When today's consumers think of going digital, they anticipate one-click simplicity. As nearly every aspect of life moves towards digitization, those anticipations become expectations, and the same goes for how they want to pay their bills. In 2020, 62% of the 15.5 billion bills paid last year were paid digitally. According to Aite Group, the online bill payment volume has doubled to 9.5 billion transactions annually over the last decade.
Today's consumers want a frictionless bill payment experience. However, third-party websites and biller solutions have historically been better at meeting consumers' expectations, taking up the majority of online bill payment market share. Direct billers capture 76% of all online bill payments, compared to 22% for financial institutions and 2% for big tech and fintech, which are building momentum.
Financial institutions are steadily falling behind and risk losing significant opportunities that can drive engagement and customer stickiness, and increase revenue. Your consumers want – and need – complete banking applications for a better oversight of bills and greater control over their accounts. Financial institutions are in the best position to offer just that, but they have to reinvent their bill payments solution first.
Understanding consumer values and trends in bill payments
Consumers shouldn’t bear the burden of figuring out complicated banking applications and jargon to pay their bills. Instead, they need a customer-centric bill pay solution that puts their needs first. Javelin reports that consumers value saving time, simple recordkeeping, and assurance that payments are made and recorded properly. They want easy access to their billing information, the ability to prioritize and organize bills, the confidence that their money is there to pay the bill and the ability to transfer it quickly.
Yet, the majority of the 15 billion bills consumers pay annually are not recurring payments. As many as 65% of payments are one-time in nature, and roughly 75% of those non-recurring bill payments are paid via biller websites.
So, what does this process look like for consumers? They’re juggling usernames and passwords to log into individual websites of direct billers and third-party sites to get their bills paid. Often, they run into difficulties and might even end up contacting a call center to ensure their bills are paid on time. A recent study found that 19% of U.S. adults cited complicated virtual payment processes as the reason behind their late or delayed payments.
To make matters worse, making an electronic bill payment through bank bill pay isn’t that simple either. In the past, setting up a biller can be cumbersome with a ton of errors. There’s also a lack of transparency where consumers can’t see how much is owed or the details of the bill they want to pay. Today’s financial institutions and banks need to pick up the slack where others have fallen behind when it comes to delivering a bill payment solution that addresses all of the consumers' needs if they want to have success.
The market needs an innovative bill payment solution
According to Statista, U.S. digital banking users are expected to grow year-on-year between 2021 and 2025, forecasted to reach almost 217 million by 2025. Digital banking also spans generations. Accenture reports that 69% of Gen Z-ers use mobile banking apps daily or weekly, and 17% of baby boomers have their hands on mobile banking apps.
There’s a reason nearly every person has at least one banking app on their phone – it’s easily accessible and a great experience. The American Bankers Association reported that 93% of consumers rated their banks’ online and mobile app experience as “excellent,” “very good,” or “good.”
Additionally, 53% of consumers say bill pay is the most essential mobile banking feature, according to an S&P U.S. Mobile Banking Survey. According to Mercator Advisory Group, of the transactions completed using a mobile phone, the most common activity is paying a bill. So, the consumers are there, and they want a bill payment solution, yet 11% of users reported that the bill pay feature isn’t available in their bank’s application. The only thing that’s holding them back is that they want a bill pay solution that offers the best experience.
A win-win for consumers and financial institutions
The market is obviously due for a new bill pay solution to improve the customer experience and help banks capitalize on the opportunities to move the market toward more digital interactions. Bill pay is also a sticky application that creates high engagement with other services. One example, Accenture reported that most consumers, including 70% of Gen Z-ers and Millennials, have shown interest in digital payments consultancy and expense management services that enable them to better understand and control their spending. Innovation will also encourage stronger engagement between financial institutions and consumers through bill pay services at a time when those relationships are waning in the digital space.
FIS® Fusion™ answers the call as a new money movement platform that provides a personalized, uncomplicated way for consumers to manage bills and help promote financial wellness. This customer-centric solution mirrors the market shift in how consumers want to interact with their bills. Keeping the mobile consumer at the forefront, users experience simplified navigation across all digital channels, increased engagement and improved loyalty.
With over twenty years in the making, the FIS Fusion bill pay ecosystem is virtually unmatched. Learn how the FIS Fusion simplifies money movement.