Long gone are the days where the only way people could pay their bills were through the mail via check or by heading to various companies’ physical locations to make a bill payment using cash. These days, there are eight predominant ways that customers are paying their bills, and a research survey conducted by the Synergistics Research Corporation of over a thousand homes in the United States offers some interesting insight into the way people are taking care of their financial lives nowadays.
Online Bill Payment
Sitting at 37 percent of the bills paid, online bill payment through a computer makes up the largest portion of how people are paying their bills. And, this figure is growing at a rate of a little more than 70 percent every few years, it should not be much longer before online bill payment takes up more than half of the entire bill payment market. Regarding the study, this is for people who are using their personal computers to go to the utility or debtor’s website and submitting a payment through that.
Bill Payment by Check
The traditional method for paying our bills, paper checks are started to dwindle in the amount of people who are using them to make their payments. At the time of the Synergistics study, paper checks made up a still-sizable 22 percent of how people are paying their bills. However, with the proliferation of online bill payment and some of the other methods we will be discussing, it is safe to assume that paying bills by check will continue to see smaller and smaller rates of usage.
Automatic withdrawals are when those looking to pay their bills set it up so companies can use the customer’s banking information to pull the funds out themselves. This requires that the bill payer supplies her or his checking or savings account number as well as their bank’s routing number. According to the survey, 10 percent of those asked make their payments using this method.
Bill Pay via Card (Debit or Credit)
When debit and credit cards as a bill payment method are combined with each other in the idea that they are both cards being used, they together make up 16 percent of the bills being paid. Individually, however, these break down into 9 percent of bills being paid using debit cards and seven percent of them getting covered by people using their credit cards.
As a bill payment site that promotes financial responsibility, we would like to take a brief moment and mention that we strongly discourage that anyone pay their bills using a credit card. When you pay any of your bills using credit, you just end up transferring the money owed to an account that will now accrue interest.
Paying Bills with Cash
Paying bills with cash makes up 8 percent of the way people make payments on the money that they owe. Since mailing cash through the mail is highly discouraged, this means that the large majority of this eight percent are actually taking the time to drive down to their local utility or service office and make the payment in person.
Bill Payments by Smartphone or Tablet
Together, bill payments using Android and Apple phones and tablets take up 8 percent of the bill payment market, but this number is only expected to rise over the coming years and exponentially so. In fact, there is a possibility that mobile devices and tablets will quickly surpass check payments within the next five years, and there’s even a small chance that it will become the majority choice. Individually, mobile bill payment is 5 percent of the way payments get made and tablets make up 3 percent of the total. It should also be pointed out that e-readers are included in the tablet category.
Our Projections on Future Bill Payment Breakdown
As you may have noticed through the rest of this article, we have a strung hunch on bill payment methods being done mostly through online methods like through a computer, smartphone or tablet. However, this is more than just an assumption: each of these methods has seen a huge increase over the last couple of years with growth rates between 70 and 130 percent for computer payments and mobile payments, respectively.
By no means should this be taken as an assumption that check payments will be going anywhere anytime soon, but as more and more youth enter the workforce and begin taking up more financial responsibility, they will sway the numbers further toward online payments. This, combined with more adults taking up digital payments means online, whether through PC, mobile or tablet, will comprise nearly 60 percent of the total market by 2020. .
What about you? Do you pay your bills online or are you a fan of sending in checks or money orders to the people you owe money to? Or, are you a part of the shrinking minority and make payments using cash or credit cards? Let us know in the comments below.