Despite major advancements in digital payment services and widespread mobile access — according to the Pew Research Center, 98% of Americans own a cell phone and 91% own a smartphone — many organizations still struggle with sluggish adoption of their online payment systems.
Why? Because while the technology may be in place, new research shows critical user experience and engagement gaps remain.
The 2026 State of Online Payments report sheds light on what’s holding customers back from fully embracing digital bill payment — and what billers can do to overcome those hurdles. Whether you’re in utilities, insurance, or government, tackling these three major adoption barriers can drive better performance from your bill payment platform and unlock stronger digital engagement.
Barrier 1: Complex or Inconvenient Payment Processes
Simplicity drives success for any online payment platform. Yet for many users, limited options and clunky workflows are deterring digital engagement.
1-in-3 survey respondents that avoid digital payment channels do so because the available options are limited, inconvenient, or difficult to use. Service providers can encourage self-service (and, as a result, save time and resources for their organization) by simply providing the payment channels that are in-demand and ensuring they are easy to find and use.
Unfortunately, even customers that are actively using digital payment channels encounter issues somewhat regularly. 1 in 4 respondents must look up their login info each time they pay a bill, and another 22% cite lack of payment reminders as a major hurdle for getting payments in on-time. These are fixable friction points.
Improving your digital bill payment experience with guest checkout, automated recurring billing, and integrated payment reminders — especially via mobile-optimized links or text-to-pay options — can significantly reduce abandonment. A mobile-friendly utility bill payment system that offers card, ACH, and digital wallet support also ensures flexibility across payer preferences.
Barrier 2: Lack of Proactive Communication and Support
Even when customers are willing to pay online, forgetfulness is a major barrier for collecting regularly, timely payments. The data shows 22% of respondents say a lack of payment reminders is their biggest challenge, making it the most cited issue for those already using a digital bill payment platform.
That friction leads to missed or delayed payments — not because users resist paying online, but because they’re not prompted at the right time or through the right channels.
To address this, organizations must leverage automated payment reminders that are timely, personalized, mobile-optimized, and link directly to the payment screen. Features like calendar invites, text-to-pay options, and branded email reminders reduce drop-off and reinforce digital payment habits.
This is especially important when we factor in that 1-in-4 Americans take a reactive approach to bill payment, paying only when they remember or they’re reminded by their service provider. Investing in intelligent reminder systems is a low-effort, high-impact way to increase digital engagement, especially for more reactive payers who don’t follow a set schedule.
Barrier 3: Access, Security Concerns, and Preference Slow Paperless Billing
Another key opportunity to save billing teams time (and take a chunk out of your paper budget in the process) is promoting paperless billing. While e-billing adoption continues to grow, a sizable segment of consumers still resist going paperless — and it’s leaving a lot on the table for service providers.
According to the 2026 State of Online Payments report, 65% of consumers receive at least half of their bills electronically, and 7% have not taken any action toward going paperless. Among those who haven’t fully enrolled, the reasons are surprisingly addressable:
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35% say they prefer receiving a paper bill
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23% say there’s no option to enroll
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19% have security concerns about storing financial information online
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12% say they’re simply unsure how to enroll
These findings highlight both awareness and experience gaps. Many consumers are still unclear on how to switch to digital billing, or don’t feel confident doing so. Others simply value the perceived control and reliability of paper documents — especially among older and lower-income demographics.
To drive enrollment, billing organizations must demystify the process. Offer clear, easy-to-follow instructions at the point of payment. Reinforce the safety of digital records and emphasize the practical benefits: faster access, reduced clutter, and fewer late fees.
Promoting environmental benefits can also help. Paper reduction was cited by 20% of respondents as a reason they pay digitally — double the previous year’s figure. Framing paperless billing as both a convenience and a contribution to sustainability can help convert reluctant payers.
2026 Customer Payment Preferences: Everything You Need to Know
Optimizing your billing and payment experience isn’t just about adding features — it’s about knocking down barriers to easily receiving funds. Whether you’re focused on property tax payments, online utility bill payment, or insurance online payment, addressing these challenges can help convert hesitant customers into loyal digital adopters in 2026.
Get your free copy of the 2026 State of Online Payments report to see all the insights you’ll need for meeting your goals in the New Year, from which channels are must-have (and which need to be phased out), to when your customers are paying bills, how you can encourage a surge of AutoPay enrollment, and beyond.
