What are you missing with third party online bill pay?

One of the earliest Utility Information Pipeline issues (it was newsletter #12 and this issue is #187) dealt with the advantages of a fully integrated online bill pay system. Much has changed in the seven years since that issue was published and the topic is worth revisiting.

A good, fully integrated online bill pay system is like a Swiss Army knife – one tool that serves many purposes.

Do you offer online payments?

The most important question is are you offering online payments? If the answer is “no”, the obvious response is “why not?” Second only to bank drafts, online payments are the easiest way to accept payments. Especially if you charge a third-party convenience fee, because your customer pays the full price of processing the credit card transaction.

Even if your software vendor doesn’t offer online bill pay, there are many third-party options available. If a third party is your only option, I encourage you to consider it.

However, if your software vendor does offer a fully integrated online bill pay option, and you’re not taking advantage of it, here are some of the features you might be missing.

Real time integration

Third-party online bill pay vendors generally fall into one of two categories – companies whose primary line of business is payment processing and outsource print vendors. In the first case, an updated file with customer balances is usually provided to the third party once a day. Outsource bill print vendors who offer online bill pay generally rely upon the balance provided in the most recent bill print file.

The obvious weakness of either of these options is out-of-date information. In the first situation, payments made earlier in the day aren’t reflected in the balance. The classic case is a customer pays the bill in the morning and then, not knowing a payment has already been made, their spouse pays it again later in the day. The online bill pay vendor scenario is even worse – no adjustments or payments made all month are reflected in the balance.

A fully integrated online bill pay system solves this dilemma because payments are logged in real time and the customer’s balance is always up-to-date, eliminating the chance of overpayments on an account.

Additionally, third party systems require a file of payments to be imported the next day. This isn’t necessary with a fully integrated system because the payments are logged in the system as they happen.

History viewable online

Third-party providers generally provide little more than the customer’s balance and due date. A fully integrated online bill pay system should display billing history, payment history, and usage history.

The more information your customers can find online, the less they need to call your office for assistance, reducing the call burden on your customer service staff.

Customer portal

Over the years, fully integrated online bill pay systems have evolved into customer portals where customers can do much more than just pay bills and view history.

If you offer paperless billing, also called ebilling (and you should!), a fully integrated customer portal allows your customers to change their email addresses as desired, again reducing calls to your customer service staff.

Additional options provided by some customer portals include updating address and contact information, applying for service, initiating turn-off service orders, and sending messages to customer service.

Is your online bill pay system doing all it can for you?

Are you trying to determine if moving to an automated meter reading system is the right decision for your utility? 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 help.

Water and Wastewater Utility Management Survey results webinar

The 2017-2018 North Carolina Water and Wastewater Utility Management Survey is now complete. This survey was conducted by the Environmental Finance Center (EFC) at the University of North Carolina’s School of Government and the North Carolina League of Municipalities (NCLM) and covered the management and long-term planning practices and policies of North Carolina drinking water and wastewater utilities.

The results will be presented in a webinar, this Thursday, August 30, at 11:00 am ET. You can register to participate in the webinar here.

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© 2018 Gary Sanders

GDPR – what is it and do we need to be concerned about it?

If you’re anything like me, you’ve been inundated with emails over the last few weeks with privacy policy updates from what seems like every site you’ve ever visited. Of course, this isn’t a random occurrence – it is related to the GDPR becoming effective last week.

I recently received an email from a newsletter subscriber asking if I had any information about the GDPR and compliance by local governments. This newsletter is a more in-depth response to what I replied to her.

DISCLAIMER: I am not an attorney and the information here is not intended to serve as legal advice. If you have legal questions concerning compliance with the GDPR, please consult with your attorney. This also is targeted at utilities outside the European Union, specifically in the United States. If your utility is located within the European Union, this may not apply.

What is the GDPR?

GDPR is an acronym for General Data Protection Regulation. The GDPR was passed by the European Union (EU) on April 14, 2016 with an implementation date of May 25, 2018, after which organizations found to be out of compliance can be fined.

The GDPR deals with safeguarding personally identifiable information (PII) and applies to organizations inside and outside the EU. According to the official GDPR website, it applies to “a company established outside the EU offering goods/services (paid or for free) or monitoring the behaviour of individuals in the EU.”

Do we need to worry about the GDPR?

The above cited website goes on to explain that the GDPR does not apply if “your company doesn’t specifically target its services at individuals in the EU, it is not subject to the rules of the GDPR.” Clearly, utilities target their services at customers who live or own property within their service area, not based on where the customer resides.

This article from Government Technology clarifies the issue even better, explaining that, even if your utility has customers who reside in the EU, information you collect for online bill pay or applying for service, for example. would not be subject to the GDPR.

Still responsible for PII of your customers

Of course, this doesn’t mean you have no responsibility for safeguarding personal information of your customers, only that, if my interpretation is correct, you aren’t subject to fines for violating the GDPR.

If you aren’t sure if you are adequately safeguarding your customer’s personal data, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help you determine this.

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© 2018 Gary Sanders

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