Bob’s Ramble: One Positive from Covid

One positive from Covid-19 – It’s Accelerating the Digital Transformation

In 1974, people carried dimes to make calls from payphones. I was one of them. I also regularly checked the coin return slot on payphones to see if any change was left behind. NOT something we would consider today, eh?

A lot has changed, and surprisingly, Covid-19 is helping to drive the next revolution: rapid digitization of billing and payments.

It started in 1968, when a group of California bankers became concerned with the growing volume of paper checks. They feared it could outpace the technology and equipment used to clear those checks. So, they formed the Special Committee on Paperless Entries, or SCOPE.

From this group, the Automated Clearing House (ACH) was conceived and began allowing electronic deposits of checks. The US Air Force was the first employer to deposit directly but other government agencies soon began to provide it as an option. By the late 1970s, the Social Security Administration (SSA) started to encourage direct deposit with television commercials.

In the 1980s and 1990s, the nation’s employers (and payroll companies) seemed to simultaneously realize that direct deposit was less expensive, safer, quicker and easier than issuing and sending paper checks. The race was on and even those older folks accepting payments from SSA enrolled in droves to receive direct deposits. It didn’t take long before the vast majority of wages were paid through direct deposit.

So why are we still sending out paper bills and processing paper checks?

Because we (the collective we) haven’t set ourselves to drive change to the billing and payment dynamic…yet. But with Covid-19, people don’t want to deal with mail, paper, check processing, people coming into pay, etc.

Let’s consider life in 20 years. How many paper bills and paper checks do you think we will be sending and receiving? Probably less than 1%. So why wait 20 years to get there? Why not lower costs, be gentler on our environment and increase efficiency now?

We have a commercial client that decided they would get out of the paper business many years ago with their 28,000 customers. “If you want a bill,” they said, “you can receive it by email and SMS text. If you want to pay the bill, it must be paid online, through AutoPay or via computer or mobile device.” They explained to customers, “If you want to send a paper check, we will have to charge you a $25 processing fee because we don’t support that type of payment. If you want us to send you a paper bill, we will have to charge you a $25 fee because we don’t support that type of billing.” They believed that paperless billing and payment was safer, cleaner, less expensive, and easier for customers – just like direct deposit. For the past decade, this client has had over 99% online payments and over 99% paperless billing – without issue. Safety nets are in place for “bounced” emails and account changes through their Electronic Bill Presentment and Payment partner, Invoice Cloud (shameless commercial, sorry).

We believe it’s the perfect timeframe to initiate the next big wave of digital billing and payments and we are working on the marketing program to help our clients drive to 100% paperless billing with 100% online payments. We think of it as Biller Utopia. Please let us know if you are interested in joining us on this journey! There are many ways to get there and we probably don’t need to “charge” customers for not adopting paperless to convince the vast majority to enroll.

BTW, here’s a commercial from the 1970s pushing direct deposit for SSA. https://www.youtube.com/watch?v=zkhnyBccJQA&feature=emb_title