17 July 2019
How SMS payments help billers get paid early
Following the federal government’s proposed crackdown on late fees, companies may no longer be able to charge late fees to encourage prompt payment. Companies – particularly those in the utility sector where late payment is most common – will need other strategies to secure timely payment.
The problem of late payment is clearly significant. A third of the Australian population admits to missing the due date of their household bills, and research shows that $287 million was paid in late fees in a single year.
Part of the problem lies in customer unhappiness with current payment methods. Research conducted by MessageMedia shows that over a quarter of Australians (28 per cent) have gripes about the way they pay bills. More than half (53 per cent) of these customers find current methods frustrating or outdated: mail is misplaced or forgotten, and emails get lost in inboxes.
Alternatively, companies invest in an app for bill payments, but these are unlikely to be readily embraced by customers with ‘app fatigue’ leading to an overall decline in app adoption.
So, what can billers do to make the bill paying process so easy that customers pay on time?
SMS: Fast, easy and a 98 per cent open rate
No app is required, so there are no costly integrations, system upgrades or additional technologies needed for implementation.
Not surprisingly, utility companies are therefore looking to SMS payments as a viable solution that is easy to implement.
So easy that customers pay early
SMS bill payments are already performing in the market. FlickPay, a secure SMS payment solution where, once registered, customers can pay bills in two taps by replying “P” to a FlickPay SMS, is driving great results – and even getting customers to pay before their due date.
In a trial of FlickPay with Australian energy provider 1st Energy, the solution proved very popular with trial participants. Customer satisfaction – critical to the ongoing success of any payment solution – was extremely high, with 95 per cent of customers rating their satisfaction as 4/5 or 5/5.
As a result, 68 per cent of trial customers actually paid their bill 10 days earlier than the due date.
Adam Landry, Executive Director of 1st Energy, said; “The SMS trial was great. Customers were really engaged and to our delight rated the experience highly. Customers really appreciate the secure and straightforward user experience that FlickPay offers and it also reduces admin time for us”.
MessageMedia’s survey confirms that a third of participants (34%) would choose SMS for bill payments given the opportunity. Participants indicated that this method would “give them greater control of their finances” and “take the frustration out of paying my bills”.
Want better retention and less churn? SMS your customers
In a mobile-first landscape, it’s important that billers adapt to changing customer attitudes. Customers now want businesses to engage with them more via SMS. They carry their smartphone virtually 24/7 and already understand messaging functionality, so businesses that meet this preference will have a competitive edge.
Appealing to consumer preferences is vital to customer retention which, as we know, can be a significant challenge in the utilities industry. While average churn rate across industries in Australia is six to eight per cent, the churn rate for the utility industry sits well ahead at 20 to 25 per cent. Making bill payments simple and fast could be the difference that keeps your customers for longer.
For a utility company, solutions like MessageMedia’s FlickPay contribute to improving efficiency, retaining customers, and increasing revenue. An easy payment option that offers not only an excellent customer experience but also makes customers’ lives easier is a sure way to stay ahead in a changing market.
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