Moving Beyond the Paper (Checking) Trail

Old habits die hard. Especially when it comes to digital payments. Even in an age when almost every activity has a digital counterpart (even dating, with avatars), paper checks remain a stubborn fallback for consumers who happily share their most intimate details on social media, or buy shoes online.

In a panel discussion earlier this month titled “The Check is in the Digital Mailbox,” PYMNTS president Gloria Colgan, Chuck Cordray, chief executive officer of Inlet, and Chris Johnson, vice president and general manager of Inlet, delved into the experience of consumers still inundated with paper – and the perplexing questions surrounding why they choose to remain inundated.

Noting that 80 percent of customers making bill payments across a variety of industries, from phone bills to utility bills to banking, opt to conduct business via dead trees, from getting statements in the mail, to sending checks out in response, Colgan noted the dichotomy between those activities and the fact that we have digital technology that is embraced for shopping – and the question is, and remains, how to take digital and bill payments and integrate them, boosting efficiency.

The numbers are sobering as presented by Inlet: there’s a bit of crossover as 57 percent of consumers receive paper and digital documents, while 23 percent only wish to do business via paper and a relatively paltry 20 percent opt for paperless, a number Inlet has said is “stalled.”

Among the reasons why that number has stalled, according to Inlet’s Cordray, is that ease of use is lacking – “too many usernames and passwords” with “not enough convenience and range of services” that would be instrumental in keeping consumers engaged with, and loyal to, digital payments solutions. Being able to manage all services from one central location is highly desirable, noted Cordray, as is the ability to select the method they choose for communication.

And consumers do indeed want to make the shift to digital at least in some respects, said Cordray, as 37 percent of consumers look to do credit card statements electronically, but 50 percent look to do so next year.

One way payments firms can increase customer use (and loyalty), offered Cordray, could come from keeping documents longer – not just a few months, but 18 months or even longer, as users may need documentation for taxes and other recordkeeping – “they control the copy,” added the CEO. And while the consumer chooses where they want to be, continued Cordray, brands using digital networks (such as Inlet) can communicate more effectively with the digital channels chosen by consumers.

With the discussion moving beyond the consumer, Inlet’s Chris Johnson stated that the same trends that drive paperless adoption on the consumer side of the transaction extend to the billing company as well – namely, “control and choice and convenience … resources are scarce [and companies] need to make informed decisions about who they partner with and how they allocate time and resources.”

Using the relationship between banks and their customers, Johnson stated that 50 percent of consumers have said that they want to get their statements through the banks. Johnson noted his own company’s ongoing partnership with Jack Henry’s payments platform, which lets the brands signing on to the iPay offering interface with several thousand banks and credit unions across the United States.

Through this example, said Johnson, customers select bills that they want to receive, and then they are asked to add in data – which is then matched by the platform.  Then the consumer can opt in to go paperless across that particular billing relationship (which Johnson also said is “constantly updated” to monitor legal compliance and ensure consents are in place). Inlet facilitates the bill pay, said Johnson “in the background.” Notably, replicas of bills can be viewed or downloaded, allowing for, as Johnson said “a record of the bill as if it had been paper” and there is also the ability to go back as long as 72 months – giving consumers “great confidence that they can go paperless.”

For the companies themselves, said Johnson, upselling and cross-selling opportunities can be realized. For example, as consumers are using online bill payment, they can also be prompted to consider expanding a credit line.

Looking ahead to 2016, Johnson noted his firm’s continued investment in digital mailboxes and contended this is an area that can see a “breakout in 2016,” which in turn means that billers can realize savings on postage, and, of course, printing.

Through the digital mailbox experience, users can use mobile devices to tap bills payment options, then enter a passcode, and choose what they want to have delivered to their digital mailboxes and then opt to “pay now” at the touch of a button.  Consumers, said Johnson, are willing to pay a “small convenience fee” for the use of digital mailboxes tied to mobile.

In response to a question from Colgan as to whether consumers can opt to add bills through their digital mailboxes, Johnson said that in some cases, should a consumer want to add such functions, they can do so manually, or even by photo, taking a snapshot of the bill and uploading it to the platform.

The payback for the companies who enable bill pay online, and foster ease in such relationships, is a tangible one, said Johnson.  Those customers tend to “be better customers” who pay sooner and also take on bigger bundles of services as a result of the ongoing relationship.