When it comes to monthly financial planning, paying bills takes up a huge portion of the pie for an average household. Digital payments across the world are on a growth trajectory but a large percentage of payments across countries still rely on legacy billing processes. It can be said that for many billers 70% of the bill payment process is electronic or automated but it is the pending 30% non-digital processes that use up almost 90% of the costs reserved for the entire bill payment segment in an organisation.

The events of 2020 have significantly accelerated digital trends for the global billing and payments sector. While people grew hesitant to handle cash, bills and even envelopes; billers worked hard on cost reductions while maintaining business processes with work from home mandates. The need of the hour was to find data transfer channels through the siloed systems and connecting disjointed and broken processes to ensure business continuity.

A series of innovations are seen across the world as organisations and their end customers are now primed for quick digital adoption, a habit that will continue even after we emerge from the crisis. Especially when it comes to bills and payments, there is a need for a digital ecosystem or an exchange where various apps, services and portals create a connected network between billers and payers. A network that provides channels for smooth transfer of data and information between the old and the new infrastructures.

The payment process fragmentation

Often the processes to send bills and collect payments are fractured and lack universal adoption. A bill can be sent digitally or via paper. It can be paid by the payer via a bank portal, biller portal, cheque or a different payment methods. Each mode of payment takes a different route and goes through different systems. Visibility, transparency, and data are lost during these handoffs from one system to another. Any slip ups cause delays that require cost and labour-intensive means to be resolved. It’s these broken processes that demand a high-price in every sense from all the involved stakeholders - billers, payers and the payment channels.

The billers have to bear the cost of paper bills, follow ups, lack of cash flow visibility and they have minimal control over pre-delinquency collections. The disjointed processes also mean that matching and reconciliation is challenging. For the payers too, the entire bill payment process can be fraught with bad experiences that cost time, effort and at times money. The need for a well-connected, digitally robust system is clear and present.

A digital ecosystem linked by the messaging network.

Messaging service solutions, (such as Request to Pay), are defining the way forward to create an interconnected ecosystem of payers, billers and payment service providers. These secure messaging rails run across the network and enable transfer of structured data (invoices, messages etc.) while connecting legacy systems with the new ones.

In such a digital ecosystem, payers can find all their billers on one platform or via an app avoiding the need to create multiple accounts to make bill payments. Billers, in turn, can send invoices directly to individuals via the messaging service or even initiate conversations. The ability to interact opens possibilities for the biller to ensure timely payments without the cost of paper trails, and the payers get better view and control over their finances.

Take an example of a telecom service provider. Today if a customer misses a payment, the telecom provider disconnects the service and initiates a collections process. The biller might get paid but may lose a customer. In a connected ecosystem that uses a messaging service, the biller potentially has multiple choices; send reminders to avoid late payments, offer payment plans to those with financial shortfall or connect unhappy customers to customer care.

Exela Technologies’ infrastructure for Exchange for Bills and Payments ecosystem is in place, along with the roadmap to continue adding features for value added services such as messaging portals, integration with our factoring and dynamic discounting platforms, ERP integration studios, loyalty programs and more.

Changing the bill payments landscape

New technological innovations have a way of transforming the landscape. When digital wallets made an appearance, it gave rise to mobile first unicorns such as Uber; when connected ecosystems for bill and payments are fully functional and widely adopted, it is possible we see new innovations that disrupt the bill presentment and payments market. The value of transactional data is ever increasing as we keep realizing new ways to use its potential. In a connected ecosystem for bill and payments, the data and the collective intelligence can shape a new generation of services and solutions.

Digitisation and digital transformation are inevitable, and it is the new solutions and innovations that speed up the digital adoption.  It’s been a slow march trying to move away from paper bills, cheques and cash but connected ecosystems such as Exchange for Bills and Payments pave the way forward for greater acceptance and push towards digital transformation.