Sunday , February 5, 2023

Decisions, Decisions

Is your bill-pay provider setting you up for success? Use this checklist to decide.

According to popular legend, the first online payment was made in 1994, for a Pizza Hut pepperoni and mushroom pizza. Whether that holds true or not, online payment processing has grown by leaps and bounds since the 1990s. Roughly 440 million consumers took advantage of mobile-payment options in 2018, and that number was projected to grow to 760 million this year, according to statistical database Statista.

Looking specifically at bill payment, another 2018 study found that consumers made 6 out of 10 bill payments electronically, a figure guaranteed to rise due to consumers’ pandemic practices.

What does this mean for your company? In part, it calls for an immediate reevaluation of your current remote payment systems and practices. The bill-payment vendor you’re using may no longer be the best fit—and may, in fact, be holding your company back from reaching its full potential.

Now that we’ve entered a new year still heavy with the prospect of distanced-everything, including shopping and bill paying, there’s no better time to consider whether your bill-payment provider is setting you up for success. To do that, use this checklist of five important factors found in a forward-thinking payment platform:

Factor 1

Accommodates all payment tenders and channels customers use.

Forget the old catchphrase “cash, check, or charge.” Today’s consumers can choose from numerous payment tenders, including card, automated clearing house, cash, and mobile-first payment options such as Apple Pay and Google Pay.

Add a variety of remote payment channels, including Web, mobile, text, interactive voice response, agent, and digital wallet, among others, and consumers have more payment tenders and channels available to them than ever before. With this in mind, it’s important to meet your customers where they are, however they choose to pay.

Your customers have different preferences for payment, depending on a host of factors. For instance, some payers may prefer to mail a check or log on to their account and pay using a credit card, whereas others may love the convenience of using their Google wallet.

Your bill-payment provider should have the capability to accommodate a wide range of customer preferences in a way that makes payments quick and easy, time after time. The vendor also must have the technical light-footedness to adapt as new payment types and channels emerge.

Here’s a case in point. Financial pundits used to claim, “cash is dead,” as they advised companies to put resources toward electronic-only payment streams. However, this advice ignored the realities of a large portion of current bill payers. One in 15 households is un-banked, without access to a bank account, debit, or credit card.

And approximately one in six households is underbanked, meaning they live paycheck-to-paycheck without significant reserves on hand to cover unexpected expenses and avoid overdrafts, according to the Brookings Institute.

For these consumers, the ability to pay bills with cash is essential.

A forward-thinking bill-payment provider must accommodate cash payment and, even better, think creatively about remote cash-pay options. For instance, some vendors make it possible for customers to pay bills with cash at retail locations the customers frequent regularly. The customer simply shows the checker a scannable code on his or her smart phone, pays the checker the cash, and collects a receipt. The cash is digitally transferred to complete the payment.

When your bill-payment provider has knowledge of both consumer preferences and technical capabilities, your company will reap the rewards of customer satisfaction and reliable, on-time collections.

Factor 2

Anticipates and addresses security risks.

Remote, independent bill payment can save your company big bucks on brick-and-mortar payment centers and customer service staffing—unless, of course, you lose money through security breaches and fraud.

A top-tier payment provider should help protect your company’s reputation and assets through comprehensive risk mitigation, fraud prevention, and compliance support.

Look for a vendor that offers real-time account validation and risk analysis to prevent payment reversals and fraud. NACHA will require account validation for all ACH originators of WEB debit entries effective March 19. Demanding that your bill-payment provider achieve this in time for the change takes that security step to the next logical level.

Additional protection can be accomplished through automation tools like business rules (coded if/then statements). The vendor can put a rule in place, for example, that says “IF a customer has two or more insufficient funds errors within a year, THEN the customer must only have the option of paying with a debit card or cash.”

In addition to preventing fraud, business rules can substantially reduce your need for manual processing and paperwork caused by both chargebacks and overpayments. A forward-thinking bill-payment vendor has business rules, as well as other automated tools, pre-designed and on hand to be turned on or off depending on your specific needs.

