How Online Bill Paying Can Increase Customer Loyalty

Businesses and consumers now expect to be able to perform a wide range of financial tasks through digital tools, including paying common bills such as utilities, rent, or other monthly expenses.

Financial institutions (FIs) must evolve to deliver features that match these expectations as a result or risk losing customer engagement and lasting loyalty, forcing banks to innovate in their online bill payments for transactions. faster and more transparent.

Consolidating their consumer-to-business (C2B) and business-to-business (B2B) payments on a single platform through the use of technologies such as application programming interfaces (APIs) or other tools can help FIs to keep up with changing expectations – a growing necessity as late payments create more friction for their customers. Many companies are still looking to streamline their Accounts Payable (AP) and Accounts Receivable (AR) processes to meet the needs of their own customers, making any delays caused by their banks costly. One study found that 15% of receivables in the United States are not delivered on time, for example.

In the last Treasurer’s Guide to Optimizing AR Payments: Solving the Online Bill Pay Problem Edition, PYMNTS takes a close look at the changing bill payment needs of businesses and consumers, and why these changes make it crucial for FIs to keep online bill payments digital throughout the process. It also looks at how these changes may impact how payments and banking will be done in the future.

Around the world of B2B payment optimization

Companies are increasingly aware of the need to digitize their payment processesses, but that’s easier said than done for organizations that still use paper documents. Paper invoices are even more widely used by American businesses than their virtual counterparts, with 75% of the approximately 25 billion invoices sent each year still requiring manual processing. Such reliance drives up costs for businesses as they have to wait for employees to receive, verify and finalize approval of paper invoices – a time-consuming process that can also strain their relationships with customers awaiting payment. . Innovating their invoicing as well as their payment processes should therefore be a top priority for companies.

Late payments can also lead to cash flow problems for businesses as well as strained customer relationships if payments sent via online bill payment features revert to checks, for example. This can delay the ability of companies to finalize their claims by a few weeks. Businesses also continue to report difficulties obtaining funds from their own suppliers in a timely manner as they seek to eliminate friction in the bill-paying process, with research finding it took businesses an average of 58 days. for pay suppliers in the first quarter of 2021. This compares to the 55 days on average it took during this same quarter in 2020, indicating that although many organizations are aware of the need for digitization of B2B payments, problems persist. Finding bill payment solutions that remain fully digital throughout the process can be one way to overcome these sticking points.

Businesses aren’t the only bigare looking for more speed, transparency and overall control over their payment experiences. Consumers are also asking to be more involved in their banking, with 17% saying they wish they could finish financial tasks on their own without the help of bank employees. Individuals are also turning to online or mobile banking channels primarily when performing financial tasks, with 65% of consumers noting that mobile apps were their preferred way to interact with their own FIs. This growing use of digital channels is also translating into a greater need for banking features that are also digital, with 43% of consumers noting that they want easier ways to pay their bills. Meeting growing consumer expectations for speed and transparency should be a key objective for banks looking to maintain their engagement.

To learn more about these and other stories, visit the Guide’s News & Trends.

Why seamless digital bill payment features are key to building customer loyalty

Businesses and consumers need to pay their bills on a monthly basis – and both groups want to be able to do this easily and, above all, quickly.

This is especially the case after the two spent more than 17 months interacting with their billers on online channels, making it essential for FIs to meet their expectations for convenient payment experiences and fast as they seek to retain business and consumer customers, explained Aju AsarVice President of Enterprise Data and Analytics Services for Patelco Credit Union.

To learn more about why offering frictionless bill payment capabilities is critical to ensuring long-lasting customer engagement and loyalty, check out the guide article.

Dive Deeper: Keeping Online Bill Payments Fully Electronic Is Critical for FIs to Stay Competitive

Many employees who have moved away during the pandemic do not seem intend to return to their offices, which means companies must rush to innovate historically manual AR and AP processes to work through virtual channels. Many businesses’ continued reliance on paper checks is beginning to hurt their bottom line, furthermore, with 38% of businesses noting that they were experiencing cash flow problems due to blocked payments in an August 2020 survey. It is therefore essential for businesses to support frictionless payment experiences – and moreover, it means that it is essential for their FIs to ensure that payments made through online channels also reach their recipients.

To learn more about the changing AR and AP payment needs of businesses and why it is therefore critical for FIs to keep bill payments online throughout the process, check out the Deep Dive section of the Guide.

About the Guide
The Treasurer’s Guide to Optimizing AR Payments, a PYMNTS and CheckAlt collaboration, examines the latest B2B and consumer payment trends and how businesses can keep pace. It also examines which solutions and technologies are becoming essential to companies’ payment optimization efforts.

Joseph P. Harris