The relationship between consumers and technology has strengthened, particularly over the last few years, and people now expect to manage more of their lives through digital platforms than ever before.
Making payments is no exception, and the demand for methods to align with today’s more digitally enabled world is evident. However, while the world of payments has changed dramatically, many billing processes remain outdated, inefficient and unclear. The way people pay their bills for instance has not kept pace with other types of payments.
This particular problem is being further exposed by the tough financial position many people are in as the cost of living squeeze tightens. More and more customers are struggling to pay their bills. In March 2022, we surveyed leaders from the UK’s utility providers and found that four out of five billers believe COVID-19 has exacerbated the challenges with bill collections, and this will only continue as the cost of living crisis deepens.
When asked about the biggest changes in customer behaviour following the pandemic, 67% of utility providers we spoke to said they had seen an increase in requests for bills to be paused or reduced and arrears to be reassessed.
Like other utility providers, telecom companies have a fundamental role to play in delivering high-quality services that are both resilient and affordable. They must seek to better engage consumers through greater flexibility in payment channels, as well as protect vulnerable customers by streamlining billing services.
When it comes to customer experience, the real value comes in integrating the personal touch and good communication into a secure environment. This must be embedded in functionality and flexibility, with added information about what the bill is all about, rather than just one line on the fixed amount to be paid. Greater predictability, flexibility and transparency will benefit everyone. Luckily, new innovations in the payments space are making these a reality.
Request to Pay: the future of billing
In 2020, the UK’s national retail payments operator, Pay.UK, created a new framework to enable more flexible, secure and customer-focused ways for bills to be settled between people, organisations and businesses.
Building on this critical framework, Mastercard’s Request to Pay service was the first of its kind in the UK to connect billers and customers directly to specifically facilitate the request for a payment and provide a secure communication channel to raise any questions or challenges the customer might have as part of the payment process.
The service can be integrated into an existing and trusted app, like that from a bank or utility provider, instead of requiring an external, less secure service like text or phone. We know from speaking with and surveying utility providers that this is critical. “Customer experience is super important to us,” said one. “The more of a customer journey we can manage, the better the opportunity to give excellent service and experience. That is at the heart of what we do and it makes it really easy to know what to do next because you’re thinking about what the customer needs and wants.”
Request to Pay has been designed to give choice and flexibility in how people pay their bills. Through it, customers can now choose to pay a bill straight away, defer, split a payment or query it. The service complements existing payments infrastructure, while improving communication and payment transparency. Despite it being a relatively new technology that is early in its rollout, a quarter of the utility providers we spoke to said that request to pay has huge potential over the next five years.
Billers benefit from a better ownership of customer relationships, which promotes an improved experience and increased retention. Payments are more easily traced, and knowing exactly when bills have been received and paid means it will be easier to identify those people who need help and additional support. It also improves reconciliation processes and gives businesses better transparency over cash flow.
By initiating a Request to Pay directly from within the service, billers can offer consumers not only a better level of service, but much greater security and reassurance over who they are speaking to, practically eliminating the risk of accidental payment misdirection and fraud.
At Mastercard, we want to play a pivotal role in providing people with safe, secure and convenient ways to pay. With our Request to Pay service, we can help do that, giving telecom providers and other billers a more effective and secure way of communicating with their customers, particularly during tough economic times when more people will be needing more support with their bill payments.