NEW DATA: 66% of Consumers Skip Their Banks’ Bill Pay Service

Today’s consumers demand modern customer experience features — from help managing day-to-day cash flows to advanced bill scheduling tools. As consumers look for ways to remove friction from payment processes, enterprising financial institutions (FIs) and FinTechs are reengineering customer experiences with online tools designed to bring transparency and control to consumers’ financial lives.

The Flexibility Factor: Mapping Consumer Demand for Bill Payment Innovation, a PYMNTS and BillGO collaboration, reviews the bill payment preferences of American consumers. The study analyzes responses from a census-balanced survey of 2,261 adults, revealing a profound shift toward digital payments and significant consumer interest in online tools that help individuals manage and protect their finances.

According to the report, consumer interest in tools that allow them flexibility and ease in managing their bills leads them to work directly with billers rather than their banks.

PYMNTS found that 63% of consumers who did not use their banks’ online bill-pay services to pay all their bills saw no reason to do so. Fifty-two percent of this group reported that the payment experience was not better in terms of features such as rewards, alerts, reminders and statement details.

FIs seeking to gain consumers’ interest in using their bill-paying services must be prepared to integrate rewards and time-saving features in addition to tools that manage routine banking tasks. Bill scheduling is a key driver of customer engagement with alternative billing services. This is unsurprising, as PYMNTS researchers found that missing a bill payment is top of mind for many consumers.

Forty-eight percent of consumers are “very” or “extremely” concerned about missing bill payments, and nearly as many are very concerned about the lack of clarity associated with tracking those payments.

PYMNTS data showed that 24% of consumers had a late payment or missed a payment in the last 12 months. The rates of late or missed payments are much higher for millennials (40%) and bridge millennials (38%) than the general population.

PYMNTS also discovered that many consumers want more than just tools that help manage bill payments; many need help finding the funds to pay their bills and are actively searching for third-party services that can provide support. PYMNTS’ research revealed that 17% of consumers are “very” or “extremely” interested in using a low-interest microloan to help them pay their bills. This interest rises significantly for consumers with high-income volatility (71%), those living paycheck to paycheck with issues paying bills (37%) and millennials (32%).

FIs and FinTechs have a clear opportunity to engage these consumers who are highly motivated to avoid missed payments and gain financial security.

To learn more about consumer interest in innovative bill payment options, download the report.