Posted by Mark Brousseau
Rising payment processing costs may be catching up to utilities, if this week’s 13th Annual Utility Payment Conference hosted by Dominion at the Hilton Hotel in Richmond, VA, is any indication.
Historically, utility payments were among the easiest and cheapest to process, thanks in large part to the high number of full-pay transactions that included a remittance document with an OCR scan line. In fact, TAWPI’s 2009 Payments Benchmarking Survey showed that the average cost per paper-based remittance payment remained unchanged at $0.15 per item between 2005 and 2009. But the emergence of new payment channels, such as the Web and credit card, has disproportionately “taken out” so-called “clean” transactions, leaving utilities with more complex paper-based remittances. At the same time, utilities must cost-effectively manage this growing number of payment streams.
Not surprisingly, utilities in attendance at this week’s payments conference were keen on finding solutions that would consolidate both paper-based and electronic payment streams onto a single platform. Mario Villarreal, president and COO of US Dataworks, Inc. – an exhibitor at the event – can’t remember a time when utilities have shown as much interest in enterprise payments solutions.
This follows a trend I observed this summer at the Federation of Tax Administrators conference.
“The utility market is clearly thirsting for enterprise payments solutions that provide them with greater visibility, efficiency and consistency in their revenue management,” Villarreal explained.
For utilities, centralized processing is one of the key advantages of an enterprise payments approach. Villarreal says centralized payments processing is especially appealing to utilities that are expanding their geographic footprint; one utility he spoke with at the conference operates in 33 states. With an enterprise approach, utilities gain better visibility into their payments, regardless of their footprint.
Utilities see similar benefits to centralizing the archival of their payments images and data, he adds.
But vendors may be slow in getting the message, Villarreal added. “Most of the exhibitors at the conference are still taking a fragmented approach to automated utility payment processing.” The vast majority of the 38 exhibitors at the Payment Utility Conference strictly offer siloed solutions for payments applications such as remittance, cashiering, remote deposit capture or ACH processing.
In Villarreal’s eyes, that won’t solve the challenge utilities face in their payments operations.
“Until you consolidate systems and apply standard processes and controls across payment channels, you will always be saddled with inefficient and costly payments operations,” Villarreal concluded.
What do you think?
Showing posts with label utilities. Show all posts
Showing posts with label utilities. Show all posts
Friday, October 22, 2010
Thursday, April 30, 2009
e-Payments Deliver Cost Savings for Utilities
Posted by Mark Brousseau
Meter reading, billing and payments were the top opportunities for customer service cost savings identified by the 300 utilities surveyed by UtiliPoint International.
The interchange fees for utilities accepting credit card payments easily exceed $200 million annually, UtiliPoint International found. But the majority of utilities with more than 100,000 customers do not pay a dime of this $200 million in annual interchange fees because their customers are charged a small fee to offset interchange.
In addition to saving money on interchange fees, many utilities can also save money by sending their customers a bill that is easier to read, the survey found. More than 15 percent of calls into the call center are from customers who do not understand their bill. Clearly laying out the most important details of the bill (amount due, date due, account number) can reduce utilities call center expenses or allow current call center employees to work on other projects, notes UtiliPoint International.
What do you think? Post your comments below.
Meter reading, billing and payments were the top opportunities for customer service cost savings identified by the 300 utilities surveyed by UtiliPoint International.
The interchange fees for utilities accepting credit card payments easily exceed $200 million annually, UtiliPoint International found. But the majority of utilities with more than 100,000 customers do not pay a dime of this $200 million in annual interchange fees because their customers are charged a small fee to offset interchange.
In addition to saving money on interchange fees, many utilities can also save money by sending their customers a bill that is easier to read, the survey found. More than 15 percent of calls into the call center are from customers who do not understand their bill. Clearly laying out the most important details of the bill (amount due, date due, account number) can reduce utilities call center expenses or allow current call center employees to work on other projects, notes UtiliPoint International.
What do you think? Post your comments below.
Friday, March 27, 2009
95% of Utility Bills Still Sent Through Mail
Posted by Mark Brousseau
Utilities continue to incur high costs due to distributing 95 percent of their bills through the mail, according to Chartwell's survey of 94 utilities. Bills sent through the mail are more expensive than bills delivered electronically.
Some utilities have seen success in decreasing the percent of customers receiving paper bills. One utility with more than 300,000 customers enrolled about 20 percent of its customers in paperless billing through promotions on almost all of the material produced by the utility. This utility also incentivized employees to enroll customers. Another utility company, Arizona Public Service, donated $1 to the Tree Research and Educational Endowment every time one of their customers signed up for paperless billing over a three month time span. Arizona Public Service was able to switch almost 17,000 customers from high-cost paper bills to low-cost electronic bills.
While consumer marketing has been successful in decreasing paper bills mailed out, many utilities are looking to cut costs by delivering bills through secure email. In an effort to reduce the costs of distributing bills, 40 percent of utilities are planning to offer or are considering delivering bills through secure email, Chartwell says.
Utilities continue to incur high costs due to distributing 95 percent of their bills through the mail, according to Chartwell's survey of 94 utilities. Bills sent through the mail are more expensive than bills delivered electronically.
Some utilities have seen success in decreasing the percent of customers receiving paper bills. One utility with more than 300,000 customers enrolled about 20 percent of its customers in paperless billing through promotions on almost all of the material produced by the utility. This utility also incentivized employees to enroll customers. Another utility company, Arizona Public Service, donated $1 to the Tree Research and Educational Endowment every time one of their customers signed up for paperless billing over a three month time span. Arizona Public Service was able to switch almost 17,000 customers from high-cost paper bills to low-cost electronic bills.
While consumer marketing has been successful in decreasing paper bills mailed out, many utilities are looking to cut costs by delivering bills through secure email. In an effort to reduce the costs of distributing bills, 40 percent of utilities are planning to offer or are considering delivering bills through secure email, Chartwell says.
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