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Bill Payment

What is a bill payment service?

Bill payment services are typically offered by check cashers, payday lenders, and grocery stores. The service is provided either in person or through self-service kiosks that look similar to ATM machines, but allow consumers to pay bills to local and national service providers. Most kiosks accept cash or stored value cards (payroll cards, government benefit cards or prepaid debit cards). The merchant acts as a payment agent.

Who uses bill payment services?

Individuals without a formal banking relationship often rely on bill payment services to pay utility bills, rent and other recurring bills. Individuals who have had problems managing a checking account may rely on bill payment services. Individuals who need to make a time-sensitive payment in order to avoid a late fee are apt to use a walk-in service

Why should credit unions care?

The National Consumer Law Center reports that one in four utility payments are made in person. Further, in-person bill payment is growing at an annual rate of five percent as more households feel the effects of a poor economy and leave traditional checking accounts or delay paying bills as long as possible. In 2009, Wal-mart announced bill payment services were available at any of its 3,755 stores using various payment options. The fee for a standard three business day delivery is $0.88; for a next-day payment, it’s $1.88; and to avoid a late fee or disconnection of service, customers can use express bill payment starting at $4.50.

What can credit unions do?

Walk-in bill payment services can allow a credit union to offer a valuable service to unbanked and under-banked individuals. Wal-mart reports that a large segment of Americans who make less than $45,000 a year are apt to pay their bills in person or through a third-party collector. Credit unions can use walk-in bill payment services as a means to enhance member relationships and serve the community, as well.

REAL Solutions would love to hear from any credit union offering walk-in bill payment services. We would like to feature your program on the REAL Solutions Impact Center so other credit unions can learn from your experience. Please contact Jeff Purvis at jpurvis@ncuf.coop or 800-356-9655, Ext. 6284.

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