How Fintech is Shaping Digital Payment Engagement

By Kevin O’Brien, President Enterprise Solutions for EngageSmart

Driven by a rapidly evolving global landscape and the circumstances of the COVID-19 pandemic, brilliant minds across every sector have mobilized to advance the role of technology in a world that increasingly requires more virtual or contactless offerings, whether through virtual meetings, telehealth visits or contactless deliveries.

And while digital payments have made significant strides—for example, many organizations have seen significant increases in digital payment adoption—the experience of paying bills online is nowhere near as streamlined as it should be, given that digital payments were introduced in the mid-1990s. Limited options and glitchy interfaces are still shockingly commonplace. However, fintech is shaping and improving the way that customers engage through digital payments.

Self-Service Improves the Customer Experience

Gartner confirms that customer experience drives over 66% of customer loyalty—more than price and brand combined—and this is true for almost every industry. Customers expect more today than ever before. Simply offering digital payment and account management options no longer differentiates companies from the competition. In today’s landscape, customers expect to take care of payments and other account activity easily, on their schedule, and online.

According to a McKinsey survey, consumers are more likely to recommend companies to others with consistent and personalized experiences across channels. That means the infrastructure to support and facilitate these interactions is now table stakes. McKinsey also found that a substantial 62% of customers preferred self-service options over speaking with a company representative, and 75% agreed self-service is more convenient. In many sectors, the secret to happy customers is to leave them to their own devices—or at least provide the tools that enable them to handle essential functions and resolve issues on their own if they choose.

A Win-Win

Nobody enjoys paying bills, but expanding convenient self-service checkout options has tangible benefits for both the customer and the biller. A recent survey shows that 83% of customers prefer to make a payment through a digital channel, whether online (28%), on a mobile device (30%), through automatic payments (22%), or via text messaging (3%).

By offering self-service options in the form of tools like online payment portals, AutoPay, and digital wallets, companies experience fewer payment-related customer service calls and in-person visits, reduced mailed-in payments, less organizational and administrative spending, and more productive and satisfied employees. As more customers adopt automated payments, employees previously tied up with payment-related customer service requests can focus on more satisfying and higher priority projects, reducing burnout and fatigue.

Not only did customers report increased satisfaction from the improved user experience in the same study, some were able to avoid late payments as a result of automated payment reminders.

Reducing Friction to Increase Revenue

The concept of friction is often used to describe touch points along the payment route that cause unnecessary challenges. Points of friction are frustrating and can also be a significant barrier to the adoption of self-service options like online or automated payments. To effectively conserve time and resources, companies need to capitalize on opportunities that maximize efficiency, and identifying and eliminating friction points prove mission-critical for success.

First, it’s important to simplify the online payment process. In the past year, 67% of people have made a bill payment via mobile phone, while 63% have used an online portal. An omnichannel approach to the online payments process provides customers with the same experience regardless of where and how they want to pay. Providing a variety of payment options is important but true value comes from simple and intuitive experiences.

Take, for example, logging in to an account. If customers hit login walls, they’re unlikely to see the payment through, and the opportunity to collect revenue disappears, leading to more unnecessary spending. Frustrated customers will call or visit customer service, wasting time and resources due to friction. Ditching login walls and other friction points are worth the effort.

A second way to reduce friction is to offer paperless billing options. Sending digital bills assures that customers have the most up to date account information and even offers an opportunity to send them directly to payment, effectively removing friction. Customers only have so much time and patience, especially when it comes to an unpleasant task like paying a bill. But suppose options like paperless billing are not promoted clearly and often. In that case, it’s unlikely customers will enroll, forfeiting an opportunity to increase on-time payments, provide an exceptional experience, and reduce print and mailing costs. Furnishing a clear path for self-service enrollment options pays off: include QR codes or web addresses on physical bills and ensure enrollment routes are obvious on the company’s website and along the payment route (i.e., payment screens, confirmation screens). Not only should it be easy to find where to enroll, but the process should be quick and painless, and begin immediately.

Automation Powers Data

Automating age-old billing and payments processes may sound daunting. However, implementing a platform that engages customers is well worth the effort, for both billers and payers. Automating payments enables companies to optimize data collection, a crucial tool for catering to individual user preferences, impacting the customer experience. Employees can also use the data to replace the manual analysis of trends, saving time and decreasing errors.

As an example, 17% of government organizations have no way to determine what percentage of collections are late or do not arrive, not only impacting expected monthly receivables but also wasting time and resources following up with delinquent payers. Automating payments allows organizations to capture this data so the process can be accomplished digitally.

Conclusion

It’s easier than ever for consumers to get things done whenever and wherever they want. Convenient self-service check-out options are key for satisfying today’s customers, who expect effortless functionality regardless of the task. While the need for streamlined digital payment options is more evident in some industries than others (e.g., insurance and utilities), every industry can benefit from an increased focus on thrilling customers through enhanced digital options. This requires a simple user experience with access to choices that make self-service easy so your team is free to help customers who prefer a more personal touch.