What Today’s Client Payment Trends Mean for You
Think about the last time you made a purchase. Did you count out a handful of bills and coins? Fill out and tear a check from your checkbook? Reach for a card, and swipe or insert?
If you used a credit or debit card to pay, the latest research shows you’re in the majority. This overwhelming shift toward electronic payment methods has implications for how businesses like yours operate. Let’s dig into these payment trends in greater detail and look at what they mean for CPA firms now and in years to come.
Check use is declining, especially among young people
Even if you’re committed to checks as the way you want to get paid for your work, there will come a time in the not-too-distant future when the majority of your clients can no longer pay by check. Research shows paper check use is decidedly on the decline.
A survey by Fiserv found that more than half of consumers—55 percent—said they don’t use checks or rarely carry their checkbook with them. Research from GOBankingRates found that 38 percent of people say they never write checks, period. Twenty percent said they only write checks a few times a year. And among your youngest clients (and future clients), check writing is even rarer, with 61 percent of 18- to 24-year-olds saying they never write checks.
As Greg Litster, founder of SAFEChecks, told NPR, “The younger generation—the kids who are in high school, in college now—don’t even know how to write a check. It is quite remarkable, but it is a fact.”
Credit and debit are today’s preferred payment methods
As the digital revolution has taken hold, paper checks have been eclipsed by electronic payment methods, with credit and debit cards leading the pack. According to a survey by TSYS, 75 percent of people say they prefer to pay for things with a credit or debit card. More than half of those surveyed believe credit or debit is the safest payment type.
These trends don’t just describe everyday retail purchases; they also relate to how people prefer to pay bills today. Of households that have internet access, 74 percent report paying bills online. Research by Fiserv found 65 percent of people expect to be able to pay with a credit or debit card from a biller’s app or mobile website.
While you may think your firm has little in common with big influential technology brands like Apple and Amazon, the truth is your clients don’t distinguish between types of businesses when it comes to the level of service they expect to receive. In fact, 79 percent of people expect local service providers to offer the same payment options as large national companies.
Mobile payments and paperless billing are increasingly popular
With electronic payments comes the potential for greater flexibility and efficiency, which today’s clients demand. The ability to pay on the go from a smartphone or tablet is quickly becoming a must-offer client service, and the data shows that clients want this option. In one 2017 survey survey, 58 percent of respondents said they had paid a bill from their mobile phone in a given month. Sixty percent of people say paying from a mobile device increases their satisfaction with the biller, and is it any wonder? Mobile bill-pay options grant clients the control and convenience they’re asking for.
Speaking of convenience, who among us isn’t tired of sorting through piles of paper mail? As of 2016, the majority—56 percent—of all bills are now paid online, and 76 percent of consumers have switched to paperless billing. If your firm is still mailing out paper bills, consider whether your clients might find this a nuisance and would prefer to receive and pay your bill electronically.
What does this all mean for your business?
We’re steadily marching toward becoming a cashless society, and changing consumer payment trends have profound implications for how financial services professionals like you do business.
In some sectors of the modern economy, digital payments by credit and debit cards are old news, but many CPA firms have been resistant to adopting new billing and payments practices. Many like to wait for technologies to be fully vetted; others shy away from new business expenses like payment processing fees.
If your firm has yet to shift toward offering clients a variety of convenient online payment options, now is the time to reassess your practices. As you work to win new business and attract a younger clientele, keep in mind that prospective clients can easily seek out another CPA firm that provides them the convenience they’ve grown accustomed to from other businesses.
Best of all, digital billing and payments tools give you the opportunity to streamline and simplify key operational processes so you can devote more time to what matters—offering high-value accounting services to your clients.
To learn more about the payment trends influencing the way accounting professionals like you run their firms, download our e-book, "Getting Paid: What CPAs Need to Know for 2018."