In 2021, four in five Americans used some form of digital payment. They used in-app online purchases, browser-based purchases, QR codes, and person-to-person payments. However, according to a survey by Consumer Action, 63% of respondents said they prefer to receive utility bills by mail. This might seem contradictory. However, this discrepancy is an opportunity for banks and credit unions to attract more commercial clients, especially utility companies.
And here’s why. Although most respondents prefer to receive paper bills, 55.5% said they prefer to pay them online.
By offering digital payment solutions tailored for utilities, you can leverage the benefits of digitalization while meeting consumers' and utility providers' needs and preferences.
This strategic move coupled with powerful payment technology for banks and credit unions expand their commercial client base and positions them as valuable partners in the financial ecosystem. Let's explore the key advantages in more detail:
A study by Forrester Consulting found that “over half of the companies surveyed (52%) get more than 20% of their revenue from the partnership channel. And on average, partners contribute 23% of overall company revenue.”
So, by providing payment solutions to utility companies, small banks and credit unions open up new revenue streams.
They generate income through transaction fees, processing fees, or service charges associated with facilitating electronic utility payments.
Utility companies often seek financial partners who can provide efficient and secure payment processing services. So, if your bank and credit union is able to offer that, then you can easily attract and retain these commercial clients.
This niche market is often underserved by larger financial institutions because most utility companies still send paper bills. Offering digital payments to utility companies presents an opportunity for you to carve out a unique position in the industry and establish yourself as an expert in utility payment solutions.
This market differentiation leads to increased visibility, brand recognition, and business growth.
Let’s say you already serve these commercial clients. Implementing digital payment solutions streamlines the billing and payment processes, leading to improved operational efficiency. Automated systems handle bill generation, payment processing, and reconciliation, reducing manual efforts and associated costs.
Furthermore, transitioning from paper-based to electronic billing helps cut down on printing, postage, and paper costs, contributing to overall cost savings.
There are tens of payment solutions, but some are particularly well-tailored to utility companies. Here are the best ones to prioritize:
As of May 2023, the number of smartphone users worldwide stands at a staggering 6.92 billion. With smartphones becoming ubiquitous, mobile payment solutions have gained popularity due to their convenience, security, and ease of use.
Mobile payments for businesses empower consumers to transact anytime, anywhere, using their smartphones. With a few taps on their screens, they can securely pay for goods and services, including utility bills, without needing physical cash or cards. So, offering mobile payment solutions to utility companies greatly enhances the payment experience for their customers.
Recurring payments, also known as automatic payments, offer convenience for customers and predictability for businesses. Recurring payment options for utility bill collection reduce the incidence of late payments, leading to fewer fees and less time spent on collections.
How do you offer recurring payments? Use these methods:
This system allows utility companies to send their customers' bills via email instead of traditional postal mail. Email invoicing for banks and credit unions eliminates the costs associated with printing and mailing paper invoices. This results in significant savings for the financial institutions and utility companies.
Bills are also delivered instantly via email, speeding up the billing cycle and potentially leading to faster payments.
Additionally, you might want to explore the following payment solutions:
Successfully implementing payment solutions requires a well-thought-out strategy.
Here are some steps to take to ensure a successful rollout:
Start by conducting thorough research to understand the unique needs and pain points of utility companies.
Try to find answers to these questions:
Use surveys, interviews, or simply analyze available data to get answers to these questions.
After knowing what the utility companies are looking for, it’s time to get into a strategic partnership with a payment processor.
Here are a few considerations to keep in mind when choosing a payment processor:
Both utility companies and their customers may need assistance transitioning to new payment methods. Offer comprehensive training and support to ensure a smooth transition. This involves tutorials, FAQs, live support, and other resources.
At iCheckGateway.com, we provide a suite of secure payment processing for credit unions and banks, such as ACH processing, credit card processing, and even check verification services. We are also a Nacha-preferred partner, ensuring that our electronic payment processing for credit unions adheres to the highest industry standards and compliance requirements.
Partner with us today to enhance your offerings to utility companies.