Is that really the case…?

A common reason many utilities offer for why they charge a convenience fee for accepting credit card payments is, “It’s not fair for all of our customers to pay for a few who want to use a credit card”.

But is that really the case? Certainly, cash and check payments don’t incur a fee from a merchant processor, but are they really “free” as these utilities seem to think?

Let’s take a look…

Cash payments

Cash payments require entering the payment, printing a receipt, and making change at the time of the payment.

Then, at the end of the business day, someone has to count and balance the cash drawer, and prepare a deposit. Someone then has to take this deposit to the bank. If, for some reason, the cash drawer doesn’t balance, the discrepancy must be researched, and that takes even more time.

Check payments

Check payments, if they are received in the mail, require opening the mail and entering the payment, unless you’re using a lockbox and there’s definitely a cost for that. Check payments at the counter or drive-up window must be entered and a receipt printed. Checks must also be balanced and a deposit made, whether that means scanning them for remote deposit capture or running an adding machine tape or listing them on the deposit slip, all of which take time.

None of this takes into account if the check bounces! If a check is returned for insufficient funds, you might have to research which account was paid by the check. Then you have to contact the customer and add the bad check amount and (hopefully) a returned check fee back to the account.

Credit card payments

Credit card payments, on the other hand, especially online and IVR payments, require minimal personal intervention compared to processing a cash or check payment.

If you have a fully integrated online bill pay or IVR system, the payments are immediately logged in your system and there is no need to import a file the next day. Even if your online bill pay system isn’t fully integrated, importing a file of credit card payments takes far less time than entering cash or check payments.

Balancing the day’s credit card payments is as simple as comparing the total in your system to the merchant processor’s website or the total from your third-party online bill pay provider.

And, of course, no bank deposit is required for credit card payments.

Some utilities don’t accept payments in person

I know of at least three utilities who, for various reasons, don’t accept cash or check payments in person. And I know of one other that accepts checks and credit cards in person, but no cash.

Admittedly, the three who accept no payments in person are all privately owned utilities. I completely understand the ramifications of a public utility not accepting payments in person.

However, this does underscore the fact that some utilities have acknowledged how costly accepting payments in person can be, and, consequently, they’ve opted not to.

How much does it really cost to process payments?

Obviously, there are costs associated with accepting cash and check payments, especially in person. But how much are these costs and can they be quantified?

This is where you can help!

I’m looking for a few utilities who are willing to invest the time and effort into logging the amount of time the aforementioned activities entail.

If you decide to participate, you will be provided a link to a Google spreadsheet where you can log the number of payments received each day and the amount of time required for each activity.

In exchange for maintaining this log for a month, I will provide you with a detailed analysis of how your utility compares to the other participating utilities. I will publish the results (without identifying the participating utilities) in a future Utility Information Pipeline.

If you’re willing to participate, please email me and I’ll give you a call to discuss the process in more detail.

Have you completed the 2019 Utility Fee Survey?

If you haven’t yet completed the 2019 Utility Fee Survey, please click here to complete the survey. It should take less than five minutes to complete.

If you have any questions, please feel free to e-mail me at gsanders@edmundsgovtech.com or call me at 919-232-2320.

Please feel free to share this survey with your peers at other utilities.

Thank you in advance for taking the time to complete the survey and for sharing it with other utilities.

Unsure what payment methods you should offer?

If you’re wondering if your utility is offering the best possible payment options, please give me a call at 919-232-2320, or email me at gsanders@edmundsgovtech.com for more information about how a business review could help you find out.

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© 2019 Gary Sanders

Consumer Expectations & Experiences 2019

I’ve written in past years about the Fiserv Billing Household Survey, now called Expectations & Experiences: Consumer Payments, which describes consumer trends in paying bills. You can read those articles from 20132015, 2016, and 2018.


Results of the 2019 survey

You can find a summary of the results of the 2019 survey here. Toward the bottom of the page is an orange button with a link to download a document with more detail about the survey results.

The document lists four major findings, of which the top three are applicable to utilities:

  • Online payment activity is increasing
  • Security concerns are decreasing
  • Decrease in need for a paper trail
  • Person-to-person payments are becoming more popular

Let’s examine the first three in more detail:

Online payment activity is increasing

While this isn’t at all surprising at face value, what is surprising is the use of online payments by baby boomers and seniors is increasing faster than any other age group. However, as was my point in the last Utility Information Pipeline, the overall use of online payments is highest among younger people.

Mail is still the most popular method of receiving bills (49%), but being able to view a bill from your website is close behind (41%), a significant increase from 2017.

Security concerns are decreasing

What I find most intriguing about this finding is more people believe paying their bill on your website (46%) is more secure than paying by mail (40%)! What this tells me is, if you’re not offering online bill pay, you are doing your customers a disservice!

Decrease in need for a paper trail

I hadn’t thought about this perspective in the past, but apparently one of the factors keeping customers from paying online is the lack of a paper trail. However, as the graphic above points out, the percentage of customers who don’t use online or mobile bill pay has decreased from 37% in 2016 to 28% in 2018.

The bottom line

In the final analysis, if you’re not offering online bill pay or ebill presentment, you likely aren’t meeting the needs of your customers, no matter what their age group is.

Have you completed the 2019 Utility Fee Survey?

If you haven’t yet completed the 2019 Utility Fee Survey, please click here to complete the survey. It should take less than five minutes to complete.

If you have any questions, please feel free to e-mail me at gsanders@edmundsgovtech.com or call me at 919-232-2320.

Please feel free to share this survey with your peers at other utilities.

Thank you in advance for taking the time to complete the survey and for sharing it with other utilities.

Unsure what payment methods you should offer?

