Utility companies need a steady stream of income to continue providing services to customers. Electronic payments or digital money transactions ensure these companies receive their funds in a timely manner. They no longer need to wait for the postal service to deliver an envelope, process the payment, and ensure it clears the client’s back. An electronic payment takes significantly less time to process from start to finish.
Electronic payments come in many forms. Furthermore, they offer numerous benefits over conventional payment methods, such as checks and money orders. What are the advantages of digital bill payment for utility companies?
Electronic Payment Options
Electronic payments come in one of four forms. Most people think of credit card payments because they remain the most common type of electronic payment today. Nevertheless, younger generations prefer other digital payment options, so a utility company needs to determine which ones will serve them best.
Bank transfer payments typically involve an ACH transfer where funds are taken from one person or entity’s bank account and deposited into the account of another person or entity, such as a utility company. Virtual card payments require the use of a token or randomly generated 16-digit number. This token is good for one-time use in the specified amount, and measures are put into place to prevent the payment from being decrypted. This process is referred to as payment tokenization.
Cross-border or FX payments serve as the fourth electronic payment option. Businesses use this option when they want to send and receive money internationally. They may use a forward contract, cross-currency transaction, or wire transfer when doing so. Utility companies rarely offer this option, as their customers tend to be local.
Benefits of Electronic Payments
Electronic payment systems come with numerous benefits. However, certain benefits stand out. Utility companies often offer digital bill payments for three reasons.
Lower Transaction Costs
Business owners frequently pay bills by check. However, doing so is a hassle for all parties involved. Businesses find collecting and processing paper checks takes time and money, and the average business spends approximately $5 for each check it accepts. Furthermore, the process takes time, which means the company must wait longer for its money. Some checks take two weeks or more to clear.
When a utility company switches to digital bill payments, the funds are easier to collect. As a result, the business spends less on payment processing. In addition, these bill payments come with more security features.
Utility providers find electronic payments serve as a more secure option than paper-based transactions. Electronic payment systems come with several ways of securing the payments, including encryption, payment tokenization, and more. While these systems remain vulnerable to security breaches, the providers do everything possible to secure a customer’s information. Utility companies appreciate the transparency associated with this payment option. By automating electronic payment processing, they control their outgoing cash flow while reducing errors. It becomes easier to identify and address any activity that appears suspicious or fraudulent.
Time and Resource Savings
Business owners find employees spend less time processing payments when a digital bill payment option is offered. Automating the accounts payable department can save a company up to 20 hours a month and allows employees to handle other tasks that benefit the organization. Valuable resources become available to assist in the completion of these tasks.
Utility companies typically face less competition than is seen in other industries. However, these providers must meet the needs of their customers. Offering digital bill payments serves as an excellent way to improve customer satisfaction and loyalty. Consider offering this option today.