The utility sector in the U.S. is growing at a phenomenal pace. There were almost 1700 electricity providers in the U.S. in 2020, serving 156 million customers. That number has evolved in the last two years; we now have around 3000 electric utility companies. However, the number of consumers has almost remained the same. These were some statistics about electricity providers only. There are thousands of other utility companies in the following sectors:
The new entrants in this space have created a more competitive market and forced existing utility companies to develop new ways of customer facilitation. That said, digitalization has become a way of doing things, but utility companies are falling behind. Studies by PYMNTS.com show that bill and payment processing is a feasible option for 53% of utility and consumer finance corporations, but only 12% of these firms actually use digital channels.
Integrating digital payment channels into workflows automates several critical processes. This article will help you discover
- Some of the most common and safest payment gateways
- Reasons why utility companies should accept online payments
Why are Online Payment Methods Important for Utility Companies?
Profit maximization is the ultimate goal of any business entity. Here is how utility service providers can benefit through online bill collection:
- Online payments are cheaper than traditional channels, such as checks. The average processing cost of a check varies between $2.00 to $3.85 or even more. Digital payments can reduce or entirely eliminate this cost.
- Digital payments are way safer than checks. There is no chance of payments getting lost in the mail, and the recipient doesn’t see the sender’s banking details.
- Utility companies reduce administrative expenses by up to 25% by moving to digital workflows.
- Customers appreciate billing solutions that involve a recurring payments option.
- Digital platforms provide customers with various options and ensure faster payments.
Top 7 Online Payment Channels for Utility Companies
ACH payments are not new in the utility sector. Both companies and customers prefer setting up a recurring payment system over ACH networks. ACH usually works in two ways:
- The customer sets up an ACH debit account and authorizes the utility company to take the payment or,
- The customer makes an ACH credit payment electronically.
ACH payments ensure that customers don’t need to pay their bills manually every month, thereby avoiding late payment fees. On the other hand, utility companies can collect payments fast without bothering their customers. Learn how to set up recurring ACH processing for utility bills.
2. Credit Card
Customers can use credit cards to pay utility bills in different ways. One, they can make monthly payments manually. Two, they can set up recurring payments and automate the bill payment process.
Utility companies usually prefer partnering with secure, third-party payment processing gateways to automate their internal workflows. Such automation helps them reallocate their resources to more important matters, such as handling customer grievances. Credit card payments attract customers because they get cash back or reward points.
3. SMS Payments
Collecting bill payments through SMS is a simple and fast process that works in two ways:
- Back-and-forth SMS communication, guiding the customer to follow the next steps
- Send a secure payment link and let the customer pay in their preferred manner
However, the SMS payment link should be a PCI-complaint online portal to minimize security threats.
4. IVR Payments
IVR payments became more popular during the COVID-19 lockdowns. Although 82% of the American population now prefers digital payments, the elder generation may not be comfortable with it.
IVR is an easy online payment gateway for the elderly audience that doesn’t like complex internet payment methods. This technology lets companies quickly and safely collect utility bill payments over the phone. It is a cost-saving approach for companies since they don’t have to hire dedicated call centers or live agents.
5. Hosted Payment Portals
Hosted Payment Gateways are a highly affordable utility bill collection method that offers the following benefits:
- They redirect customers to third-party payment processing services to complete the checkout process on the company’s website.
- They reduce PCI-scope and chargebacks with customized additional data collection.
6. Email Invoicing
Email invoicing helps utility companies dispatch a massive number of invoices daily. It allows the companies to share a secure payment link, and the customers can pay in any manner they prefer. Email invoicing eradicates the need to send paper utility invoices, helping companies save millions in collection and postage fees.
7. Virtual Terminals
Virtual terminals are secure and easily accessible web pages that allow utility companies to manage payments collected via various online payment methods. Virtual terminals are:
- Quickly deployed and integrated with various backend accounting tools like QuickBooks.
- Helpful in managing thousands of collections and payments daily.
- Helpful in managing current, previous, and upcoming events.
Bonus: Benefit of Using Online ACH - Cash Discount Programs
Cash discount programs help utility companies save payment acceptance costs of credit card payments. They encourage customers to pay via ACH or cash to save on processing fees. Using such programs, utility companies:
- Eliminate payment processing fees
- Keep 100% of revenue
- Ensure uninterrupted workflows
iCG’s Innovative Payments for Utility Companies
Digitalization is the way for any business sector, including utility companies. Studies show that traditional payment collection methods are riskier, as 66% of organizations encountered check fraud in 2020. Businesses and merchants are partnering with licensed third-party payment processing solutions, like iCheckGateway.com, to minimize the need for in-house technologies.
iCG offers multiple payments gateway technologies and complementary payment solutions like:
- ACH Processing
- Credit Card Processing
- Cash Discount Program
- Hosted Payment Portals
- IVR Payments
- SMS Payments
- Mobile Payments
- Recurring Payments
- Virtual Terminals
- Email Invoicing
- Check Verification
Become a partner with iCG, a Nacha-Preferred Partner, to accelerate payments simply, securely, and reliably.
MORE TAGS:ACH Technology, Payment Processing, Merchants, Recurring Payments, Energy