Tink has published research that has found that during the cost-of-living crisis, there is substantial demand for greater flexibility on monthly payments.
Through talking to over 2,000 British consumers, the European Open Banking platform has revealed that amidst the ongoing economic strain, an estimated two thirds (66%) of UK consumers believe that utilities providers have a duty to support customers struggling to pay their bills.
Andrew Boyajian, VP of Product for Payments & CX at Tink, commented: “During the colder months, when energy and utility bills typically rise, consumers are under increasing financial strain – meaning growing demand for utilities providers to offer more support with managing their bills.”
Support from utility providers could come in several forms. Tink’s research found that one in five (18%) surveyed UK consumers are currently struggling to keep on top of changes in their regular payments, including increases in monthly utility bills, which isn’t helped by uncertainty around possible future energy cap rises.
Research found that Brits are struggling to pay for the rising costs, as nearly 18% of respondents faced bill defaults, entering debt collection processes, while another 21% forgot bills, incurring overdraft charges.
Taking on board these challenges that consumers face, the study indicates a desire among consumers for increased independence in managing monthly payments, with more than half of Brits (51%) expressing a preference for greater control over the timing and method of utility bill payments.
Tink, which is powered by Visa, believes that utility providers should use modern financial services to solve the issues that their customers are facing and believes that these problems create business opportunities.
Boyajian added: “With payment flexibility a particular sticking point, investing in data-driven financial services enables utilities providers to give customers greater control over their payments – which is especially important during difficult economic times.
With competition intensifying in the energy sector and consumers actively seeking the most favourable options, there arises an opening for utilities companies to enhance the payment process. Tink has explained that by aligning with consumers’ financial cycles, this enables utility providers to deliver a personalised experience.
With its research finding that about one in five (21%) consumers might switch providers for the flexibility to modify monthly payments, 17% considered switching for the option to change bill payment dates.
Tink also believes that Open Banking could be the answer to solve consumer problems as well as make providers’ businesses more efficient, which it also found in another research paper that was published last year about the cost-of-living crisis.
“Open banking solutions like VRP (Variable Recurring Payments) can help utilities providers offer support to customers struggling to stay on top of monthly outgoings, with features such as agreed maximum payment amounts and automated retries meaning both parties can have more peace of mind and the ability to adapt to changing circumstances,” concluded Boyajian.
“More flexible payment methods can also be powered by VRP, for example, an agreement with the utility provider to split bills into multiple payments.”
