Utility companies must collect consumer bill payments on a fixed recurring weekly/monthly schedule. In the past, customers used to pay their utility bills by posting written checks via mail. Thanks to modern technology, consumers now use online billing for utility bill payments. According to data by Statista, the global digital payments market segment will reach $15.17 trillion by 2027 as more consumers switch to this form of payment.
To meet this demand for online billing services, utility companies are looking for platforms that help them accept payments and manage their utility customers’ usage metrics and invoices. They have the option to choose between a SaaS solution and traditional software. But which one is better?
This guide will look at the difference between a SaaS solution and traditional software, which one is better for utility bill collection, and the various solutions utility companies use for their billing operations.
What Distinguishes a SaaS Platform From a Regular Software Application?
Ideally, there are two types of software: traditional computer application software and software as a service (SaaS) platforms. The critical difference between these two platforms is that regular software needs installation and regular updates for access, while web-based SaaS applications require no installation.
Here are some other differences you should know.
Regular computer software has the upper hand over SaaS in terms of customizability. Utility companies own the software; therefore, they have the right to customize it according to their needs. On the other hand, SaaS is not as flexible because customization is limited based on the services offered by the SaaS company.
Traditional software requires the utility company to install and maintain the software, operating systems, and security components. SaaS applications are now more popular because they don’t need installation or dedicated manual updates. Statistics show that the global SaaS market size could reach $702.19 billion by 2030, up from $121.33 billion in 2020. Therefore, water, internet, electricity, cable, cell phone, and trash collection utility companies prefer SaaS solutions for customer bill collection.
SaaS solutions are more cost-effective than traditional software from an initial setup cost point-of-view. Utility companies that use SaaS payment platforms just pay the monthly subscription fees. For instance, SaaS platforms help save costs by setting up recurring ACH processing for customers. On the other hand, when utility companies use regular software, they must pay a costly license fee for each user.
Security and Privacy
SaaS platforms have a multi-tenant architecture, while regular software applications have a single-tenant architecture. This makes traditional software more accessible to hackers because they only need to breach one server to get all the data. Such an IT architecture is not ideal for companies dealing with sensitive customer banking and payment information; PCI-compliant SaaS platforms keep sensitive financial data safe.
Why are SaaS Billing Solutions Better?
Online billing via SaaS solutions is much better than traditional software because:
- Cloud-based services offer minimal disruption
- They are cheaper
- They incur no additional server or equipment costs
- They offer routine backups to keep data safe
- They offer self-service capabilities
- They can automate the entire business billing system
Which Solutions Boost Online Bill Collection?
Utility companies make the billing process more seamless by adopting omnichannel payment solutions to accept payments that attract more customers. A cloud-based SaaS platform has built-in software that makes accepting customer payments easier.
Some solutions utility companies use to help with online bill collection include:
- Hosted Payments: The hosted payment portal helps utility providers to mimic the company’s website interface and activate a payment system.
- IVR Payments: Customers pay their bills using IVR call centers. Large utility companies that deal with many queries, such as water and energy providers, rely on advanced IVR systems to collect payments via credit cards and ACH.
- Email Invoicing: Online billing becomes easier with email invoicing. Customers pay their internet or cable bill via credit card or ACH by clicking on the email link with the invoice.
- Recurring Payments: Utility bills often require variable recurring payments on a fixed schedule. Utility companies can set up payment plans for their customers that automatically deduct the bill amount at the end of the month using recurring bill technology.
- iFrame: The company integrates software technology for several platforms and keeps customers’ sensitive data safe with encryption.
- Check Verification: The best SaaS payment solutions offer check verification to avoid fraudulent activity and costly returned-check fees. This protects the business from financial loss.
- Security: PCI-compliant payment gateway solutions manage data for utility companies, so they don’t have to find another vendor to manage security.
What Benefits Does a Utility Company Get From Online Billing?
Streamlined Operations: When you have a self-service portal, customers process the bills independently. This frees up your office staff to focus on other areas.
Reduced Operational Costs: You’ll spend less on postage and paper since you don’t have to send paper bills.
Shorter Revenue Cycles: Online recurring billing reduces the time consumers spend paying bills. The bills are paid on time and faster, increasing the revenue.
Improved Customer Satisfaction: Your customers are more in charge of their accounts. They don’t have to follow up to receive monthly bills if you have a well-established automated payment and invoicing system for effective communication.
What Benefits Do Customers Get From Online Billing?
Convenience: Online billing makes life more convenient; customers can schedule payments and recurring bills for automatic deductions.
Security: Electronic billing is more secure than paper checks sent via mail. Utility companies have several layers of security to protect customer data.
Consolidation: Online bill payments help customers consolidate and track their bills, especially when planning their budgets and finances.
Utility collection becomes much easier if your company uses an omnichannel payment solution like iCheckGateway.com. Partnering with a Nacha-preferred partner will automate your bill collection process and help you accept payments via credit cards and ACH on a single platform. You can set up a recurring bill system to process monthly utility bills for your customers with an ACH debit facility while helping them save processing costs. Get started with a simple quote today!
MORE TAGS:Nacha Preferred Partnership, Payment Processing, Consumers, Software Integration, Recurring Payments, Energy, Faster Payments