Where Payment Friction Hides (and How to Fix It)

Anyone who runs a business knows one simple truth: they can’t survive unless their customers pay them. And while it’s easy to view these payment interactions purely as transactions, they really shouldn’t be. They’re some of the most consistent touchpoints customers have with a utility or biller. 

And while they’re often treated as routine by both sides, in reality, they’re anything but. Done right, these moments can quietly build trust, and create a more meaningful connection.

As part of our ongoing series based on our ebook, Rethinking Routine, we’re exploring how organizations like yours can transform everyday billing and payment interactions into meaningful customer experiences. In earlier posts, we unpacked The Hidden Cost of Transactional Thinking and explored 5 Ways to Modernize Your Bill for Better CX to build trust and clarity.

This time, we’re turning our attention to the payment experience itself. Just as the bill can be redesigned to foster trust, the way customers pay is equally ripe for strengthening connection, loyalty, and the overall experience.

The Myth of the “Late Payer”

When we hear the term 'late payer,' many of us jump to the conclusion that a customer can’t pay their bill. 

Myth: Late payers don’t care or can’t pay their bill.

Reality: Many customers can pay but hit avoidable barriers that prevent them from doing so.

In fact, this often isn’t really a customer problem at all. It’s actually a design problem. A PayNearMe survey found that 19% of consumers said they were late paying a bill online because the process was too complicated, and that figure jumps to 38% among consumers aged 30–44. 

These are customers who are trying to do the right thing. But when the experience is clunky, confusing, or time-consuming, even the best intentions stall out, leading to late fees, frustration, and strained relationships.

Where Payment Friction Hides

Do you know what one of the biggest contributors to payment friction is? A one-size-fits-all approach to payment experiences. Because we know, one size never fits all, even in payments!

Here are some common places friction hides:

1. Inconsistent access: Instead of delivering consistent options, offerings vary by customer type, service territory, enrollment status, or channel (e.g., web, IVR, or agent), creating an uneven, often confusing customer experience.

2. Channel constraints: Certain customer segments, like those who are unbanked or underbanked, often have no choice but to pay in person at locations and times that may not be convenient for them.

3. Household reality mismatch: Designed for single-family households, many systems fall short for shared living situations where residents want to split bills, schedule partial payments, or coordinate responsibilities.

4. Timing mismatch: One of the big contributors to late payments is bill due dates that don’t align with pay cycles. For those living paycheck to paycheck, this alignment is critical, though many billers don’t offer the option to adjust due dates.

5. Digital experience gaps: Non-intuitive navigation, too many steps, unclear confirmations, password issues, and poor mobile UX create unnecessary friction, helping explain why 27% of customers say non–user-friendly biller websites make paying bills more difficult.

Friction isn’t a single multiplier. It compounds, increasing its impact over time. For instance, a confusing bill + limited payment options + no payment reminder = a support call that costs your organization money. Nobody wins in that equation.

The Power of Choice

Vanilla or vanilla is never going to be the antidote to friction because some people like mint chocolate chip, and there’s a rumour out there that some people don’t even like ice cream! The true antidote to friction is, of course, choice. Choice in how they’re billed, when, and how they pay. 

Choice in how they're billed

What works for one customer doesn’t necessarily work for the next, which is why it’s critical to offer flexible billing options. Things like budget billing, levelized plans that smooth out seasonal spikes, and paperless delivery that offer greater convenience.

Giving customers the ability to choose billing options not only makes things easier for them, but it also creates consistency. When there are no surprises, customers feel more confident, which improves payment behavior and strengthens long-term trust.

Choice in when they pay

Not everyone gets paid on the same schedule, and billing should reflect that. Custom due dates allow customers to align bill due dates with payday. With cash flow in place, customers are more likely to pay in full and on time.

For those under financial pressure, installment plans turn intimidating balances into manageable amounts and remove the all-or-nothing pressure of a single due date. Scheduled payments are another way to reduce the pressure of remembering due dates and the risk of missed deadlines. 

Flexibility shifts payment from a recurring penalty risk to a manageable routine.

Choice in how they pay

For a long time, customers could only pay their bills with cash or a check. Today’s payment landscape has turned up the pressure for you to offer digital wallets, pay-by-text, and mobile apps, while not overlooking customers who still prefer, or have no choice but to, pay in cash, because there are a lot of them.

The 2023 FDIC National Survey found that 4.2% or about 5.6 million U.S. households were unbanked (no access to a bank account), while 14.2% or 19 million households were underbanked (have a bank account but rely on alternative services). Among unbanked households, 66.2% rely entirely on cash, while the rest use prepaid cards or nonbank online payment services, underscoring why cash acceptance and parity of experience matter.

Regardless of how they pay, all of your customers expect their experiences to be as easy as paying for their morning coffee or a rideshare.

Awareness Is Half the Battle

Some of you have gone to the trouble of expanding your payment options, but your customers just don’t know they exist. Our recent Digital Wallets Research found that 52% of customers don't know if their utility offers digital wallets! If you’ve invested in flexible payment options but don't communicate them, you’re leaving value on the table. Payment options are only valuable to customers if they know they exist.

To ensure this doesn’t happen, you need to take another step and educate your customers about the payment channels available to them across all of your communication channels.

Here’s a practical communication plan to get your organization started.

Where to promote your payment options

• Bills (print + digital)
• Payment page
• Login dashboard
• IVR
• Call center scripts
• SMS/email reminders
• Outage/alerts pages
• Onboarding/welcome emails

How to talk about payment options

• Use plain language: “Pay with Apple Pay/Google Pay.”
• Lead with benefits: “Pay in seconds.”
• Add helpful context: “Having trouble paying? Explore payment plans.”

When to promote payment options

• At bill issuance
• Pre-due reminders
• Past-due nudges
• Moments of friction (e.g., failed payment, password reset, returned payment)

From Transactions To Trust

We’re at a point now where payment flexibility is table stakes, and this is definitely a positive shift. When customers can choose how, when, and where they pay, the experience stops feeling like a chore and starts feeling manageable.

Reducing friction, expanding choice, and clearly communicating options don’t just improve payment rates—they build trust. And trust is what turns routine interactions into lasting relationships.