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Data for today’s episode is provided by Mercator Advisory Group’s Report: U.S. Bill Pay Market: Can Financial Institutions Win Back Payers?
The Stark Difference Between Current & Preferred Bill Payment Methods:
- 43% of consumers prefer to pay bills digitally (net), making it the top preferred bill payment method.
- 60% of consumers currently pay digitally (net), which is 17% higher than the 43% of consumers who prefer this method.
- In second place for preferred payment method is automatic (net), with 37% of consumers preferring that bill payment method.
- 60% of consumers currently pay bills automatically (net), which is 23% higher than the 37% of consumers who prefer this method.
- In third place for the preferred bill payment method is automatic deductions from checking accounts, which 20% of consumers prefer.
- 44% of consumers currently pay bills via automatic checking account deduction, which is 24% higher than the 20% who prefer it.
Consumers’ demands and expectations for bill pay created the shift towards digital interfaces and also an expectation around a choice of payments and greater transparency regarding payment status. Their expectations are often better met through biller solutions, not banking platforms. With improved technology for financial institutions, there is an opportunity to bring consumer bill payers back and provide enhanced convenience through a single, consolidated tool, as covered in a new report from Mercator Advisory Group titled U.S. Bill Pay Market: Can Financial Institutions Win Back Payers?
”More modern options for bank bill pay that include better notifications and payment choice will help to bring consumers back to financial institutions’ bill pay platforms. Bill pay is a critical component to securing consumers’ preferred financial institution status. But I don’t expect that consumers will return to their financial institution to pay bills at the same level experienced 10 to 15 years ago. Consumers have created the habit of paying directly with billers and the way that consumers establish services today, including the rise of the subscription model, supports more direct-to-biller activity,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.