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The Future of Bank Bill Pay

Although Americans pay over 15 billion bills a year, only half are paid online.

Even with the proliferation of digital capabilities, convenient payment types and the multiple devices we use now, 6 billion of these bills are still paid by check, cash, money order or phone IVR 1.

Bill Pay

Ten years ago, 40% of us paid the majority of our bills via bank bill pay, scheduling payments several days in advance. Now billers have invested in their own sites, providing a much better customer experience by eliminating late fees, offering credit card payments, and allowing for same day payment posting. With very little investment in bill pay and bill pay marketing by Banks, these sites have steadily pulled customers away and only around 27% of consumers pay their bills at their bank. We would be willing to bet there is an entire generation of young adults who have no idea consolidated bank bill pay even exists and this is problematic for a traditional bank’s future 2.

Banks have allowed this to happen for 2 reasons:

  1. Bill pay was seen as a pure cost
  2. Bill pay providers own the customer experience, not the bank

Therefore, if you can’t control the experience and it costs you money per user, why would you promote it? This legacy thinking must be reversed for one simple reason – value. Bank bill pay has always been the stickiest of digital banking capabilities. Consumers who use bill pay are more likely to consider the bank their primary bank. Meaning the customer has up to three times the number of products available and likely won’t leave easily (it’s painful). From our experience, a customer who uses digital and bill pay is worth up to 5x more than a non-digital banking customer. Isn’t that enough to give a complete digital and bill pay experience to your bread and butter?

At XUP, we believe there is a path to changing this mindset. Stop thinking about bill pay as a ‘requirement’ and start thinking about it as driving customer value. With API integration capabilities and emerging payment technologies, banks can now own the bill pay experience. Bill Pay can be transformed from a check-the-box offering to a customer focused, revenue-generating asset. XUP has designed the future of bank bill pay and we’d love to talk to you about what we see.

1 Digital Transactions, 2018

2 Mercator Advisory Group US Household Bill Pay Survey, 2019

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