Bill Pay: Paper or Electronic, What is Your Preference?

So how do you pay your bills? Many still use checks as a primary form of payment. However, there is a segment of the population that is not familiar with using a checkbook. They lurk within the digital payment framework and are comfortable using their mobile phone or tablet device whether to view their bank balances and payment histories or send a bill payment from their bank/savings account or bankcard. Living within the digital world has become the norm for this segment. They also build their lives from their computers and live on the digital cliff of society. Whether streaming movies, talking with friends and family or listening to their favorite music groups, the phone and tablet have become their trusted advisor.

However, despite advances in technology a large segment of the population prefer to receive their paper bills despite making payments on-line. Whether using their bank accounts or going to the company website to make a bill payment, this population still wants to receive their paper bill statement by mail. In a three month study conducted by a U.S. utility, it was noted that 91 % of their customer’s elected to receive their bills by mail. Even the younger segment, that is very comfortable with technology, chose to receive paper bills, 89% on average.

Having been in the Electronic Bill Presentment and Payment (EBPP) industry since the mid-90’s I have witnessed consumers shifting from using paper checks to pay bills to employing a digital framework for bill payment. When working with vendors the question still remains, what can be done to truly promote acceptance for customers to use technology and not relying on receiving the actual bill statement to remind them a payment is due?

A number of vendors have employed strong marketing strategies to incent their customer’s to migrate from sending a check in the mail to paying the bill via on-line banking or accessing the company web site to make a payment electronically or even a recurring ACH payment. When a customer takes advantage of both the electronic payment channels and fails to receive their statement through the digital channels but prefers to continue to receive paper statement this is called“double dipping”.

There is research that shows that consumers still value receiving their paper statement. They want something to hold that reminds them to make a payment. However, although a growing segment will not put a check in the mail to pay a bill, they will use electronic means to make the payment but want to continue to get the statement in the mail. Why not cut off the paper statement completely?

The postal service is not complaining by any means, however, “double dipping” enables the post office to get revenue. In order to continue to accept electronic payment through their website, they pay a per transaction fee to the vendor, which ranges from a few cents and on the high could be more that 15 cents to accept an electronic payment from their customer, in addition to additional monthly fees depending on the vendor setup. However, when a customer “double dips” the company sends the statement in the mail and postal costs can exceed 50 cents or more, all in.

Although sending a payment via the ACH results in benefits to the biller, many companies work hard to encourage this payment channel. How many times have you seen statement stuffers promoting the customer to send payments from their bank or savings account? Despite all the marketing efforts, consumers are not fully adopting electronic payments. It seems the solution is not complete, end to end, since many want to receive their statement in the mail and opt out of receiving an electronic presentment of their statement.

So given this, what can be done to improve the efficiencies? For some companies when their customers op-in to make an electronic payment this includes the receipt of their statements digitally. Others will allow their customer to opt-in for bill presentment and make it very difficult to receive the paper statement.

However, is process efficient? Technology is used to enhance our lives resulting in disruption. Customer satisfaction remains the number one priority. Although implementing a Bill Payment and Present service is not free, studies continue to show that customers rank this service high in customer satisfaction surveys. Therefore, companies continue to look for ways to assist their customers to make it easy and convenient for them to make a payment. What is your experience? Have you opted to cut off the paper even though you have paid your bill  digitally? What does the bill statement represent for you?

The Walker Group is a business development and marketing company serving multiple industries including banking, finance and technology. Our varied market segments helps us to identify synergies and opportunities to stimulate growth as we partner with our clients to build their business. Through our one-on-one CEO Advisory Services we have helped companies to navigate through key business problems, increase sales, build new revenue streams and gain new customers.