In the world of payment acceptance, there is no one-size-fits-all. Across many companies that regularly bill their customers, needs may vary across industries. However, they have some key challenges in common: adapting to changing consumer behaviors and finding more cost-efficient ways to operate.

For businesses looking to transform their payment operations, it’s important to understand what’s happening in the industry and how certain trends are influencing the requirements for choosing a bill payment platform. Here we’ll cover three critical areas for billers to consider.

1. Consumer behaviors

The seamlessly simple payment experiences of industry leaders like Amazon, Apple, Uber and Starbucks have reshaped consumer expectations. And the speed and convenience of apps like PayPal and Venmo have changed how people think about moving money. Billers can no longer just benchmark their payment processes against their peers—they need to measure up to the new standard for customer experience.

Consider these consumer trends shaping payments:

• Mobile-first: As smartphones continue to have more sophisticated capabilities and biometric security, it’s no surprise that more than 96% of Americans rely on these devices. Increasingly, consumers use their phones to pay for purchases, activities and bills. Many may prefer using a digital wallet over cash or cards, while others like the convenience of their phone versus a computer. As an example, PayNearMe’s 2024 consumer survey found that over 60% of people pay loans with their smartphone, nearly twice as many as those using a desktop device. 

  Also consider that mobile channels can make it easier to reach customers with payment reminders. Of those surveyed, 47% said that receiving a text message or email reminder when a bill is due would make it easier to pay on time.

• Alternative payment options: Today’s consumers, particularly digital native generations, have eagerly adopted non-bank payment options to send, receive and store funds. In fact, 53% of Americans use digital wallets (e.g., PayPal, Venmo, Apple Pay, and Cash App Pay) more often than traditional payment methods like cash or plastic, according to a Forbes report.

  As companies consider new bill payment solutions, gaining the agility to offer more flexible payment options is a significant factor, as it can measurably improve on-time payments. Consider the appeal of mobile wallets. Nearly 60% of consumers surveyed by PayNearMe said they would be very likely or likely to pay their loans that way, with PayPal being the most popular. And 41% said that ease and convenience are the most important factors in choosing which digital channels to use for paying recurring bills. This is a strong indicator that providing a flexible range of options could increase the likelihood of timely payments.

• Ease and speed: Modern apps have redefined simplicity in terms of payment, making it easy for consumers to get what they want just by swiping or tapping on their smartphone. Ease and personalization are critical. If consumers have to remember logins, account numbers and due dates, or fill out forms, they get frustrated over what they perceive as pain points. And when that friction is focused around bill payment, businesses may be at risk of late or missed payments.

  According to The Financial Brand, nearly 1 in 5 consumers paid an invoice late because online bill pay was such a hassle they didn’t complete the payment. And 52% of people surveyed by PayNearMe said that having to remember usernames and passwords makes paying bills more difficult. In choosing a modern payments platform, billers should look for a provider that solves for all of that, with an innovative payment experience that is fast, flexible and frictionless.

2. Technology advancements

As consumer expectations evolve, payment systems and their underlying technologies are growing more complex. Bolting new options onto legacy systems no longer works without a lot of heavy lifting. For instance, extending beyond traditional payment options like ACH and card, how can billers integrate proprietary digital wallet providers?

Interoperability and extensibility are key. That’s why the latest fintech innovations are built with API flexibility, enabling many disparate systems to ‘talk’ to each other end-to-end, from payment origination, to processing and settlement. This interconnectedness is essential for a payments platform to integrate seamlessly with a biller’s system of record (such as receivables management, CRM or a Loan Management System).

A modern solution also needs to efficiently pass transaction data to numerous business systems, for everything from customer service and collections messaging, to analytics for business intelligence. As a best practice, do not underestimate the value of payments data. Forward-thinking companies will want to tap into a wealth of insights that may be available to better understand and predict payer behaviors and preferences to improve personalization and collections.

The right payments platform provider can also enable billers to leverage the power of AI and machine learning. For instance, they might use AI to automate processes and reduce manual work, and generate more sophisticated analytics for strategic decision-making and targeted marketing to stay ahead of competition in a crowded market.

3. Regulatory considerations

2024 has seen an uptick in regulatory oversight from agencies such as the Consumer Financial Protection Bureau (CFPB). There is now even greater scrutiny into payment technologies developed and/or used by financial institutions, fintechs and other organizations. It includes a sharpened focus on regulations and guidance about maintaining consumer privacy and avoiding UDAAP violations related to potentially unfair or deceptive practices.

Many of the guidelines have added requirements that must be built into payment systems to ensure compliance and avoid costly regulatory actions. For businesses seeking a new bill payment solution, a key advantage of partnering with a fintech platform provider is that they can manage the effort of tracking regulatory changes and ensuring all aspects of the payments system remain compliant.

What’s next for choosing a provider

Building buy-in and alignment across an organization for a new technology solution can be challenging amid many stakeholders and priorities. To help smooth the journey, PayNearMe has developed a Buyer’s Guide with insights on what to look for in your next payments platform provider. View the ungated guide by clicking here.