Electricity moves pretty quickly, to put it mildly. Water can travel at some robust speeds, depending on gradient, pumps and other factors. But when it comes to payment options offered by public utilities, progress toward digital can seem frustratingly slow, and for good reason.
Checks are often still the dominant method of payment for many utilities large and small. Worries about disenfranchising the under- or unbanked can slow progress toward online and mobile payments, as can corporate inertia, the ongoing use of legacy technology, the relatively long length of the utility investment cycle and even the tight knots of state regulation. But in a new PYMNTS podcast interview, Deirdre Ives, CEO and managing director, Wirecard North America, talks with Karen Webster about how public utilities can overcome those challenge and better serve all types of customers.
Such efforts, though, requiring a balance of different attributes, as one would expect from companies tasked with providing basic and vital services to pretty much everyone. “You have to making sure it is simple to use, financially inclusive and that you balance any innovation with the mission of supporting diverse payments needs,” Ives told Webster.
The interview took place as both the B2C and B2B worlds increase their focus on the benefits of providing quicker — even instant — digital payments and disbursements for a wide variety of situations, including the purchase of products from public utilities. Indeed, the recent Making Instant Pay Global Playbook from PYMNTS examines how public utility and other industries are adopting digital payments, and the regulatory and consumer satisfaction challenges at play as companies innovate.
The first step to competing in the digital payments world is entering it. Taking that critical step forward can be costly for public utility companies, however, because they still need to cater to less secure legacy methods like checks when providing gas or electric services to consumers.
As Ives told it, that means from day one — whether that means messaging or onboarding, or a customer’s first payment — digital should be the focus. “Right at the start, make it a digital experience,” she told Webster when asked about how to build a critical mass. “The smart guys are doing it over email and doing it with a payments portal.” Incentives can work, too — say, a rebate or discount on a monthly bill in exchange for making payments digitally.
Utilities, for all their reputation as slow-moving, heavily-regulated, analog-focused beasts, do in fact have certain advantages that can help those operations move further into the digital realm. “Utilities are very well networked at all times, and have partnerships,” Ives said.
But the challenges are significant — not the least of them being the long, often 15- to 20-year investment cycle that utilities follow. There are ways around that for utilities and the payment services providers that work with them. “Look for ways to make frequent, smaller changes to stay agile,” Ives said, especially via the use of middleware and other technology from those payments providers. Such changes might include building a mobile website or simply expanding payment options.
Stereotypes don’t help either — specifically, the usually well-meaning but often mistaken idea that big moves toward more digital payments will leave behind utility customers who are under- or unbanked. Ives pretty much shot down that assumption, saying it underestimates those customers and can serve as an unneeded hurdle.
“Many times, [such customers] are much more sophisticated then you give them credit for,” she told Webster during the podcast interview. “They have often been taking advantage of alternative financial services, and most quite seamlessly can [navigate] through a world of prepaid cards, money orders and payday loans. Don’t let innovation slow down by worries you are disenfranchising the underbanked.”
So what does early adoption of the digital payment ecosystem for utilities look like at the mid-point of 2019?
“It’s generally on the small side,” Ives said, referring to public utilities, “and partnerships with a company that can help them build out an easy intuitive paywall to make those types of payments super easy.” But trends are trends, no matter how slowly they may move, and you can bet on more public utilities doing more with digital payments in the coming years.