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An extensive study into the habits of consumer bill payers has revealed evidence confirming that consumers are increasingly turning to expedited payments to pay their many bills as close to the actual due date as possible, and they have no variety of preferences for making those payments. Because many consumers feel compelled to make a rush payment, many billers should be developing strategies and capabilities for "expedited payments." An expedited payment option allows remittances to be sent more quickly, making it likely that payments are posted faster and potential problems are avoided such as delinquency or adverse credit reports.

These are some of the pivotal findings of Fort Knox National Company's second annual Bill Payments and Expedited Payments Survey consumer preference study. Fort Knox National Company, a leading provider of electronic payment, solutions performed this research with the intention of identifying motivations and trends in consumer payment behaviors and how companies can develop strategies supporting their overall profitability and customer relationships.

Consumer Preferene Survey Results
Because of the increasing pressure of their monthly billing cycles, many consumers feel the need to make a rush payment. The average household pays fourteen bills spread out over the course of a month and payment dates are not convenient to the consumer's bill pay habits or cash flow. The sheer volume and frequency of bills can be difficult to manage for any consumer. Cash flow is a significant factor of increasing importance in the timing of payments. According to the study, 54 percent of consumers cited cash flow concerns compared to 48 percent last year.

Organizational challenges combined with cash flow issues leave many consumers needing to make last-minute payments to avoid late payment penalties. Many billers, including banks, are developing strategies and capabilities to better serve these customers. The study divulged a number of explanations for the consumer trend toward utilizing expedited payments to pay billers directly. Avoiding "late fees" was again the top overall reason cited for using expedited payments, increasing from 64 percent to 72 percent year-over-year. Consumers also indicated a strong desire to preserve credit ratings. Another significant point brought to view by the study was the high percentage of consumers indicating that they are willing to pay a convenience fee of $1.00 to $5.00 in order to avoid a late fee or any potential negative impact to their credit rating. The survey findings also demonstrate that a majority of consumers are more comfortable using technology to make their expedited payments. While most customers still prefer the phone (44 percent) for these payments, the percentage citing a preference for the Internet increased from 31 percent to 40 percent.

A New Line of Business: The Extended Grace Period Via Expedited Payments
Following these consumer preference indicators, billers should be motivated to provide the option of expedited payments. Financial institutions are making tentative efforts to establish a foothold in this market, but billers of all types often fall short of meeting all of the consumers' needs for expedited payments. The increasing numbers of consumers who feel the need to make rush bill payments are driving many billers to develop strategies and expand capabilities for expedited payments.