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Lead Customers Down a Path of Paperless Billing and Payments

by John Schott, Chief Executive Officer, TWI

This article is a compilation of ideas and best practices as described in the White Paper: “12 Essentials for Successful Utility E-Billing/E-Payment Programs”, published on the Alliance for Innovation website.  

Despite significant investment, utilities still aren’t seeing the desired customer participation and savings from their electronic billing and payment initiatives. While the financial and telecommunication industries are seeing paperless billing adoption of well over 30%, utility companies have adoption rates of just 12%. It isn’t enough to invest in paperless billing and payments. Utilities must identify and address several core elements in order to gain greater adoption rates, streamlined operations, and improved cost-efficiencies.

Successful conversion from traditional billing and payments to a paperless, automated solution requires that utilities understand customers’ concerns (online registration hassles, password fatigue, fear of missing a bill or payment, security concerns, disjointed solutions) as well as their own (difficult and costly implementations, lack of cohesiveness between functions, inefficient customer communication, rising credit card fees, Payment Card Industry (PCI)-compliance requirements).

Regardless of the challenges, utilities must begin the transition to automated billing and payments or else they run the risk of losing money and harming customer relationships. Implement a feature-rich, secure, easy-to-use solution and utilities will instill customer confidence in the paperless experience.

Create a Convenient, User-friendly Solution; Gain Greater Customer Participation

People are busy and need a fast, easy way to make payments. Utility web sites often require customers to undergo a complex registration process.  It doesn’t have to be this way.  Though the ultimate goal is to get customers to embrace e-billing and other electronic services, utilities must ensure that customers can perform the most basic online services with ease in order to compel them to use e-billing and other electronic services.

The simplest first step in this process is to enable them to pay online without registering. A study identified that of customers presented with registration and non-registration payment options, 62% of them will opt for the non-registration quick payment. This telling statistic points to the fact that customers are: 1) often in a hurry and don’t want to spend the time registering; and 2) want to avoid the hassle of managing another password (known as “password fatigue”).

What utilities shouldn’t do is force their customers to contend with a clunky, time-consuming process. Instead, make it easy, quick and secure. The resulting positive payment experience will lead to a permanent online relationship with customers that will grow over time. If they enjoy their initial experience, they will return to the utility’s web site and most likely consider additional paperless and electronic services.

Moreover, customers like options and depending on their funds availability, can vary their payment methods from month to month (credit card via IVR one month, cash the next). If utilities can provide a wide variety of payment choices, including expedited payment options by phone/IVR, web, and mobile, then customers will be more inclined to use additional automated features like paperless billing and recurring payments.

An important step to fostering trust, and ultimately adoption, is more proactive customer notifications within the e-Bill/e-Pay solution. Customers worry that if they don’t receive a paper bill, they will forget to pay. Periodic electronic reminders prevent this issue, and customers have the option of paying electronically at the time of the reminder. By proactively delivering information to customers by phone, text, and email, they remain informed and in control of their billing and account status and feel reassured that they won’t miss a bill.

Overcome Implementation Obstacles

In the past, deploying a great solution was a challenge for utilities because of so many implementation obstacles. For many utilities, delivering an effective e-Bill/e-Pay solution is easier said than done. Excessive cost, complex integrations, Payment Card Industry (PCI) compliance, and multiple vendor issues make it tough.

Normally, each function – web portal and payment, IVR phone payment, outbound notifications, paperless billing, credit card processing – is handled by a different vendor; creating “silos” that operate independently rather than collectively, thereby increasing cost and limiting functionality. Consequently, the goal of implementing a seamless, secure, easy-to-use electronic billing and payment solution falls short; frustrating customers, creating more work for utility staff, and preventing utilities from converting customers. Finding a vendor that can deliver all the essential bill-pay components in a single, consistent solution is typically much more cost effective, and will improve customer adoption.

Another critical element of an effective solution is providing a consistent integration across all channels. An integrated data element supporting a secure, real-time exchange of customer information ensures that payments and balances post to the customer information system (CIS) the same way, regardless of whether the customer pays via the web, mobile, IVR, or in-person. Lack consistency in the experience and you’ll lose customer confidence. Real-time data solutions benefit customers and create a highly efficient back office with fewer manual processes and more simplified daily reconciliations.

Transactional pricing models may be a good option for utilities that lack funding but recognize the need to upgrade billing and payment functions, since they provide opportunities for utilities to add services with little to no up-front investment. The vendor is paid only for successful payments or e-billing transactions, which incentivizes the vendor to deliver a great solution that leads to wide adoption of electronic services.

Additionally, convenience fees must be considered carefully. Often these fees range from $1 to $5 and are charged to the customer for electronic transactions made by credit card or ACH. Theoretically, they should make money for the utility. However, studies have found that imposing convenience fees that are too high can have a detrimental impact on customer adoption. Too high and adoption rates will drop, customers will get frustrated, and utility company-customer relations will suffer. On the other hand, more modest or no convenience fees are preferred by the customer and will likely have a more positive impact on the utility’s bottom-line.

A final implementation obstacle is PCI compliance, which is an information security standard that organizations must meet when they handle cardholder information. It was created to regulate how cardholder data is used and stored to prevent exposure of credit card data to potential fraud. Since PCI-compliance can be expensive and challenging, fully outsourced, cloud-based payment solutions can help utilities dramatically minimize their compliance efforts.


Utility companies must pay close attention to customers’ billing and payment behaviors. With today’s billing and payments technologies, utilities have a myriad of opportunities to connect with, and influence, customers.

There are solutions that effectively address the above issues and they are attainable. Consider customers’ behaviors and find a vendor that can meet their needs as well as improve the utility’s efficiency and profitability. Do so, and your utility will be well positioned to change customer behavior and dramatically increase future adoption of paperless billing and electronic payments.    

John Schott is Chief Executive Officer of TWI, the leading provider of billing, payment, and communication solutions for billing organizations in North America. With over 500 customer implementations across the U.S. and Canada, the company has pioneered the way bills get paid. Its product suite, Summation360™, seamlessly integrates traditionally complex and costly billing and payments facets into a highly cost-effective, one-stop solution; revolutionizing the way clients — primarily utility companies — track customer consumption, invoice, send out notifications, process payments, and permanently eliminate the cost and burden of manual activities. For more information, please visit

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