Meeting customer preferences: The key to utility payments success

In today’s fast-paced digital world, utility companies face a growing challenge: adapting to the diverse payment preferences of their customers. ​As consumers increasingly demand convenience, flexibility, and personalization in their interactions, utility providers must evolve their payment strategies to meet these expectations.

According to ACI’s latest Utility Payment Trends Report, generational shifts in payment behaviors highlight the need for utilities to cater to their customers’ preferences. In this blog, I explore these trends and share actionable insights to help utility companies enhance customer satisfaction and accelerate their digital transformation.

The generational divide in payment preferences

Utility payment preferences are evolving, but not uniformly across generations. Younger consumers, particularly Gen Z and Millennials, are driving the shift toward digital-first payment methods, such as mobile apps, online portals, and automated payments. These generations value convenience, speed, and integration with their digital lifestyles. In fact, a 2025 MarketWatch survey found that more than 80% of Gen Z and 83% of Millennials trust and regularly use their banking apps, compared to just 66% of Boomers.¹

Meanwhile, Boomers and the Silent Generation² continue to favor traditional approaches, such as mailing checks or paying in person. This divide presents a challenge for utility companies that are trying to modernize their payment systems while still accommodating the preferences of all customer segments.

To bridge this gap, utilities must adopt a multi-channel strategy, offering digital options for tech-savvy users while maintaining accessible alternatives for those less inclined toward digital tools.

Mobile wallet adoption

According to the Utility Payment Trends Report, mobile wallet adoption is gaining traction among younger generations. In 2025, 63.9% of Gen Z and 65.8% of Millennials expressed openness to using mobile wallets for bill payments, compared to just 26.2% of Boomers. This trend highlights the growing comfort younger generations have with tech-enabled solutions, while older consumers remain hesitant due to concerns about security and unfamiliarity with the technology.

To bridge this gap, utility companies should invest in educational campaigns that demystify mobile wallets, emphasizing their safety, convenience, and ease of use. Personalized support, such as step-by-step guides or in-person workshops, can help build trust among older users and encourage adoption.

Payment method preferences

Debit cards remain the most popular payment method across all generations, with many consumers preferring them for one-time bill payments. Checking account deductions are gaining traction, especially among Gen X and Boomers, who value the reliability and automation of bank-linked payments. Interestingly, paper check usage has seen a modest resurgence among Boomers, reflecting their preference for tangible, familiar payment methods. ​These trends highlight the need for diverse payment options. Utility providers should encourage cost-effective methods such as ACH and debit cards, plus offer incentives to reduce check and credit card use.

The shift toward digital channels

The momentum toward digital payment channels continues to build, with nearly half of all utility bill payments now made through digital platforms, according to the Utility Payment Trends Report. This trend is part of a broader transformation in consumer behavior, where convenience, speed, and security are driving adoption of digital-first experiences.

McKinsey reports that 92% of US consumers used digital payments in 2024¹, with rapid growth in in-app and in-store transactions. Digital wallets and mobile apps are now mainstream, especially among younger and urban users. This trend presents utility companies with a clear opportunity to expand their digital services.

To stay competitive and meet evolving customer expectations, utilities must continue investing in user-friendly digital platforms that support seamless billing, payment, and account management experiences.

Digital adoption

Biller website usage has increased significantly, while mobile app usage has surged by more than 45%.¹ ​ These channels now account for nearly half of all utility bill payments, presenting a clear opportunity for utility providers to accelerate digital migration, reduce reliance on costly traditional channels like mail, and enhance customer satisfaction.

To capitalize on this trend, utilities should implement targeted campaigns that highlight the convenience, speed, and control offered by digital payments. ​ For example, during bill reminders or onboarding, providers can showcase the benefits of using mobile apps or websites, encouraging customers to adopt these channels.

Paperless billing

More consumers are choosing digital billing statements, while fewer prefer paper-only statements. This trend corresponds with changes in how individuals interact with communication technologies. ​

To further support this idea, a recent study by McKinsey reported that a preference for paper-only statements has declined. The survey of 44 US utilities revealed that while 63% of customers currently receive paper bills, that number is expected to drop to 55% within two years.³ This shift reflects growing comfort with digital communication and the convenience it offers.

Utility companies can drive paperless adoption by delivering consistent reminders at key customer touchpoints, such as monthly billing statements or online payment portals.

Successful strategies include:

• Multi-channel marketing to reinforce messaging across email, websites, and call centers
• Incentives like bill credits or exclusive digital tools
• Default enrollment for new customers and fees for paper statements to encourage digital engagement

Highlighting the environmental benefits, reduced clutter, and faster processing times of digital billing can further incentivize customers to make the switch.

Balancing digital tools with human interactions

While digital tools like AI-powered chatbots and virtual agents offer speed and scalability, the Utility Payment Trends Report reveals that human interaction remains the gold standard for resolving billing issues. ​Across all generations, most consumers prefer speaking with a live human during customer service experiences.

Generational comfort with artificial intelligence (AI)

Gen Z is most open to AI-powered solutions, followed by Millennials, while Gen X and Boomers prefer human interaction for billing issues. ​This data highlights the need for utility providers to strike a balance between digital efficiency and human-centered service. ​While AI tools can enhance customer support, they should complement—not replace—robust human assistance channels. Adapting service models to align with the technological preferences of different generations is essential for enhancing customer satisfaction and building trust. ​

Actionable strategies for utility providers

To meet the diverse payment preferences of their customers, utility companies should adopt a customer-centric approach that blends digital innovation with personalized support.
Here are some actionable strategies:

Strategy	Tactic
Offering diverse payment options	Provide a range of payment methods, including debit cards, ACH, mobile wallets, and traditional checks, to accommodate generational preferences Promote cost-effective options like ACH and debit cards through targeted incentives
Educating and supporting customers	Invest in educational campaigns to demystify digital payment tools, especially for older generations​ Offer personalized support, such as step-by-step guides or in-person workshops, to build trust and confidence
Accelerating digital adoption	Implement targeted campaigns that highlight the convenience and speed of digital payment channels Use monthly billing touchpoints to promote paperless billing and digital platforms​
Balancing AI with human interactions	Introduce AI-powered tools with transparency and clear value propositions ​Maintain accessible human support channels to address complex or sensitive issues ​
Tailoring messaging by generations	Align communication strategies with generational values, emphasizing convenience for younger consumers and reliability for older ones

Conclusion

Utility companies are at a pivotal moment in their evolution. ​As payment preferences continue to shift, providers must adapt their strategies to meet the diverse needs of their customers. Utilities can improve customer satisfaction, lower operational expenses, and foster stronger, more inclusive relationships by providing diverse payment methods while encouraging digital engagement, while maintaining an effective balance between technological solutions and human interaction.

The key to success lies in understanding generational differences and tailoring their experiences accordingly. With the right approach, utility providers can navigate the changing landscape and emerge as leaders in customer-centric innovation.
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Sources:

¹ 2025 Survey: Banking Habits by Generation

² Silent generation: People who were born between 1928 and 1945

³ State of consumer digital payments in 2024