Langley Federal Credit Union is developing one such product that will encourage customers to stick with online banking even more: bill payments.
Once customers have linked their bills to their bank, it becomes difficult to walk away from their institution due to the convenience. But banks could miss out on this prime opportunity. A November 2021 report on bill payments by Eight-Novarica Group found that the number of bills paid through banks fell 2.9% year-on-year between 2016 and 2020, regardless of channel. The total number of unpaid invoices increased.
“Consumers’ expectation of a seamless, one-click bill payment experience is better met by Biller’s solution than FI’s solution,” the report reads. “This reality has caused bank bill payment solutions to steadily lose ground to the direct biller solutions for which the Aite-Novarica Group is tracking the market.”
Based in Newport News, Virginia, Langley will be the first financial institution to go live with a payments center called the Bill Center when it launches service on August 29. Bill Center was launched after Payments Holdings, a cloud-based bill payment technology company. Acquisition of e-invoicing and payments provider Payveris in 2021. It is a tool that resides in a financial institution’s digital banking system and allows customers to consolidate, view, manage and pay their bills in one place. It offers a variety of payment options, including cards that are not affiliated with any financial institution. Payment is made in real-time to billers who accept card payments and the user immediately receives a confirmation number from the biller.
Analysts at Eight-Novarica Group say the power of this card is paramount, as people go straight to billers’ websites to use their preferred card for payments, allowing them to make last-minute payments and get credit can receive in your account in real time. accounts.
Kevin Farnsworth, director of digital banking at the $4.5 billion credit union, believes some of the features of the new bill-paying feature are distinctive: the ability for customers to make real-time payments with debit or credit cards, payments through a Wide biller network connectivity, giving customers the ability to make most or all electronic payments in one place, and flexible payment options.
“I know other providers are working on real-time payments, including our current one, but Payveris is way ahead of anyone I’ve spoken to,” Farnsworth said.
With BillCenter, financial institutions can adopt a variety of payment methods and channels, including any credit or debit card (not just a financial institution branded one), ACH, digital wallets, and PayPal. Langley is still debating whether to limit card use to its family of credit and debit cards or let customers choose their preferred card.
Upgrading online bill payment to improve the digital experience was part of Langley’s overall agenda. When Farnsworth told management that 50,000 online banking customers were paying bills out of 175,000 online banking users, the response was, “‘I would have thought there were more,'” he said.
It is important to connect customers to multiple products in online banking. “They’re not going to leave your online banking, which means they’re not going to leave your financial institution,” Farnsworth said. “Bill payment should be very high” in the list of most attractive features.
At a recent meeting with his user group for credit union members using digital services, Farnsworth unveiled the ability to pay bills through a digital wallet. “It was one of the most exciting things about the lesson I spent with him,” he said.
Although Langley is the first customer, Paveris reports that half a dozen banks and credit unions have signed up.
Another benefit for financial institutions is the wealth of data that comes from learning more about a customer’s financial obligations, said Marcel King, chief innovation officer at Paveris.
“They can use it to sell other services more relevant to them, or act as a proxy for credit bureaus to understand consumer payments and behavior,” he explained. “If you know their bills and due dates, you can see what their financial health is like.”
Farnsworth will also launch a payment product called Loan Payments later this year, which Paveris will make available to its customers. Like Bill Center, this product connects to the core of the financial institution and enables real-time loan payments. Loan Payments expands the methods borrowers can use to make their payments, especially if their primary banking relationship is elsewhere, including ACH, debit cards, digital wallets, and cash payments at Walmart. Channels through which customers can pay include mobile, SMS, interactive voice, e-statement, PayPal and Amazon Alexa.
Langley lets borrowers repay their loans with any debit or credit card, ACH, and check. Improving this experience is important to Langley as it has an active indirect auto loan business.
“It’s extremely important for these members to have multiple options for paying off their auto loans,” Farnsworth said. “It’s important to us to make this a great experience so they can open a checking account here or get their next loan here.”