Posted by NationalACH on Aug 06, 2010

Utility Companies Move to Electronic Payments

Electronic payment processing is continuing to expand within utility companies as more consumers are paying bills electronically rather than writing paper checks. 

ACH payments have long been popular for utility bill payments.  ACH is a low cost method of accepting payments for utility companies.  

Credit cards and debit cards are now increasingly popular as well.  The credit card companies have special rates for utility bill payments.  For example, new rates on utility payments would generate a flat $1.50 in interchange for a $200 transaction.  This replaced the old rates where the same payment would have cost $4.74.

Acquiring banks, who pay interchange to the issuing banks, decide whether or not to pass savings on to their utility clients. Acquirers serving utilities make recommendations about what electronic transactions work best for utility companies.  But, of course, the acquirers are most interested in their own profit margins.

Recurring Billing with ACH

Utility companies are the perfect application for recurring billing.  Customers pay utility bills monthly. Electronic payments are processed faster than paper checks.

Millions of Americans already pay utility bills through ACH recurring payments. Processing fees for ACH are significantly lower for ACH payments than for cards.  


Whether it’s a one-time payment or recurring, consumers are very comfortable paying utility bills with ACH.  Utility companies can accept payments online, over the phone, at walk-in bill-pay centers, or via written authorization for recurring billing for ACH.

For more information, contact