Why are Billers Absorbing Fees?
Absorbing online payment fees has become an increasingly popular trend with billing organizations nationwide. The COVID-19 pandemic and the financial strain this global health emergency continues to put on customers has inspired many billers to absorb the fees associated with online payments, both to help alleviate financial burden and to make contact-free payments as accessible as possible.
However, this trend has been underway for some time – long before COVID shaped our “new normal.”
Absorbing fees is one small way many billing organizations have responded to the growing customer demand for frictionless online payment experiences. To provide a frictionless online payment experience, your organization must minimize the barriers involved in the checkout process for payers. Tangibly, billers can create a frictionless experience by offering a streamlined checkout process that eliminates or cuts down on the steps needed to make a purchase.
While COVID-19 certainly accelerated the need for these easy, frictionless payments, absorbing online fees is certainly one trend that will continue to draw focus throughout 2021 and beyond.
What does it mean to absorb fees?
Essentially, fee absorption happens when a billing organization covers the fee that customers might typically have to pay to make online payments.
How does absorbing fees benefit billing organizations?
Beyond the gesture to help customers during this difficult time, absorbing fees can help increase online payment adoption for your organization. According to a recent Invoice Cloud survey, service fees have played a role in discouraging some customers from making payments online.
In our research report, The State of Online Payments, we discovered that 13% of respondents (payers) opt not to make online payments, just to avoid service fees. That means there could be a sizeable group of your customers avoiding your online payment platform simply to dodge a fee. By eliminating that fee (and sharing that your organization is absorbing the fee for customers) you may be able to draw in more online payments – and that spike in adoption can have a major positive impact on your organization.
For example, increased online adoption means less time your staff needs to spend fielding calls to answer payment questions, mailing paper bills, and processing paper checks. Ultimately, this saves organizational funds associated with those manual processes and saves valuable time for your staff, allowing them to turn their focus to other areas of need.
Not to mention that by providing that frictionless experience payers now expect, you’re likely to see higher rates of customer satisfaction as a result.
By the end of 2020, 17% of Invoice Cloud clients who chose to try fee absorption decided to continue absorbing fees, indefinitely. Several of those clients noted that their reason for continuing to absorb fees came from the amount of time their teams saved from the spike of online payment adoption.
Want to learn more about how your organization can absorb fees or the positive experiences other clients have seen from this change? Please reach out to client services at helpdesk@invoicecloud.net.