Finally, your provider should hold industry-recognized certifications, such as PCI-DSS, and undergo third-party audits to demonstrate its team’s knowledge of and proficiency at securing your customers’ data.

Additionally, they should offer regular compliance training for their own employees and ensure their agents know how to use their technology tools to stay compliant. Covid-19 and work-from-home have thrown some curveballs into typical compliance practices, especially for customer-service agents, so this is especially relevant right now.

Factor 3

Has a track record of reliability.

Many payment platforms pause their services on a regular basis to perform updates to their system. Updates are good and necessary, but downtime is a disaster for companies offering their customers 24/7 bill payment. Your offices might be closed on Sundays or in the middle of the night, for example, but many of your customers are still taking care of business at home, including paying their bills.

Keep in mind that downtime isn’t just inconvenient, it’s costly. Industry analysts have estimated that network downtime can cost companies an average of $5,600 a minute. Of course, that varies from business to business and industry to industry, but it demonstrates the seriousness of shrugging off unnecessary downtime.

When your customer is ready to pay, your systems and applications must be ready and waiting. Look for a vendor that mitigates or eliminates planned downtime, such as scheduled maintenance or product releases. It’s essential to find a payment platform that can deliver on that promise to ensure your company is prepared to compete in the 24/7 business cycle.

Factor 4

Enhances consumer engagement.

Engaging with your customers builds your brand, rewards loyalty, enhances the company’s reputation—and helps them pay their bills on time. Wait, what? Consumer engagement improves bill paying? That’s right, with the support of your bill-payment platform, your engagement programs can provide the reminders and tools to help customers pay on time, online and successfully, each time.

Here’s one example: The vendor can send customized payment reminders by text, email, or push notification at designated times before, on, and after the payment date. These can be further customized for customers with a history of late payments so they get more reminders or more urgently worded reminders. Also, the vendor can send reminders translated into the customer’s native language.

More advanced payment platforms also use smart, personalized links embedded in the payment-reminder messages. The customized links send customers directly to their payment screens without having to type in passwords or account numbers. This drastically improves follow-through on bill payment because the customer can act immediately and complete the task quickly, with only a few clicks or taps.

Additional messaging features can communicate welcome messages, announce new rates or products, deliver transaction receipts, or provide links to enroll customers in auto-pay, which is the ultimate driver of on-time bill payment.

With the help of your provider, you can be extremely creative at engaging customers in these types of win-win behaviors, and at a very minimal cost to your company.

Factor 5

Tracks and makes available the data you need.

For you to make the best, most informed decisions for your company and plan for its success, you need data about your customers, including how, when, and where they pay their bills. Your bill-payment platform should help you with that task, providing clear, consistent, and thorough reporting.

For instance, the vendor should track payment data either in real time on a per-payment basis or in batches daily or monthly. The vendor also should report on SMS/e-mail engagements with customers and click-through or response rates of those communications.

All reporting should be customized to display the information most helpful to your business, and the vendor’s dashboard should allow you to sort or filter by categories like payment data or payment status. Having a supportive, service-minded payment provider in your corner is key to helping you determine the best data-collection strategy and reporting schedule and format to meet your needs.

Decision Time

If your current bill-payment provider falls short on one or more of these factors, there’s no better time to consider other options and make the switch. You may be in a contract with a vendor that ties your hands for the moment, but that only means you have more time to conduct a thorough assessment of your needs and to interview several candidates to determine whether another vendor might be a better fit. Transitioning to a new vendor will take both time and planning, so factor this into your decision-making.

No matter your decision, the goal is to come out of this process knowing you have a bill-payment provider able to support your company in its growth and success. With trends in remote bill payment pointing skyward, that’s a strategy to prioritize in 2021.

—Michael Kaplan is the chief revenue officer and general manager at PayNearMe Inc., Santa Clara, Calif.

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