
Ask HN: How do you pay your utility bills? - _megha_agarwal
Interested in learning how&#x2F;where individuals or businesses pay their essential monthly bills such as, Utilities, Rent, and Insurance?<p>1. How? Credit Card, Debit Card, Cash or Check. 
2. Where? Biller Website, Through your Bank Account or others?
3. What are your current pain points, and what improvements would you like to see?
4. Auto payments. Yay or Nay?<p>Especially interested in points 3 &amp; 4.
======
aveedibya
It varies by billers, and how much fee they charge on using cards. I prefer
autopay for billers on their website where I can add credit card and forget it
(for ex. telecom and internet bills). For others, such as electric or rent
bills, I prefer to pay using ACH but cannot schedule auto pay as I want to
make sure I have enough balance in my bank account before making a payment.
Plus, ACH has risks of NSF from both sides, which I don't like. I have tried
using my bank account to directly pay bills, but not super convenient.

~~~
_megha_agarwal
That's a good point you bring up! In this day and age, there is no reason, a
customer should have to pay overdraft fees. We always check our customer's
bank accounts to make sure they have enough money to make their payments, and
never make a charge if that is not the case. So we ensure there are no NSF
fees from our side or your bank's. Also, our customers can pay Rent using our
virtual credit line, so you won't have to worry about checking your bank
balance each time.

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timeinput
My preference is always auto pay, in preference order credit card, debit card,
ACH. I only allow ACH access for my mortgage. I tend to use the merchants site
to set it up, and allow them to draw. It would be nice if there was some kind
of reach back where I could de-authorize these things with out interacting
with each merchant.

~~~
_megha_agarwal
That's interesting, thanks for sharing! We're building Neon, a one-stop bill
pay solution for all your essential bills and hence, we're interested in
learning what else can be done to improve user experience. Would you think a
centralized dashboard where you can add your bills once, and then can control
such things (like payment methods or bank account), help? For some added
context, we provide a credit line at 0% APR and automate payments using that
credit line. We also consolidate all bills in a centralized location, on our
dashboard.

~~~
timeinput
The biggest reason I have my preference of CC first is points and to a lesser
degree consumer protection.

I'm guessing you couldn't let me use Amex as a middle man between me and your
service and not charge some fee, and I have a feeling I (personally) wouldn't
be all that interested as the overhead of bill payment isn't that high (for me
as just one person). Not to say it isn't an issue for some. I definitely know
it was when I was younger, but I'm not sure how much of that was how available
online payment was at the time.

~~~
_megha_agarwal
Got it! We are providing a virtual credit line that is used to directly make
payments on your behalf, so to answer your question - no you cannot use Amex
to pay us. Our customers pay us directly from their bank account, pretty much
the way they would pay for their other credit cards. We're different from
traditional cards though, because we offer a credit line at 0% APR and no fees
(overdraft fees, late fees etc.) and you can pay Rent using Neon (which is
otherwise not possible using traditional credit cards or there are high fees).
Besides, we do not charge any additional convenience or processing fees that
traditional card companies do. As far as the points go, we'll be launching
some features soon, that will far outweigh the returns you get from accruing
points on your cards. :) Keep an eye out on our website, if you'd like to
learn more: www.neonforlife.com

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chris-orgmenta
Hi Megha,

I manage Accounts Payable for clients.

>1\. How? Credit Card, Debit Card, Cash or Check.

EFT/Direct Debit > CC/DC manual/ACH/Wire Transfer > Check (US
only)/Paypal/other expensive payment platforms.

2\. Where? Biller Website, Through your Bank Account or others?

Automatic payments > Manual batches through accounting package > Manual
payment via phone/biller portal

3\. What are your current pain points, and what improvements would you like to
see?

\- Current clients: Biggest pain point is actually financial onboarding
suppliers, e.g. verifying bank details / setting up direct debit etc.

