In recent years, merchants have chipped away at the bill payment market, offering consumers a pleasant overall experience and a breadth of payment options. While many financial institutions offer forms of bill payment, the experience, transparency, and setup is not ideal for consumers. Because of this, merchants continue to gain bill pay market share. 

To take a closer look at why it is important for financial institutions to recapture the bill payment market and how leveraging electronic bill payment and presentment (EBPP) technology enables them to do so, PaymentsJournal spoke with Nirmal Kumar, CTO and Head of Product at Aliaswire, and Sarah Grotta, Director of Debit and Alternative Products Advisory Service at Mercator Advisory Group.

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Automatic and digital payments are emerging as preferred bill pay methods

The chart below contains findings from a consumer survey conducted by Mercator Advisory Group on consumer payment habits. The survey revealed that consumers are choosing a breadth of payment types to pay their bills, and that the payment type they choose is largely dependent on their specific needs for each particular payment.

“This chart really epitomizes what the payments industry has witnessed in the bill pay industry,” explained Grotta. “There have been a lot of changes in bill pay habits in the past several years, and as with most payment types, there’s been an expected shift towards digital interfaces.” While some consumers still pay bills via check, there is a clear preference for automation and digital payment options.

Much of this shift is driven by the better customer experience digital bill pay can offer. Paying bills directly on a biller’s website often offers more payment choices, automation, and clarity of information surrounding the bill pay process.

Unfortunately, not every financial institution has kept up with these preferences. While banks do recognize that bill pay both drives institutional loyalty and is critical to consumers’ financial wellbeing, they are missing opportunities to make it a more central part of their interactions with customers. Ultimately, both increasing bill pay enrollment and creating a highly automated and efficient operating envir...