Did you know that each Starbucks store offers almost 70 different types of beverages? Order a Blended Crème Frappucino at a Starbucks and don’t be surprised if they ask if you want to make that a Double Chocolate Chip, a Tazo Green Tea, a Strawberries-and-Crème, or one of five other types of Blended Crème Frappucino. It’s all about choices, and where there is consumer demand, there are bound to be options.

Consumers today are bombarded with numerous choices when shopping for, and we have to admit that it has become a way of life. It is not surprising, therefore, that consumers not only demand a range of products and services, but also a variety of options when it comes time to pay the bill. They are also looking for convenient options to make payments, as well as control over the frequency and timing of the transactions.

These three aspects – choice, convenience and control – are driving the dramatic shift in consumer behavior from paper payment options to electronic mechanisms. Most traditional billers are underserving the needs of their consumers. PayStream measures this with a metric we call the Payment QuotientTM.

The changing dynamics of consumer preferences have created a distinct opportunity for consumer biller organizations (utilities, credit card and telecom companies etc.) to optimize the way they collect funds. However, the decision to offer a variety of payment options is not as simple as it seems. Each additional payment type and channel offered by billers might result in improved customer satisfaction, but will also lead to increased costs and management issues. The PayStream Payment QuotientTM measures how effectively the biller is satisfying the needs of the consumers. This satisfaction index is divided by the costs of maintaining all the payment channels (Agent, IVR, Web etc) and payment types (Check, Card or Cash).

Billers are taking a serious look at automation solutions based on their potential to satisfy their customers’ desire for simplicity and flexibility throughout the billing and payment process. The goal is to satisfy consumers’ appetites, without leaving billers with any heartburn. In short, maximize functionality at an acceptable cost. A well-thought-out consumer payments automation strategy can benefit both billers and consumers by allowing billers to collect funds more quickly and cheaply, and by offering consumers more options as to when and how they pay.

Download PayStream’s complimentary Technology Insight Series Report, Consumer Payment Automation: Paper or Plastic?

Last 5 posts by Sushmitha Koka

• Supercharge your Technology Selection Process with Help from PayStream - January 24th, 2008
• Consumer Electronic Bill Payments - Choice, Convenience and Control: What's your Payment Quotient? - October 29th, 2007
• Consumer Electronic Bill Payments: DOs and DON'Ts - October 29th, 2007
• Business Process Outsourcing as a Sign of Growth: Is that an Oxymoron? - September 29th, 2007
• Electronic Procurement: New Hope Beyond the Hype - September 7th, 2007

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