Posted by Alison Arthur on 11 Oct 2018
The decisions that consumers make when paying their bills are driven by a variety of factors. For instance, what are their preferences when it comes to payment methods (ACH, debit cards, and credit cards)? Are they more likely to select a specific payment method depending on the industry that’s issuing the bill? What payment channels are they most likely to use? And what time of day is most popular for making electronic bill payments?
Here at Alacriti, we have unique insight into how consumers approach their bill payments. Our electronic bill presentment and payment solution, Orbipay® EBPP, provides a trove of transaction data from which we can gain a better understanding of consumers’ bill payment preferences and behavior. A deep dive into this data gives a glimpse at how customers fund their bill payments, when they are most likely to pay, and what payment channels they gravitate toward the most.
In this three-part series, we share some of the key observations we extracted from 2017’s transaction data. Part 1 is dedicated to insight we revealed about payment method usage including ACH, credit cards, and debit cards.
Insight #1: ACH was the most popular payment method offered by Orbipay EBPP clients in 2017
Across all clients on the platform, 93% offered ACH as a payment method to their customers. This was followed by debit cards (65%) and credit cards (61%).
Insight #2: ACH was the payment method selected most often by Orbipay EBPP users
Across all transactions, ACH was the most used payment method representing 51% of total volume for the year. Debit cards accounted for 31% of total transactions and credit cards accounted for 18%.
Insight #3: Debit cards were used most often for transactions under $20
When all three payment methods (ACH, credit cards, and debit cards) were available to users, debit cards were used most frequently (43%) for transactions under $20.00. For all other transaction amounts, ACH was the payment method of choice, especially for transactions that exceeded $2,000.00 (ACH was used 87% of the time).
Insight #4: When ACH wasn’t an option, users chose debit cards
Despite its popularity, not all Orbipay EBPP clients offered ACH as a payment method to their customers. For clients that didn’t offer ACH as a funding method but did accept payments via debit cards and credit cards, debit cards were the more popular payment method. They were used approximately 71% of the time versus credit cards, which were chosen 29% of the time.
Insight #5: ACH was the most popular payment method for Recurring and AutoPay transactions
For users that scheduled their payments using Orbipay EBPP’s Recurring (due dates and payment amounts chosen by the customer within the client’s parameters) or AutoPay (automatic payments with due dates and payment amounts set by the client) options, ACH was the payment method of choice. ACH payments accounted for 67% of all Recurring transactions and 71% of all AutoPay transactions in 2017.
Debit cards were the payment method of choice for One Time payments (single payments that were not part of an ongoing series) at 44%, Invoice payments (payments made toward specific invoices) at 46%, and Payment Plans (payments made in installments using parameters set by the client) at 58%.
Credit cards saw their highest usage for Invoice payments (34%), although debit cards were still used more often (46%).
Insight #6: Customers’ choice of payment method varied depending on the payment channel used
ACH was the most popular payment method for Web Portal transactions (payments that required a login via User ID and Password) at 71%. However, debit cards were used most often across all other payment channels analyzed:
Credit cards experienced their highest usage for Guest Payment transactions (no login required) at 28%, although debit cards were used more often.
Insight #7: ACH was the payment method of choice among many industries…but not all
Across all industries analyzed, ACH was used most often for Real Estate & Construction (82%), Manufacturing & Distribution (74%), and Government (69%) payments. The Utilities, Insurance, and Financial Services industries also had more than 50% of their payments funded via ACH.
Debit cards were used most often in the Education (55%), Banking (54%), and Healthcare (53%) industries. Credit cards experienced their highest usage for Education payments at 34%, although debit cards were still used more frequently.
Part 2 of this series will examine 2017 trends in payment options including AutoPay, One Time, and Recurring payments.
13 Jan 2020 Blog Adopting a Loan Payments Solution: Lessons Learned from Tech CU (Webinar Recap) Making loan payments easier for members is key for every credit union. Alacriti co-hosted a webinar with WesPay and Tech CU to discuss the benefits of implementing Orbipay EBPP to better their member experience.
18 Dec 2019 Blog 2019 Year in Review: Faster Payments, Digital Disbursements, and CAU In 2019, we reported on significant developments in the billing and payments ecosystem in areas including faster payments, digital disbursements, and card account updater. Here’s a look back at key themes we explored in our blog.