In the U.S., the bill pay market is $3.9 trillion and growing slowly. But digital bill pay, which makes up half of all bills, is growing rapidly according to a recent Business Insider Intelligence report. That share is expected to expand to over 75 percent by 2022. Although many American consumers currently find it easiest to pay their bills directly to the company they owe, there is a lot to be said for consolidating bills – including housing costs, utilities, taxes, insurance, loans and more – into one digital, instant-pay app.
Bill pay today is far from a smooth process, and the healthcare, college tuition and loan servicing industries illustrate this:
- A survey showed that 15 percent of healthcare spending is due to billing and payment inefficiencies, and 47 percent of patients said they would leave a hospital for a better payment experience.
- In a world where college students send 120 text messages a day, immediacy is key. However, according to Aite Group, 40 percent of tuition payments are made by ACH (electronic checks), which takes days to process.
- Convenient ways to pay can reduce late payments on loans by up to 76 percent, while reducing call center volumes by up to 83 percent.
When consumers pay their bills through third-party digital bill pay applications, businesses lose their influence over the cost of payment and consumer experience. However, by offering better, instant and digital bill payment experiences for their consumers, companies can take control of that consumer touch point before it’s too late — before attrition.
The switch to real-time is a matter of when… not if
With real-time payments, money is instantly taken out of one bank account and deposited into another bank account, 24x7x365. This same transaction carries the payment and remittance data. These payments run on new rails and move money faster than same-day ACH and debit cards, and prevent ACH returns because they’re irrevocable – with guaranteed funds. When a consumer submits a payment, they’ll see it immediately taken from their account, preventing overdrafts. For businesses, this means improved collections, a reduction in operational costs associated with collecting and reconciling payments, and greater satisfaction from customers.
The switch to real-time payments is now a matter of when, not if, thus making it imperative that companies select partners that can support such payments now and in the future. To defend costs and consumer relationships, organizations must offer a better digital and instant bill pay experience now… or face increased competitive pressures from a growing list of entrants.
Ready to make the switch to real-time? Stay at the forefront of new bill payment options with ACI’s Real-Time Payments Resource Center