The bill payments market is changing, which presents both challenges and opportunities for Post Office. Here we look at customer expectations and how this affects you.
The changing market
38.8 billion payments were made in the UK in 2017, 15% of which were regular bills and commitments. The bill payments market is changing as more customers choose to pay bills online, but many customers still need the option of being able to go into a branch and pay a bill in person for a variety of reasons – something we’ll be looking more at over the coming weeks.
The wider payments market is also changing thanks to advances in technology which continue to play a key role in how people choose to pay. More people are now choosing contactless, particularly using methods like Apple Pay, but the future of payments could include things like iris reading, facial recognition and even fingertip microchips.
A cashless society?
Towards the end of 2017, debit cards overtook cash for the first time as the most frequently used payment method in the UK. However, although cash payments decreased, it was still used for over a third of all payments and the second most frequently used payment method.
The trend suggests that there will be fewer cash payments in the future, but a cash-free society is very unlikely anytime soon. Cash will continue to be a valued and preferred payment method for many. Bill payments is also an area where customers are more likely to choose to use cash in order to more carefully track how much money is coming in and going out of their account.
What do customers want?
Unsurprisingly, younger customers tend to use mobile payments a lot more frequently than the older generation. But increasingly, what customers expect is options: they want to be able to choose whether they pay using contactless on their mobile or with cash. And for those paying important bills, the element of choice matters all the more.
For many, paying in cash over the counter provides a greater sense of control, particularly for customers on a tight budget and needing to closely monitor money going in and out of their account.
The opportunity for Post Office
Post Office has a huge opportunity here. Many customers enjoy the personal connection involved when paying over-the-counter, as well as the sense of security that comes with the interaction with a person. Our acquisition of Payzone means both networks together have 25,000 locations to pay their bills. And this bigger network puts us in a stronger position to win new, bigger bill payment contracts, and we will keep you updated on this.
The market may be changing, but there are still 500 million over-the-counter bill payment transactions a year across the UK. We want to make sure we continue to be there for all of our customers for all the services they might need.