\- Current clients: Credit requests / getting suppliers to make changes to
their invoices can be laborious.

\- New Clients: Distributors such as Ingram Micro will place companies on stop
credit as soon as one bill is overdue - Which seems to catch a lot of orgs off
guard if they don't have a stable AP process in place.

\- New Clients: Three way match is rarely done.

\- New Clients: Often miss on-billing supplier costs. E.g. purchasing M365
licenses, provisioning them, paying them through AP, then forgetting to add
them to a client agreement for invoicing.

4\. Auto payments. Yay or Nay?

Absolutely Yay, but they should still undergo a three (actually five) way
match, and be 'approved' by the decision maker before being debited.

\---

I reviewed [https://www.neonforlife.com/](https://www.neonforlife.com/) &
[https://medium.com/neonfinancial/neon-whats-all-the-fuss-
abo...](https://medium.com/neonfinancial/neon-whats-all-the-fuss-about-) and
I'm wondering:

\- You are pivoting from b2c to both b2c & b2b? Seems sensible, I can't
imagine b2c being very lucrative.

\- For B2B, is it your 0% credit line that makes it worth using your dashboard
instead of Xero/QBO/etc.? Or are there other benefits?

\- How are you monetising this? You are shouldering such massive risk here,
surely you will get masses of late payments & defaults ...

I really like that your B2C offering can prevent 'charging poor people for
being poor'. Good on you

~~~
_megha_agarwal
Hi Chris!

Thanks for your detailed feedback. You have a ton of great insights on bills
that businesses pay. To answer your questions -

We started out, we intended to cover user's essential household bills only
(rent, and utilities). But we had some early adopters add their business bills
as well, and we decided we weren't going to turn them away. So as far as the
bills fall in these categories - Rent, Electricity, Internet, Telecom, Water,
Gas, Parking or HOA - we cover them both for businesses and consumers. We do
not cover the type of B2B bills that businesses need an accounting software
for. So we think, we can co-exist with the likes of QBO/Xero.

We don't think that the B2C side is not lucrative enough, given in the absence
of fair lending products users resort to Payday or other high cost loans. In
numbers, Payday Lending is a $90B industry and 70% of those funds are used to
cover a recurring household bill such as rent or utilities. That being said,
our current users are definitely not the ones who are desperate for cash or
just bad with finances (people often think that we’d be competing with the
likes of early-pay or cash advance apps). That’s not true. Our users are
actually fairly responsible and tech savvy. They might or might not have been
affected by the pandemic, and are actually using credit line at 0% APR to
spread out their bill payments but also, benefit from bill consolidation and
automatic payments. Solopreneurs, small business owners, white-collar workers
are the ones who are using us currently.

 _How are you monetising this?_ You are shouldering such massive risk here,
surely you will get masses of late payments & defaults ... We plan to monetize
from businesses. Mostly through partnerships or transaction fees on payments
processed through our platform. The intent is to look for value add services
for our users, for ex: some users want to know how their bill amounts compare
to others in the same area/demographics and get better deals. By showing
relevant deals and helping businesses gain customers, we can earn revenue.
However, these are just some preliminary ideas, we’re exploring.

 _As for the risk,_ we’re thinking about it differently. Rather than profiling
users as risky or not, we evaluate risk for transactions or payment types.
Surely, essential bills are always top of mind for individuals, and likelihood
on screwing those up is the least, even if you compare people across credit
scores. That doesn’t mean that people will not default - there will be
circumstances where people may not be able to pay even most essential ones,
however, we are hoping that (most) people can recover from those
circumstances. Our philosophy of avoiding interests and fees will keep overall
debt levels lower, and hence, reduce time in which they can recover.

We really appreciate your kind words. And yes, we’re not out there to exploit
people. We believe people are more good than evil, and wealth is not the best
way to judge a person’s willingness or ability to pay back. We just want to
build the right products and incentives to help them be more responsible.

