Friday , March 1, 2024

Consumers Say Friction Is a Leading Cause of Late Bill Payments, Especially Online

More than half of consumers in the United States have been late paying a bill in the past 12 months, even if they pay online, but not always for reasons associated with unemployment and financial hardships. For many consumers, late bill payments are a result of friction in the bill-payment process, according to new research. 

A recent survey conducted by electronic billing and payment platform provider PayNearMe Inc. reveals 19% of respondents said they were late paying a bill online because the process was too complicated. 

That figure jumps significantly among consumers aged 30 to 44. Among that demographic, 38% say they did not complete their bill payment online because they became frustrated with the process. Among consumers aged 18 to 29, 33.5% say they were late paying online because the process was too complicated. Two key reasons consumers in the 18 to 29 age group are likely to miss payments are difficulty keeping track of due dates (53%) and trouble remembering passwords when trying to log in to pay a bill (51%).

Overall, 27% of respondents said navigating biller Web sites that are not user-friendly makes paying bills more difficult. Some 51% of all respondents were late paying at least one bill in the past 12 months, whether online or by other means. Santa Clara, Calif.-based PayNearMe, which conducted the survey for the first time this year, surveyed 2,676 U.S. consumers, aged 18 and up. 

“There is friction in a lot of places when it comes to bill payment, especially online,” says Anne Hay, head of consumer research for PayNearMe. “If there is friction in bill payment, it can lead to procrastination and eventually late payment.”

Many of the problems that cause consumers to pay late online can be easily corrected, Hay says. Fixes include enabling consumers to download bills to their mobile wallet to provide a digital record of the bill that displays all pertinent payment information, such as the amount owed and due date. 

Consumers that download bills to their mobile wallets can also enable push notifications from billers, such as reminders when the bill is due. Nearly half of respondents (45%) say receiving a text message or email reminding them when the bill is due will make on-time bill payment easier, and 38% believe that a reminder including a clickable payment link would be even more convenient, the survey says.

“Consumers use their mobile devices for a variety of everyday tasks such as making purchases and ordering online, so why shouldn’t billers be able to live in consumers’ mobile devices,” Hay says. “42% of respondents say they would be likely or very likely to use a digital wallet to pay a bill. Having a mobile bill-pay strategy can increase on-time bill payments across age groups.”

PayNearMe is working with billers to enable their customers to pay bills directly from their mobile wallets, Hay adds. 

When it comes to using mobile wallets to initiate a bill payment, 38% say they would be likely or very likely to pay their bills using Apple Pay or Google Pay, while 35% say having the ability to store bills in their Apple or Google Wallet and pay via smart phone would make it easier to pay bills on time. 

“Late payments can have a cascading effect on billers, which includes disruption of cash flow and collections costs,” Hay says. “It benefits billers to find a better way to enhance the bill-payment experience to encourage on-time bill payment.”

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