A Day Late and a Dollar Short: Avoiding Past-Due Payments

No one sets out to pay a bill late, but sometimes it just happens. Whether due to cash flow issues, mismanagement or simply procrastination, 36 percent of consumers have paid a bill after its due date in the last 12 months, according to the Seventh Annual Billing Household Survey from Fiserv. And here’s something to consider this season – 21 percent of consumers blamed their past-due payments on a "hectic time of year."

No matter the cause, financial institutions and billers can help consumers avoid late payments and possible credit score dings with the right mix of billing and payment options, along with extras such as alerts, guest checkout and emergency payment methods.

Intelligent digital bill pay reminders are one way billers can help consumers manage their financial lives. Bill pay alerts become a digital “parent,” providing useful nudges before a payment is missed. Fiserv found that 66 million households are interested in setting up bill pay due date alerts, and 77 percent of respondents interested in receiving alerts say the functionality would enhance their satisfaction with a biller.

Non-registered bill pay options can also facilitate quick, one-time payments – and help overcome password fatigue. Compared to the previous year, Fiserv found a fourfold increase in usage of guest check out options among consumers who paid a bill at a biller site. The top reasons for using the popular guest checkout option include the desire to only pay once (46 percent), that registering takes too much time (40 percent), and that the consumer didn’t want another user name and password to manage (34 percent).

When a payment is late or nearly late, consumers want and need multiple options for making urgent, same-day payments. Think back to the 1980s, when billers offered only three payment channels – mail, phone and walk-in – and mail as the only way to receive bills. Today’s consumer can choose from many more offline and online ways to pay and receive bills, including via text, mobile app, tablet, mobile point-of-sale, and even wearable devices such as smartwatches. And consumers use an average of three bill payment methods each month.

This proliferation of payment channels has led to increasingly high consumer expectations – with 74 percent of those surveyed expecting their billers to provide multiple payment options. Fiserv found that consumers currently prefer to make urgent, same-day payments through a biller site (46 percent), over the phone (41 percent), via a financial institution website (30 percent), or by walking in a payment (29 percent). As channel expansion continues, consumer demand and expectation should follow suit.

Consumers clearly like choice, and the availability of multiple billing and payment methods, including those for expedited, card-funded and emergency payments, can improve customer relationships and boost satisfaction. Fifty-seven percent of consumers said they would be more satisfied with the biller if or when emergency payment options are made available, and 75 percent said those options strengthen their relationship with a biller. When asked about emergency bill payments made through a financial institution, 52 percent of respondents said having that payment flexibility would increase customer satisfaction.

Although millennials are 40 percent more likely to make an emergency bill payment – and 67 percent more likely to make an emergency payment through their financial institution website – billers should remember that consumers from every demographic are looking for a variety of strategic billing and payment options, including those that help them avoid late payments and facilitate emergency payments. Like the offer of a port in the storm, billers that offer convenient and accessible last-minute and emergency payment options, and reminders to help consumers avoid late payments in the first place, will be rewarded with a more satisfied customer base.

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