Payit by NatWest Research: Payment Friction Hurting Customer Experience for 23% of Utilities and Telecoms

Quick Summary

Payment issues are negatively impacting customer experience for 23% of utilities and telecoms firms, according to new research. By adopting Open Banking solutions, these providers can close the "data gap," reduce payment failures, and provide better support for vulnerable customers through real-time affordability insights and instant account-to-account transactions.

How Do Payment Issues Impact Utilities and Telecoms?

The research highlights that 99% of providers in the utilities and telecoms sectors face significant payment disruptions. These challenges are not merely back-office concerns; they are actively hurting customer experience and driving churn. Specifically, 50% of businesses report that payment delays act as a deterrent, leading to lost business, while 21% admit these frictions directly damage customer satisfaction and retention.

• 26% of firms suffer from persistent cashflow issues.
• 28% of businesses cite fraud and security as major concerns.
• 34% of providers struggle with late payments from customers.

By failing to modernize, firms are trapped in a cycle of outdated payment infrastructure that prevents them from meeting modern consumer demands for speed and transparency.

Why is the "Data Gap" a Risk for Service Providers?

A primary driver of these inefficiencies is the lack of access to consented financial data. This "data gap" prevents companies from making informed decisions regarding credit risk and affordability. Without real-time insights, providers struggle to offer tailored payment plans, which is essential for supporting vulnerable customer groups. Currently, 80% of companies believe syncing financial data with billing profiles would drastically improve their assessment processes.

Closing this gap through Open Banking solutions allows for a faster, more accurate assessment of a customer's financial health. This transition is critical as 42% of firms still rely on manual bank transfers, which lack the automated data-sharing capabilities needed to streamline the modern checkout journey.

How Can Open Banking Solutions Improve Customer Journeys?

Transitioning to Open Banking solutions offers a direct path to reducing friction. Unlike traditional card payments, which 43% of the sector still relies on, Open Banking enables instant account-to-account payments. This reduces the time spent managing customer information and significantly lowers payment failure rates. By leveraging real-time data, utilities can automate affordability checks, ensuring that payment plans are both sustainable for the customer and secure for the provider.

“Just as utilities and telecoms prioritise the bill-payer, Payit by NatWest is committed to a customer-centric approach to payments. We are always working on new ways to solve payment frictions for all parties involved in the transaction. We encourage companies to adopt Open Banking solutions to overcome traditional hurdles and eliminate inefficiency across the payment landscape.” said James Hodgson, CEO at Payit by NatWest.

FF NEWS TAKE:

This research confirms that Open Banking solutions are no longer a "nice-to-have" but a strategic necessity for high-volume sectors. For utilities and telecoms, where customer retention is paramount, the 23% reporting CX damage should be a wake-up call. Moving away from traditional bank transfers toward real-time, data-rich payments is the only way to bridge the affordability gap and secure long-term loyalty in a volatile economy.