If you’re wondering if your utility is offering the best possible payment options, please give me a call at 919-232-2320, or email me at gsanders@edmundsgovtech.com for more information about how a business review could help you find out.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2019 Gary Sanders

Is there a payment generation gap…?

I was recently reading a blog post from a LinkedIn connection about how Gen Z Consumers Shop. I’m not really interested in how they shop, but I thought it might provide some insight into how they pay. Interestingly enough, embedded in that article was a link to another blog post about how different age groups prefer to pay. Now we’re on to something!

Coincidentally, if you’re as confused as I am about Gen X, Gen Y, Millennials, and Gen Z, here’s a great explanation. What will the next generation be called? Gen AA? That’s a little spreadsheet humor…

Relevance to your utility

What is the relevance of all this to a utility? I think it boils down to knowing your customer demographic. If you serve a primarily aging Baby Boomer customer base, you probably still see lots of check payments, so you might want to consider some type of remittance processing system.

Similarly, if your customers are more likely to have a landline phone than a computer at home, an IVR system may make more sense than online bill pay.

On the other hand, if your customer demographic is younger, you probably see more use of online payments, either initiated through your customer’s bank or from your website.

And, of course, you want to offer bank drafts for all age groups!

Consider your options

The point of all this is so you can keep in mind your customer base when deciding what payment options to offer. Even though you personally might never use a particular payment method, it doesn’t mean your customers won’t.

Have you completed the 2019 Utility Fee Survey?

If you haven’t yet completed the 2019 Utility Fee Survey, please click here to complete the survey. It should take less than five minutes to complete.

If you have any questions, please feel free to e-mail me at gsanders@edmundsgovtech.com or call me at 919-232-2320.

Please feel free to share this survey with your peers at other utilities.

Thank you in advance for taking the time to complete the survey and for sharing it with other utilities.

Connect on LinkedIn

In the opening paragraph I mentioned LinkedIn. If you’re on LinkedIn and we aren’t connected, please send me a connection request!

Unsure what payment methods you should offer?

If you’re wondering if your utility is offering the best possible payment options, please give me a call at 919-232-2320, or email me at gsanders@edmundsgovtech.com for more information about how a business review could help you find out.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2019 Gary Sanders

Have you considered offering an incentive…?

Last week, I renegotiated my plan with my cell phone company. That’s always a tedious, time-consuming task, but my carrier does offer one nice feature.

The easiest way to pay

I’ve written before about why bank drafts are the easiest way to collect payments. And I’ve followed that up not once, but twice with advice for how to get more customers to sign up for bank drafts.

Which brings me to my recent experience with my cell phone carrier. They offer customers who sign up for autopay – their term for bank drafts – a $5.00 credit per line.

Why offer an incentive?

Clearly, this company has recognized that enticing their customers to sign up for bank drafts is in their best interest.

For every customer who pays by bank draft, that’s one less mail payment, or worse yet, walk-in payment your staff has to handle. If you use a lockbox to process mail payments, this saves the per transaction fee for each customer that switches from mailing a check to paying by bank draft.

As a for-profit company in a very competitive market, my cell phone carrier doesn’t charge a convenience fee for credit card payments. If they can entice customers who historically pay by credit card to switch to paying by bank draft, they save themselves the credit card fees for those customers.

What’s a reasonable incentive?

I realize that $5.00 a month is more than most utilities can afford as an incentive, but what is realistic? I know of utilities who have tried both of these options:

  • a one-time $5.00 credit
  • a $1.00 credit for the first year the customer is on bank drafts

Both of these seem reasonable and may be all it would take to encourage a customer to sign up for bank drafts.

Complete the 2019 Utility Fee Survey

If you haven’t yet completed the 2019 Utility Fee Survey, please click here to complete the survey. It should take less than five minutes to complete.

If you have any questions, please feel free to e-mail me at gsanders@logicssolutions.com or call me at 919-232-2320.

Please feel free to share this survey with your peers at other utilities.

Thank you in advance for taking the time to complete the survey and for sharing it with other utilities.

Is a bank draft incentive a good idea for your utility?

If you’re wondering if offering an incentive for bank drafts would be in the best interest of your utility, 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 you learn the answer.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2019 Gary Sanders

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 an online bill pay 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.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

What should a loose coin policy entail?

After the last Utility Information Pipeline issue dealing with a customer paying her entire $493 water bill in pennies as a “peaceful protest”, where I advocated for having a loose coin policy, a few readers inquired as to what a loose coin policy should entail.

Loose coin policy

At the very least, any loose coin policy should require that coins exceeding the amount required for a coin roll of that denomination be rolled. Standard coin roll denominations are:

  • pennies – $0.50
  • nickels – $2.00
  • dimes – $5.00
  • quarters – $10.00
  • half dollars – $10.00

It is also advisable to require your customer to write their name and phone number on each roll of coins in case there is a discrepancy in the amount of coins in the wrapper.

Obviously, you can use some discretion in enforcing the policy. If a customer showed up with 52 pennies to pay the exact change portion of their bill, it doesn’t make sense to require them to roll 50 of the pennies.

Benefits of a policy

With a loose coin policy in place, your office would be able to refuse to accept a wagon load of coins from an irate customer, such as the protest in the above story, unless the customer first wrapped the loose coins. This would save considerable time in counting the coins when they are presented for payment.

Have you completed the Utility Staffing Survey?

Just a reminder, if you haven’t yet participated in the 2018 Utility Staffing Survey, please click here to complete the survey. This should take less than five minutes to complete. The results will be published in a future Utility Information Pipeline.

Please feel free to share this survey with your peers at other utilities.

Thank you in advance for taking the time to complete the survey and for sharing it with other utilities.

Are your policies up-to-date?

If you don’t have a policy regarding loose coins, or feel like other policies may not be up-to-date, 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 your utility.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders