Dive Brief:
- Friction can be a source of late payments. More than one-third of consumers say they have delayed making a payment because the process was too complicated, according to a survey of 2,000 U.S. consumers conducted by Datos Insights and commissioned by Solutions by Text.
- Among those who delay a payment, nearly half say they have missed the deadline as a result.
- When faced with multiple bills they can’t pay simultaneously, one-quarter of consumers say ease of payment is their primary factor when deciding which to pay first, and nearly half say that ease of payment is one of several deciding factors.
Dive Insight:
Many consumers feel stretched to pay every bill on time. The payment experience may be the deciding factor for which bills get handled first — and a poor experience can mean even customers with the means to pay fail to do so immediately.
Two in five consumers say there was at least one time in the past 12 months when they were unable to meet their financial obligations on time due to financial constraints, according to the survey.
Utility companies, credit card issues and others are all competing to be the company their customers choose to pay first, according to David Albertazzi, executive adviser for retail banking and payments at Datos Insights.
“The central premise of our research is that under these circumstances, the payment experience can influence where an organization sits in that consumer's payment queue,” Albertazzi said on a webinar Tuesday.
Friction is sometimes the deciding factor for customers choosing between which bill gets paid first, according to Patrick Reynolds, CMO at Solutions by Text. It can also be a significant barrier for customers who are otherwise capable of making a payment.
One source of friction is complexity, which is created when customers need to go through multiple smaller hurdles to make a payment, Reynolds said. Potential points of complexity include moving between channels, the need to remember login credentials, and the act of finding account details.
Two-third of consumers say they expect no more than three steps to stand between receiving a reminder and completing their payment, according to the survey. Examples of steps customers may need to take include registration, account authentication, website navigation and the need for repeated logins.
“The more effort required between receiving a reminder and making the payment, the more opportunities there are for a consumer to drop off, delay, or ultimately miss the payment altogether,” Reynolds told CX Dive in an email.
The goal for brands is to minimize the distance between a payment reminder and the payment itself, according to Reynolds. Best practices include minimizing logins and channel handoffs, as well as letting customers authenticate, pay and receive confirmation all from one interaction when possible.
When brands fail to offer simple payment options, their relationship with customers can suffer.
“A difficult payment experience can signal that a company isn’t designing around the customer, especially when consumers are accustomed to simple digital transactions elsewhere,” Reynolds said in an email. “Over time, repeatedly asking customers to navigate unnecessary steps or disconnected channels can make every interaction feel harder than it needs to be and weaken the overall customer experience.
