The Impossible Dream? Reducing Cost to Serve, Driving Adoption & Maximizing Service

One of the toughest challenges we face is balancing customer satisfaction with cost management. We’re under constant pressure to improve digital adoption while ensuring that it doesn’t come at the expense of operational efficiency.

At 2025 Xperience Live, Paymentus presented some valuable insights on how utilities can address this dilemma. With the right strategy, you can enhance the customer experience and reduce costs simultaneously. The best part? These changes don’t require overhauling your entire payment system—they’re small, practical steps that can unlock big results. Here’s how.

The Impossible Dream: Serving Everyone While Reducing Costs

How many times have you heard this from leadership: “We need 100% digital adoption, with no additional cost, and we need it to serve all of our customers.” While this goal sounds impossible, it’s important to acknowledge that it’s not about hitting a perfect target. It’s about making progress year over year and setting realistic goals. By making incremental adjustments and optimizing our payment models, we can come close to this “impossible dream.”

Paymentus emphasized that the key to achieving this is focusing on what’s achievable now, while continuing to move the needle forward. Instead of striving for perfection, let’s aim to meet more customers where they are, increasing adoption rates and driving down service costs in the process.

Digital Adoption: The Key to Reducing Costs

It’s no secret that digital payment adoption is essential. But it’s not just about moving customers to digital methods—it’s about giving them the flexibility to choose the method that suits them best. Paymentus highlighted the importance of inclusive payment models that cater to diverse customer needs.

For instance, 90% of Americans live within 10 miles of a Walmart, which means that in-store bill pay at retail locations is a convenient option for many customers​ By embracing PayPal, digital wallets, and scan-to-pay, utilities can offer more options without the need to overhaul their existing systems. The goal here is simple: increase adoption by removing barriers and offering choice.

The Power of User Fees: Turning Costs into Savings

One of the most practical takeaways from Paymentus was the idea of shifting certain costs to consumers through user-fee models—whether it’s a convenience fee, service fee, or surcharge. While it might seem counterintuitive to charge customers more, the reality is that these fees are widely accepted.

Here’s a simple formula for understanding potential savings:

If you’re a utility billing 50,000 accounts a month, with an average transaction cost of $2 per bill, you’re looking at $1.5 million in annual savings simply by passing those fees on to the end user.

Paymentus shared a simple formula to calculate how much a utility could save by shifting payment fees to consumers. For example, a utility with 50,000 accounts paying an average of $2 per transaction could save up to $1.5 million annually by passing these fees to the end user. These savings are significant, especially for utilities that are looking to optimize their operational budgets while still delivering top-tier customer service.

What’s more, utilities that have already made the switch to a user-fee model, like a large national utility, report huge savings—without sacrificing customer experience. With the right communications and education, customers are more than willing to adapt, leading to stronger digital adoption rates and reduced costs.​

The Importance of Education and Marketing for Adoption

A key insight shared by Paymentus was the importance of customer education. Simply put, your customers need to understand the value and convenience of the payment options you offer. Through marketing campaigns, utilities can inform customers about the available payment methods and encourage them to adopt digital channels.

Paymentus offers free, ready-made marketing assets—like social media banners, website banners, and bill inserts—to help utilities educate their customers. These assets are not just helpful for driving adoption; they’re also essential for making sure your customers know exactly how to take advantage of the tools available to them. Faster payments? More satisfied customers? These outcomes aren’t just possible—they’re inevitable when you invest in effective communication.

Simplifying Payments, Streamlining Costs

Reducing the cost to serve doesn’t mean compromising on customer experience. In fact, Paymentus showed how small adjustments—like outsourcing print costs, reducing call center expenses, and automating payment processing—can make a big difference to your bottom line. The focus is on optimizing your processes without sacrificing service quality.

For example, by leveraging e-billing, IVR systems, and chatbots, utilities can reduce the need for traditional, high-cost service channels. These solutions, in turn, create efficiencies that benefit both the utility and the customer. What’s more, regulatory compliance is integrated into these systems, reducing the complexity and cost associated with keeping up with the ever-changing landscape of PCI compliance and NACHA regulations​. 

Final Thoughts: A Future-Proof Strategy

The future of utility payments is digital, but it doesn't have to be all-or-nothing. Paymentus showed that using a multichannel strategy, inclusive payment options, and user-fee models can reduce costs and enhance customer experience. Consider what small changes your organization can make to cut costs and boost digital adoption. With the right approach, you can benefit both your customers and your budget.

Don’t miss out on the full presentation—watch the recording to see how small changes in payment models can lead to big savings and enhance your customer experience.

Sources:

• Datos Insights, How Americans Pay Their Bills, 2023 Report
• NPR.org, Why Many Business Owners Would Love It if You Stopped Using Your Credit Card, September 2023
• PYMNTS.com Survey, 2024​