Cost savings for consumers and providers
For energy and utilities providers, open banking payments could support significant operational efficiencies. By streamlining the collection process, companies may receive payments faster and potentially save on card processing fees. This efficiency could help to reduce manual errors and operational costs and speed up administrative handling, as well as improving cash flow.
Case study: FlexiPay solution uses VRPs to offer flexible bill payments
Payments-as-a-service company, Ordo, recently partnered with digital transformation company, Eviden to offer an alternative way for organisations, including utilities providers, to collect customer payments.
The FlexiPay solution combines Ordo’s variable recurring payments (VRPs) and account information services with Eviden’s artificial intelligence (AI) notifications platform to provide a flexible alternative to Direct Debit and card-on-file instructions for bill payments.
It enables flexibility on the amount and frequency of payments to cover a bill, suiting a customer's finances, rather than a set amount on a regular fixed date.
Helping vulnerable customers
FlexiPay allows a business or organisation, such as a utilities company, to identify vulnerable customers and provide flexibility on when and how they pay their bills. Instead of relying on a single payment, on a specified date, for example a Direct Debit, flexible payments make it easier for customers to pay their bills.
The system monitors customers’ finances via a consented process and can make recommendations for one or multiple payments. Each month, FlexiPay will suggest realistic amounts to pay to help the customer make their required payments.
Fliss Berridge,
Ordo Director
“One of the key advantages of FlexiPay is that it can help customers to keep their bill payments on track, and even prompt them to change their payment habits.
Eviden’s recommendations platform encourages customers to make the effort to pay, in part or in full.
It can also spot those who are financially vulnerable, those who are in hardship and even who may be about to enter hardship. It triages and recommends practical next steps, followed up by the appropriate team.”
Multiple payments when in funds
She added: “It can also help avoid arrears by allowing multiple payments when customers have funds to do so. Generally, customers who are offered payment flexibility will try to pay something towards their bill, rather than nothing, and offering the option to pay a bill in instalments helps to avoid arrears.”
Lower cost-per-transaction
For energy firms, open banking-powered solutions such as these typically offer a lower cost-per-transaction to process than cards - automatic reconciliation to accounts (reducing administration costs), lower costs when compared with chasing failed Direct Debits, and a smoother customer experience.
James Sharpe, Sales Director Digital Native Business, Eviden, said: “FlexiPay plays its part in the payments mix for utilities firms, and offers a credible alternative to Direct Debit and Standard Credit, especially for customers who are nervous of potentially large hikes via monthly Direct Debits.”
He added: “Direct Debit is considered a convenient payment solution for utilities. However, it can be troublesome for those consumers who find it difficult to make a single payment from a single account once a month, or even simply don’t trust Direct Debit. Standard credit or pre-payment meters often attract significant costs to transact, along with costs to reconcile.”
Different income profiles
James continued: “FlexiPay is a consumer-friendly, intelligent recommendation engine that understands the diverse needs of consumers. For example, individuals working in the gig economy are often paid weekly or fortnightly and those on zero hours contracts often have different income and outgoing profiles each month, so single payments can be a challenge.”
Solutions such as FlexiPay, which understand a customer’s specific financial situation and makes payment recommendations accordingly – whether smaller or larger, or more frequent – put customers back in control of their bill payments. They also support firms’ ability to bill and collect efficiently. This is a win-win for firms and consumers.
