a convenience fee for in-office payments?

One solution employed by some utilities is to install a payment kiosk in the lobby and direct customers who wish to pay by credit card to the kiosk. This need not be an expensive kiosk – it can be as simple as a retired desktop computer or a tablet device mounted in a frame so it can’t be stolen. The kiosk is configured to access only your online bill pay site and customers use this to pay by credit card in your office.

A side benefit of your customers using a kiosk in your office is they become familiar with your online bill pay site and may make future credit card payments from home.

Are you considering taking credit cards?

If your utility is considering accepting credit cards and you need assistance determining how best to go about it, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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© 2017 Gary Sanders

Save time processing bill pay checks

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

How to make your customers happier

For the last eight years, Fiserv, a global company in the financial services industry, publishes an Annual Billing Household Survey. This survey reports trends in how consumers receive and pay their bills.

Past Utility Information Pipeline articles referenced this survey in 2012 and 2014. The Eighth Annual Billing Household Survey is now available and this issue will highlight a few statistics from it.

Customers want choices

This graphic, from page 20 of the report, highlights how offering different billing and payment options impact customer satisfaction (clicking on any of the graphics will open a larger image in a new window):

Customer Satisfaction Factors
 

Multiple payment options

Almost as if it were written for the audience of this blog, consider this quote from the graphic on page 21 of the report:

“The expectation of multiple payment options does not vary depending on the type of biller. In fact, consumers expect a local utility to provide the same options as a national wireless carrier or cable provider.”

As the graphic shows, 79% of customers expect your utility to provide the same options as much larger national companies:

Expectation of Multiple Payment Options
 

Preferred payment options

According to the survey respondents, as shown in the graphic below from page 8 of the report, the majority of online households prefer to pay their bill at your website, ahead of paying by check:

Online Household Payment Methods
 
In third place is paying the bill online at the customer’s financial institution website. The text accompanying this graphic says:

“Between the Seventh and Eighth Annual Billing Household Surveys, there was a 72 percent increase in consumers making payments at both biller and financial institution websites. Paying bills at a financial institution’s site also grew significantly by 55 percent.”

Clearly, the trend is toward paying bills online, whether that is your website or the customer’s financial institution’s website. The next Utility Information Pipeline issue will deal with automating payments made by your customers using their bank’s online bill pay.

Paperless billing

The final statistic I want to highlight is how important paperless billing is becoming to customers. The graphic pictured below, from page 14 of the report, shows that 79% of households receive some of their bills electronically, and 25% receive all bills paperlessly.

Paperless Billing Preferences
 
In addition, only 22% have no interest in going paperless! Clearly, paperless billing is the way of the future.

Are you offering your customers the choices they want?

Are you offering your customers all the payment options they desire? Are you offering paperless billing? If the answer to either question is “no”, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com to learn how a business review could help you learn how your office could better meet your customer’s needs.
 

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© 2016 Gary Sanders