Best Practices Boost Bill Pay Adoption

Many consumers lack awareness and understanding of CUs’ electronic bill-pay services.

October 21, 2013

The use of electronic bill payment on credit union websites benefits both members and credit unions: The 2012 Fiserv Consumer Trends survey found that consumers who use electronic bill pay and electronic bills (e-bills) are more satisfied with their financial management processes and feel a greater sense of financial control.

And, there is a proven correlation between bill pay use and deeper member relationships: bill pay users have higher balances and lower attrition, and use more revenue-generating products than nonusers.

However, only 41% of online U.S. households reported using bill pay through their financial institution. Further, those that do use bill pay make less than 25% of their monthly payments through this service.

So why is consumer adoption and use of financial institution-based bill pay still relatively low? It seems that familiarity with existing routines and a pervasive lack of understanding about the availability and benefits of bill pay may be to blame.

From a consumer’s standpoint, the bill-pay process is a deeply ingrained and elaborate combination of paper and online processes spread across multiple physical and online locations. However, many consumers are dissatisfied with their routine.

While credit union-based bill pay can address this dissatisfaction by providing users with more control over the bill-payment process, consumers demonstrate a notable lack of awareness and understanding of the electronic billing and payment services offered by credit unions and how these services can help them.

Bill-pay adoption challenges

Several challenges impede consumer adoption and use of electronic bill payment. Fiserv consumer research identified three main hurdles that must be overcome to improve the bill payment experience and deepen these payment relationships:

1. Consumers are stuck in routines. A typical bill payment routine includes these steps: Review the bill when it arrives, put it in a queue to be paid (often in a stack of bills), pay the bill (using any number of electronic or physical methods), and record information about the date and method of payment on the bill and then file for future reference.

Elements of the routine play important roles, such as the stack of bills serving as a reminder to pay. Although many consumers may readily admit that their bill-payment process is less than ideal, they are reticent to change since they developed their own processes and have used those processes month after month.

The routine gives consumers a sense of accomplishment and assurance, so most consumers are not actively looking to change.

2. Lack of awareness and misperceptions. Some consumers still believe financial institutions charge for bill pay despite the fact that almost all offer free bill payment within online and mobile banking.

Consumers also express uncertainty around the reliability and speed of payment delivery, so they are hesitant to make their “important” bill payments through their financial institution.

And one-third of bill pay users don’t know if their financial institution offers the ability to receive e-bills within the bill payment service.

3. Fear and uncertainty. Change can be scary, especially if missteps such as a late payment can incur financial penalties or damage credit scores.

Members are unlikely to change their payment behaviors to include electronic bill payment, or more frequent use of electronic bill payment, unless they are confident that they understand how it works and feel that changing their bill-payment habits offers some advantages.

There are some best practices credit unions can employ to overcome these challenges and boost adoption.

NEXT: Bill pay best practices

Best practices to champion adoption

Research indicates the initial set-up process has a significant impact on whether members will embrace a credit union’s electronic billing and payment service.

Members may experience anxiety during their first interactions with bill pay, and the onboarding process may extend to several sessions or months as they build a sense of comfort and trust with the product and the steps involved.

A successful onboarding process addresses these potential barriers through tactics such as product design, user engagement, and ongoing communications.

Credit unions should consider implementing these best practices to grow electronic bill payment adoption:

Provide peace of mind. Electronic bill payment products should mirror members’ offline, paper bill-based processes to quickly build comfort and familiarity with the electronic bill payment service. A well-designed electronic routine will instill the same sense of accomplishment and assurance that members derive from their current bill payment processes.

Make electronic bill pay feel like a in. Some of the gamification techniques members encounter in many popular mobile apps and games can be incorporated into bill payment to engage new users. These could include a gradual introduction of features and functionality—letting users “unlock” advanced features after using basic features.

In the case of bill pay, this could mean showing a recurring payment option only after a user has paid that particular bill for several months in a row. These and other visually driven experiences such as progress bars can quickly build comfort and trust while giving users confidence to change their bill payment habits through the experience of a few early “wins” earned by trying the functionality.

Educate and reinforce bill-pay benefits with integrated lifecycle marketing. Credit unions should reinforce positive messages about bill pay at every member touch point through a program of lifecycle messaging. In such a program, members initially receive an email that describes bill-pay features and functionality based on how they have or have not already been using the service.

Messaging continues to be delivered throughout the user lifecycle, starting with support of bill payment onboarding and continuing to provide a gradual, responsive education that familiarizes members with electronic bill payment and its features.

In addition to online communications, having knowledgeable, engaged staff as advocates can be a powerful force in driving member adoption.

The Fiserv Consumer Trends Survey has shown that branch employees are a primary influence in many consumers’ decisions to try electronic bill payment. Nearly one quarter of Gen Y and Boomer respondents say a branch employee was the most influential source of information impacting their decision to enroll—more than any other single factor.

When working to drive awareness, staff education and engagement is a logical first step. It is surprising how many member-facing associates at credit unions have not used bill pay and do not know how it works.

Credit unions that want to grow member adoption and use of bill pay can improve the member onboarding process by educating and incentivizing their frontline associates.

Educational and promotional marketing is a next step, as many current and potential members do not understand the features and benefits of the bill-pay service. Marketing can encourage members to try or re-try the product.

Such internal and external marketing initiatives can work together to grow adoption and use.

Credit unions can spur adoption and drive increased use of bill pay by enhancing the onboarding process, by making bill-pay steps familiar and compelling, and by educating members about the service and its benefits.

Implementing these strategies and tactics will boost member satisfaction as credit unions help their members win the monthly battle of the bill payment.

DANIEL STEERE is Fiserv’s director of market & consumer intelligence.