Study Of Bill Pay Trends Uncovers Who Consumers Prefer To Pay-And When
Authors of an extensive, new study into the habits of consumer bill payers say they have found both compelling evidence and confirmation that consumers are increasingly turning to electronic methods to pay their bills and prefer to make those payments directly with their biller.
The study, said the parties that conducted it, also shows that consumers are turning to expedited payments to pay their many bills as close to the actual due date as possible and they have a variety of preferences for making those payments (see below).
The findings were uncovered as part of Fort Knox National Co.'s second annual consumer preference study. Fort Knox National Co., a provider of electronic payment solutions, commissioned the second annual Bill Payments and Expedited Payments Survey from Crone Consulting and Javelin Strategy & Research. The intent of the study was to identify key motivations and trends in using electronic payments.
"Do not underestimate the value perceived by consumers in a biller-direct solution. Consumers are expressing clear preferences for how they want to pay their bills," said Paul Flanigan, Fort Knox National Co.'s chief marketing officer. "Although bank-based consolidator and biller direct payment channels are both high in preference, when you combine all the biller direct payment options, it is a compelling element that two-thirds of bill payments are going through billers' channels."
According to the analysis, the study also points to an increase in expedited (last minute) bill payment. "We are seeing the impact of cycle billing in the survey results," said Richard Crone of Crone Consulting. "Cycle billing complicates personal finances by spreading payment due dates over the course of the month. The date on which consumers pay their bills has become a critical personal financial management issue."
According to the study, cash flow has become a factor of greater importance in the timing of payments, growing from 48% to 54% year-over-year.
The study divulged a number of explanations for the consumer trend toward utilizing expedited payments to pay billers directly, said its authors. Avoiding "late fees" was again the top overall reason (72%) cited for using expedited payments. Consumers also indicated a strong desire to preserve credit ratings. The study further found consumers indicating that they are willing to pay a convenience fee of $1.00 to $5.00 in order to avoid a late fee or negatively affecting their credit rating.