Posted by Wayne Brown on 27 Nov 2015
How do you pay your bills?
On one hand, there is a large segment of the population that is not familiar with using a checkbook at all. For this segment, living within the digital world has become the norm. Whether streaming movies, instant-messaging with friends and family, or listening to their favorite music groups, they build their lives in the digital space and have made technology their trusted companions. This group lurks within the digital payment framework and is already comfortable using computers, mobile phones, and tablet devices to view bank balances and pay bills online. On the other hand, many people still use checks as a primary form of payment.
Despite technological advances, a large segment of the population still prefers older methods. Even though they use their bank accounts or go to company websites to make bill payments, this population still chooses to receive paper bill statements by mail. The paper statement in the mail represents a reminder to that it is time to pay the bill, which is why consumers opt to receive it when possible despite agreeing to make a payment and receive an e-statement online.
When a customer takes advantage of electronic payment channels but prefers to continue to receiving paper statements, it is called “double dipping”. A number of vendors have employed strong marketing strategies to incent their customers to migrate from sending checks in the mail to paying bills via online banking, accessing the company website to make a payment electronically, or even setting up a recurring ACH payment. However, there is research that shows although people are becoming accustomed to using electronic means to make payments, many of them still want to continue receiving statements in the mail. Why not cut out the paper statement entirely?
Although payments via the ACH yield benefits for the biller, many companies still need to work hard to encourage this payment channel. Despite all the marketing efforts, consumers are not fully adopting electronic payments, and it seems the solution is not complete end-to-end. One potential reason people continue to opt for paper statements may be for proof of address. Many institutions such as schools, government organizations, and service providers still do not accept printed electronic statements as proof of address, presenting a roadblock to the largescale acceptance of electronic bill statements over paper statements.
For most businesses, customer satisfaction remains the number one priority. Although implementing a bill presentment and payment service is not free, studies continue to show that this service is ranked highly in customer satisfaction surveys, so businesses should continue to look for ways to make it easy and convenient for customers to make a payment. However, evidence also shows that simply offering an electronic option is not enough to influence full electronic adoption. In coming years, businesses will have to make conscious effort to encourage customers to make the full switch to electronic bill presentment and payment by offering better incentives.
In terms of cost and operation, businesses would benefit the most if customers followed through with 100% electronic bill payment and presentment adoption. If customers are already making payments online, going 100% electronic would alleviate the need for paper statements, thereby saving money, resources, and the environment. Some companies set up their payment procedures so that when customers opt-in to making electronic payments, they also opt-in to receiving their statements electronically. Others present their customers the option to disable paper statements, but do not make the switch to electronic statements mandatory Whether or not the latter is an efficient process remains up for debate. If customers want electronic bill payment options, it might make sense make opting into electronic statements mandatory as well in order to reap the most business benefit.
Consumers expect the freedom and convenience of online bill payment, but it remains to be seen if they will fully adapt to receiving electronic statements in the long run. Businesses are finding it difficult to balance between consumer demands for new technology and paper habits that are hard to change. Looking to the future, these businesses will have to devise creative strategies to encourage full electronic bill presentment and payment adoption in the face of challenges that prevent largescale acceptance of electronic payment processes. In the meantime, some businesses may find it best to mandate electronic statements for customers who opt into electronic bill payment.
What is your preference for receiving bill statements? Do you prefer a paper or electronic statement?
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