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Will 2015 See the End of ACH Bill Payment Services?

Will 2015 See the End of ACH Bill Payment Services?

62% of consumers demand faster bill pay services than the Automated Clearing House (ACH) plans to deliver. Prepare to upgrade your bill payment services with real-time money movement or prepare to disappoint consumers.

 Consumers Expect Real-Time Money Movement When They Pay Your Bill

Source: Mercator Advisory Group

Why ACH Bill Pay Services Will Not Survive

  1. Too slow - Most ACH bill payments do not update consumers’ bank accounts until the next day. NACHA, which governs the ACH network, plans to speed up money movement, but their plans will still fall short of most consumers’ expectations. Mobile banking just became the most popular method of banking. Now consumers expect real-time updates to their checking account balances right after they pay your bills.

  2. Debit cards are more convenient - With fewer people carrying their check books, consumers prefer debit cards to ACH by a count of 3 to 1, according to Mercator Advisory Group.

  3. Funds are not guaranteed - When you receive an ACH bill payment, it is not until a later date that you do know for sure if you will actually receive the funds.

How to Prepare Electronic Billing & Payment Solutions for the Future

  1. Prepare to connect directly to your consumers’ banks to enable real-time money movement. The ACH network will be replaced by organizations of all types (consumer finance, higher education, insurance, etc.) connecting their electronic billing & payment solutions directly to the banks that consumers pay them from. 

  2. Move your paper-based auto-debit payments to a mobile & web-based electronic billing & payment solution. Consumers expect self-service options to update their account numbers, payment dates and view their bills electronically. This upgrade will prevent consumers from having to call you to make updates - saving them time and you money.

  3. Update your billing accounts in real-time. For example, when a consumer pays their insurance bill, they expect the insurer to update their “amount due” immediately. 62% of consumers also expect their checking account at their bank to be updated within 1 hour or sooner to reflect their bill payment.

No, 2015 will not be the end of ACH bill pay services. The work to re-engineer electronic billing & payment solutions to support real-time money movement, while well underway, will likely not conclude in 2015. But this tidal wave of real-time money movement will soon be here.