It’s no surprise that consumers don’t always read the fine print. In the case of consumers using a bill-pay portal, that means that they may not read the instructions that say they must enter their information exactly as it appears on the billing statement.
As a result, the payment that was meant to be processed electronically ends up dropping to paper.
“Customers are going on there and they’re entering whatever they feel is necessary, just assuming their payment’s going to make it to the right destination, not really caring whether it’s going electronic or paper,” Rebecca Anthony, business leader for Catch! at CheckAlt, told PYMNTS.
For the biller, a payment that drops to paper impacts cash flow as it is slower to post to the business account for reconciliation. For customers, it means that the payment takes longer to post. This leaves them wondering where their funds have gone, and unsure who to call to get an answer.
“It creates havoc all through the ecosystem,” Anthony said.
Making the Whole Process Easier
But billers that want to cut down on drops — or eliminate them — can do so in a few steps.
In order for electronic lockbox bill payments to flow electronically, they must match on three different criteria: the account masking, the alias and the address.
“The majority of the payments I look at that have been initiated as paper, they’re defaulting because that account number isn’t accurate,” Anthony said.
Often that’s because the biller has set up a profile wanting only five or six digits as the masking, Anthony said. If those profiles instead accepted “wildcard masking,” the payments would be able to process electronically.
Currently, billers are getting paper checks every month that have incorrect criteria and create a manual process for their staff. Staffers must look at the check, see that the client entered incorrect information and then note the true account number to which it should be applied.
Systems with integrated machine learning may send payments with an invalid account number to an exception queue to give the biller a chance to look at it and key in the correct account number through the portal. That way, there’s no paper check generated.
“There’s a better way to do it, and it’s going to increase that cash flow and make the whole process easier,” Anthony said.
Saving Money Across the Board
For billers still dealing with paper, Anthony suggested that they do two things to see the value of changing their processes.
First, look at their invoices to see what they are paying to process paper versus what they are paying for the electronic feed.
Second, look at the cost of having customer service representatives spending time handling calls from customers who are wondering why their payment hasn’t posted.
“I think it would save money across the board,” Anthony said of the benefits of replacing paper with electronic capabilities.
Together with that, there’s the issue of postal delays. Anthony reported that a client has received checks 14 to 21 days after the customer put them in the mail.
When billers have an electronic capability, they could receive payments within one to two business days.
“So, once again, I would kind of go back to these billers and I would challenge them to look at the dates on the check and realize how this could have been money in their pocket X amount of days ago had they had an electronic feed,” Anthony said.