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Data for today’s episode is provided by Mercator Advisory Group’s Report: U.S. Bill Pay Market: Can Financial Institutions Win Back Payers?
The Preferred Payment Mechanism for Digital & Subscription Services:
- Card payments directly with the biller are by far the preferred payment mechanism for digital and subscription services.
- 50% of music streaming subscribers pay for the service with a debit card; 42% use a credit card.
- 42% of video streaming subscribers pay for the service with a credit card; 41% use a debit card.
- 60% of premium app subscribers pay using a debit card; 51% use a credit card.
- 56% of software subscription users pay using a credit card; 41% use a debit card.
- 47% of news or magazine subscribers use a credit card; 41% use a debit card.
About Report
Consumers’ demands and expectations for bill pay created the shift towards digital interfaces and also an expectation around a choice of payments and greater transparency regarding payment status. Their expectations are often better met through biller solutions, not banking platforms. With improved technology for financial institutions, there is an opportunity to bring consumer bill payers back and provide enhanced convenience through a single, consolidated tool, as covered in a new report from Mercator Advisory Group titled U.S. Bill Pay Market: Can Financial Institutions Win Back Payers?
”More modern options for bank bill pay that include better notifications and payment choice will help to bring consumers back to financial institutions’ bill pay platforms. Bill pay is a critical component to securing consumers’ preferred financial institution status. But I don’t expect that consumers will return to their financial institution to pay bills at same level experienced 10 to 15 years ago. Consumers have created the habit of paying directly with billers and the way that consumers establish services today, including the rise of the subscription model, supports more direct-to-biller activity,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.