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Results of charging a convenience fee

As more utilities join the trend of charging a convenience fee for online payments, they are likely to see the number of customers paying online decline. If your utility is fortunate, these customers will opt for paying by bank draft. But if not, they will likely use their bank’s online banking to pay their bill.

Many customers, when paying via their bank’s website, assume you will receive their payment immediately, not realizing that paying through their bank’s website is very different from paying on your website. What many customers fail to realize is that their bank will mail a paper check to your utility rather than process an electronic transaction.

Most banks don’t print their own online banking checks, instead opting to outsource it to one of a handful of companies. These companies then print and mail the all-too-familiar self-sealing checks that your office receives. Unfortunately, this process can take a week or more from the time your customer initiates payment to when your office receives the check.

There’s a better option

Fortunately, there are payment consolidation vendors that expedite this process by intercepting payments from the check processors before they print paper checks. They then deposit the funds into your account and provide a file to import into your billing software.

Below are some reasons why using a payment consolidator is a great idea.

Improved cash flow

Rather than waiting a week or more after your customer initiates payment to receive a check, you receive the funds much faster.

Reduced staff time

Instead of having to take the time to open these checks (remember, they are mailed as self-sealing checks, which requires opening each one by hand), your staff only has to import a file with the payment information.

As an added benefit, if your customer entered their account number incorrectly when establishing your utility as a payee, the payment will fail during the import process. Once your office staff determines the correct account number, most of these vendors have a process to remap the invalid account number to the correct one for future imports.

Better customer relations

Because you receive the payments much faster, customers who delay in paying are less likely to be charged a late fee or be disconnected for non-payment. resulting in fewer angry calls to your office.

Are you interested in receiving online banking checks electronically?

If you are still receiving online banking checks as paper checks, please give me a call at 919-673-4050 or email me at gary@utilityinformationpipeline.com to learn how to remedy the situation.

© 2026 Gary Sanders