Mobile Wallet Bill Pay Gains Popularity Despite Looming Fees
The use of mobile wallets for bill payments has surged among consumers, with convenience and speed driving adoption over traditional methods like paper checks. The growth is highlighted in the collaborative report «Digital Bill Payments: Frequent Mobile Wallet Bill Pay Users the Most Satisfied,» co-authored by PYMNTS and ACI Worldwide. Data from the report indicates an 11% increase in the usage of mobile wallet bill pay across demographics between Q3 2022 and Q1 2023.
A notable finding from the report is that 51% of consumers who opt for mobile wallet bill pay choose PayPal as their preferred platform. However, this convenience comes at a cost, as the majority of FinTech mobile wallets, including PayPal, charge fees for their bill pay services. Research detailed in the «Mobile Wallet Bill Pay» report unveils that 46% of users are subjected to flat fees, a percentage of the bill, or a combination of both when using PayPal for bill payments. This fee structure is consistent among various non-institutional mobile wallet bill pay services, with an average fee of $14.80 or 1.5% of the bill amount.
Interestingly, while nearly half of consumers are willing to bear the fees, the other half express their reluctance to use mobile wallets for bill payments if additional fees are involved. This juxtaposition between consumer interest in mobile wallet bill pay and their aversion to fees presents an opportunity for financial institutions to step in.
Sanjay Gupta, ACI Worldwide’s Executive Vice President of Digital Payments, highlighted this potential advantage for financial institutions over FinTechs. In an interview with PYMNTS’ Karen Webster, Gupta stated, «For the consumer using digital wallets to pay bills, it’s an opportunity to engage with the credit union or bank or utility company — and in the process, pay your bills.» He emphasized the peace of mind gained by consumers through this approach, ensuring timely payments for mortgages, utilities, and loans.
The surge in mobile wallet bill pay usage reflects a preference for convenience and speed, although the looming specter of fees poses a challenge for widespread adoption. Financial institutions have a unique opportunity to cater to fee-averse consumers by offering alternative solutions that combine the benefits of digital wallets with the reliability of established banking institutions.