Could Banks Win the Race to Fix Consumer Bill Pay?

Paying bills online shouldn’t be unnecessarily difficult.

And yet, PYMNTS’ latest collaboration with Mastercard, “The One-Stop Bill Pay Playbook,” details just how much friction consumers experience when trying to pay bills digitally with pain points that include limited payment options and security concerns. When surveyed, 52% of consumers said they had experienced some sort of friction once in their bill pay experience over the previous 90 days, with 29% experiencing multiple pain points during the same time period.

A centralized bill payment portal, or “one-stop shop,” is an innovative solution to the problems plaguing the current bill payment experience. Instead of forcing consumers to pay each bill individually, such a solution would collect multiple billers’ bills in one place so that consumers could more easily track their expenses and efficiently make payments. When surveyed, customers signal strong preferences when it comes to reasons why they’d switch to such a tool.

More easily tracking bills, a more convenient experience, and faster payments are the leading reasons, with 54%, 52% and 50% of respondents interested in one-stop bill pay identifying these as important motivators for their interest, respectively. Nearly one-third identified convenience as their most important reason for interest. With so much friction when it comes to digital payments and transactions, along with 59% of consumers currently interested in a one-stop bill pay solution, you’d think this kind of tool would already be available, but there is so far no widely available “all-in-one” bill pay solution for consumers.

A successful first mover offering this tool would likely need to carry a reputation for reliability — one that both financial institutions (FIs) and non-FIs may offer. Consumer trust could thus mean a significant competitive edge in a space with hundreds of millions of potential users.

Banks are in a central position to address the increased consumer interest in, and potential adoption of, one-stop bill pay solutions. FIs already have many of the tools in place to provide consumers with a central platform to track and pay all their bills, provide enterprise-level security as well as convenience features. Being first, or at least early, in providing one-stop bill pay to reduce customer friction points given the tool’s current popularity, would almost certainly boost that provider’s customer engagement and satisfaction rates.

Along with potential greater consumer loyalty, banks may have a further opportunity by bundling one-stop bill pay as part of a greater set of financial tools, including loans such as bill consolidation. With card delinquency rates on the rise, it stands to reason there may be renewed consumer interest in this kind of loan, so there may be no better time for FIs to invest in this kind of offering.

Wells Fargo Head of Enterprise Payments Strategy Ulrike Guigui said the ultimate importance of investing in consumer-facing innovations such as one-stop bill pay is the customer’s financial health.

“It will require collaboration across the payments ecosystem to address our clients’ pain points and add value to their lives, both personally and professionally,” Guigui said. “It’s about leveraging relationships — financial institutions and FinTech partners — to create successful payment tools and solutions. I am confident that the industry will rise to this challenge.”

The competitive field bringing one-stop bill pay solutions to market remains wide open as consumers clamor for this convenience. For FIs and other entities, there may be multiple benefits to being first and best.