Bill pay innovation hasn't put consumers front and center

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The evolution of bill pay has traditionally meant adding a new channel or expanding the type of payment methods accepted.

While these changes have been important, none of them have moved the consumer to the center of the bill pay experience, nor have they created a holistic experience for consumers when it comes to paying and receiving bills, and to managing their cash flow all around.

If bankers have learned anything from treading a pandemic, it’s that providing personal services at the moment of need has become even more essential than it was before. Many financial institutions have acted as first responders for consumers and small-business owners in the wake of COVID-19, and must remain prepared for rising customer expectations, increased competition, new delivery touchpoints and rapid tech advances.

Perhaps most important will be the cultural shift in decision making and IT strategy that more clearly positions customers as the center of these plans. This shift, and the broader comfort with digital banking brought on by the pandemic, can finally help expedite the reinvention of bill pay.

With competition in payments so stiff, financial institutions must ensure expected offerings like bill pay are elevated to match consumer preferences and interests. And, financial institutions already hold the key to resolving many specific money moments of need. Alternative payment methods provide businesses and consumers more options, flexibility and freedom in how they make payments.

Here’s what traditional bill pay stands to gain:

More and more financial institutions are being positioned to deploy real-time payments. The addition of real-time payment capabilities within bill pay streamlines immediate payments from anywhere.

While digital wallets have seen limited growth since their launch, many are now incorporating bills into the mix. With bills being delivered directly to a customer’s digital wallet, there’s a promise of lowering biller costs, simplifying and accelerating payments, and increasing user engagement.

Financial wellness tools integrated into bill pay offer guidance and direction on monitoring cash flow, paying down debt, and growing savings.

Consumers already enjoy person-to-person (P2P) options for many of their money moments of need, but P2P has broader potential for monthly recurring payments. Repeat, mundane (though important) payments to individuals like caregivers, service providers, children and friends are prime for P2P; integration within bill pay extends the ways to pay in real time, with safety and assurance.

Business-to-consumer (B2C) disbursements are replacing ACH and checks as a payout alternative for things like payroll, insurance claims and tax payments.

Centralizing card-funded payments enhances traditional bill pay while creating new benefits to both the consumer and financial institution. Users gain the convenience and instant “pay now” gratification while optimizing card benefits such as rewards. Meanwhile, financial institutions can grow their bill pay transaction volume and generate ongoing non-interest fee income.

Request for Payment (RFP) is anticipated to impact bill pay in a big way, enabling businesses to send electronic invoices to customers when payment is needed. Customers can then pay the bill and share corresponding remittance information. RFP is designed to improve the control, flexibility and transparency of bill payments.

Data indicates that a clear majority of consumers say having multiple ways to pay increases their satisfaction and retention with their financial institution. And, that most consumers believe alternative payment methods like card-funded bill pay or P2P payments would help in paying bills on time.

Establishing a user-centric bill pay strategy means providing an experience that gives consumers and small businesses a complete understanding of their money movement, bill detail and available payment options for the best payment routing. Financial institutions must structure improvements around the user – not the product – and continue to give insights and context within the bill pay experience to elevate this utility once again.

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Bill pay Payment processing Digital payments Mobile payments