The Shift to Contactless In-Person Bill Pay
As 2021 progressively gets “back to normal” and society is opening up, many Americans continue experiencing challenges like finding new employment, bills piling up, being at risk of eviction or foreclosure, and lacking access to some services. COVID continues pushing technological advancements that are changing the way we buy products and services, but some Americans are being left “in the dust” based on personal financial situations.
Roughly 25% of Americans are considered cash-preferred, relying on cold hard cash as their primary method of choice when making purchases (Barry, 2019). Consider services like streaming, online shopping, grocery pickup or delivery, and food delivery; cash-preferred consumers lack access to a bank account or credit card to enjoy these services. These disparities are apparent in the seemingly essential utility industry, as a large base of customers prefer paying their bills in person. For large investor-owned utilities, retail networks of authorized pay locations is a marquee component in the industry, but the pandemic is shaping a new era for utilities and how they serve their in-person paying customers.
The Retail Shift to Self-Service
Traditional bill pay platforms for over-the-counter (OTC) transactions are limiting hours and closing counters. There is now a significant trend toward self-serve payment options, particularly for cash-payers, to combat the COVID closures and scaled-back schedules for these services. Like many industries, there is a shift in the in-person bill pay space, as traditional OTC providers partner with self-service kiosk providers like U.S. Payments (USP) and retailers opt to move to a contactless option to serve customers’ bill pay needs. USP’s PaySite® kiosk satisfies the buzz of ‘contactless’ tech and touts sophisticated payment processing with a simple-to-use customer experience. Just like the grocery shift to self-checkout, retailers have a unique opportunity to automate financial services they offer like bill pay and enhance their services for customers.
But Isn’t Cash Going Away?
Au contraire, mon frère. The Federal Reserve is planning a significant increase in bill printing. The fiscal year “2021 print order of 7.6 to 9.6 billion notes is an increase of 1.7 to 3.8 billion notes, or 30.6% to 65.9%, from the final FY 2020 order” (Board of governors of the Federal reserve system, 2021). This planned increase is influenced by the fact that “the demand for U.S. currency rose nearly $1 trillion in 2020 from $1.8 trillion to $2.07 trillion” (Torry, 2021). According to the FED, the 2021 print order is “heavily influenced by the COVID-19 pandemic, as the Federal Reserve has experienced unprecedented demand for currency” (Board of governors of the Federal reserve system). Although businesses continue investing in digital payments, throughout the pandemic, “cash Americans have on hand nearly doubled from pre-pandemic levels” (Delouya, 2020).
Moratoriums are Ending. Here Comes the Cash.
Adding to the many ails pertinent to the pandemic, “twenty-nine to forty-three percent of renter households could be at risk of eviction by the end of the year” (30-40 million people in America could be evicted from their homes by the end of 2020, 2020). Additionally, “an estimated $35-$40 Billion is the current figure for electric utility arrearages” (Customer Survey on Utility Debt, 2021). As moratoriums come to an end, many utilities provide payment arrangement options for customers who heavily rely upon in-person pay methods to settle their debt with the power company. Additionally, this cohort of Americans are much more likely to be classified as cash-preferred, thus increasing the demand for locations offering cash payments. With the impending increase in payment volume and the decrease in over-the-counter locations and availability, there is a glaring disparity many of these Americans are experiencing. Across the nation. Utilities, retailers, and software providers are moving to self-service solutions like PaySite®, to prepare for the influx.
Band it Up
Even as the pandemic winds down, there is still a significant cohort of consumers that utilize cash to pay their utility bills. Consumers are carrying more cash, more Americans are at risk of falling into the cash-preferred demographic, utility moratoriums are ending, and traditional over the counter bill pay is less accessible. This recipe is propelling the industry to change course and implement self-service in person payment options like PaySite®. Retailers can mitigate long lines and implement another contactless service in the store. Utilities enjoy increased availability for customers and more accurate settlement and reporting. Lastly, customers appreciate the enhanced convenience. Like many industries experiencing a tech leap in response to COVID, the adoption scale of self-service bill pay is on the rise.
- Cash is Here to Stay
- Closing the Gap on Tech Disparities for Cash-Preferred Customers
- Coronavirus Relief Fund Extension for Local Governments
- The New Normal
- Purchase Bill Pay Kiosks with Funds from the CARES Act
30-40 million people in America could be evicted from their homes by the end of 2020. (2020, August 07). Retrieved May 11, 2021, from https://nlihc.org/news/30-40-million-people-america-could-be-evicted-their-homes-end-2020
Barry, E. (2019, March 09). 25% of US households are Either unbanked or underbanked. Retrieved May 11, 2021, from https://www.cnbc.com/2019/03/08/25percent-of-us-households-are-either-unbanked-or-underbanked.html
Board of governors of the Federal reserve system. (n.d.). Retrieved May 11, 2021, from https://www.federalreserve.gov/paymentsystems/coin_currency_orders.htm
Customer Survey on Utility Debt (pp. 1-92, Rep.). (n.d.). DEFG.
Delouya, S. (2020, October 08). Consumers’ ‘savings buffer’ accumulated during pandemic could help aid the economy without stimulus. Retrieved May 11, 2021, from https://www.cnbc.com/2020/10/08/consumers-savings-buffer-accumulated-during-pandemic-could-help-aid-the-economy-without-stimulus.html
Torry, H. (2021, January 31). Don’t bank on covid-19 killing off cash just yet. Retrieved May 11, 2021, from https://www.wsj.com/articles/dont-bank-on-covid-19-killing-off-cash-just-yet-11612105200