Posted by NationalACH on Jan 28, 2010

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, MasterCard’s latest schedule 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.

Acquirers, 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 unity companies. But, of course, the acquirers are most interested in their own profit margins.

Utility companies would prefer that consumers set up recurring payment models. Recurring payments are quite common for ACH payments. But, credit and debit cards still are generally initiated for one-time payments. Card transactions are most often paid directly on the biller’s websites or over the phone.

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