Paying bills should be one of the simplest transactions imaginable, but for years doing so has been cumbersome for consumers and businesses alike.
The bill payment experience changed somewhat as online payments slowly began to take the place of paper checks, but innovation has still proceeded modestly. While mobile devices are now replacing home computers for many consumers when conducting their routine financial activities, bill payment remains one of the few procedures that work equally well on older channels, according to Kelly Albiston, senior vice president and chief technology officer for Mountain America Credit Union.
“The world is run on mobile devices, really, but bill pay is interesting in that it does continue to be one of those use cases where a keyboard, mouse and desktop actually works well if you’ve got to pay a whole bunch of bills,” he told PYMNTS in an interview.
Nevertheless, consumers’ and businesses’ expectations of online bill payment have been changing since the advent of digital-first banking and faster payment options. Many users are expecting speedier and more convenient bill pay experiences as real-time payment networks and emerging technologies advance, making it critical for financial entities to keep up with these changing needs.
Keeping Consumers Engaged With Easy Bill Pay
The growing ubiquity of online bill pay as well as consumers’ increasing familiarity with near-instant transactions is putting pressure on credit unions (CUs) and other financial institutions (FIs) to keep pace. Offering seamless bill payment has swiftly become table stakes, Albiston said, with the feature becoming more crucial to engaging and retaining members.
“Once a member gets in there and sets up [bill pay], they’re unlikely to change it,” he explained. “They find a way to pay their bills, [and] they usually stick with that. Many institutions guarantee that a member’s bill will arrive on time and … that promise [generates] a feeling of trust [in] the institution, so it does create some loyalty … in that we’re helping them meet a deadline.”
Achieving that stickiness, however, requires the CU to continue to streamline bill pay for its members, who may have differing levels of understanding regarding how money movement is actually done, Albiston continued. Many consumers may not be aware of the difference between automated clearinghouse (ACH) and wire payments, for example, but as digital bill payment solutions become more commonplace, consumers are still expecting more out of their financial partners when they use these tools. These heightened expectations apply not only to transaction speed, but also to protection from fraudsters and other malicious actors.
“I do think there’s been a shifting consumer expectation on security,” he said. “[Consumers] expect more [simplicity], but they also expect [security] to be sometimes apparent in the experience. On simplicity’s side, I think this is a real challenge.”
Meeting that combined security and simplicity challenge is especially important as consumers’ and businesses’ interactions with bill pay evolve. Taking steps to prepare for customers’ future needs and expectations is critically important for CUs and FIs looking to remain competitive.
Prepping for Next-Gen Bill Pay
The way customers are interacting with bill pay and digital payments overall is changing as online and mobile transactions become the norm, Albiston said. Many consumers are now simply seeking out the easiest and swiftest way to pay their bills, so for them, having to wade through the complexities of different types of money movement is a friction.
“[There’s a percentage] of my membership base that knows what an ACH is,” he said. “They know what bill pay is … and when they go in digitally, that’s where they go in to look. Then I have an emerging group that’s coming into digital banking, and we either have to teach them what these products mean, or we just [have to] take away the complexity.”
Taking the complexity and the frustrations out of the bill pay experience is going to become more crucial for CUs and other FIs as customer expectations continue to shift. Implementing swift, real-time bill pay, such as what is available on The Clearing House’s RTP network, could be key for financial entities to bolster future customer engagement.