It is a safe assumption to say no one likes paying bills. In fact, it is a task that most people dread. As online payments continue to increase in all facets of our daily lives – a lot of companies have begun to offer automatic credit card billing options.
We noticed this feature missing from a lot of K-12 tuition solutions, and wanted to touch on some pros and cons of setting up autopay (part of our My Backpack offering) for schools and parents alike.
Benefits shared by parents and schools
One of the most obvious benefits of setting up automatic payments is time saved for both parties. Since you do not have to sit down and manually pay your bills each month, parents are saving the time it takes to sign in, enter their info, and make the actual payment.
Schools are then able to save time in reconciliation efforts – automatic payments mean on-time payments. This correlates to time saved chasing after late payments, possibly charging late-fees, and dealing with multiple headaches along the way.
Largest hidden benefit for schools
A huge pro that is not always apparent for schools right away – comes down to consolidation. A school is made up of multiple parent/payer segments: one-time payers (pay in full), two-time payers (halved payments i.e beginning of the year, middle or end of the year payments), 2+ payments, and delinquent payers (missed payment deadlines). The last group, creates multiple roadblocks for running your school efficiently. By trying to set up delinquent payers with an automatic payment plan that deducts directly from their bank account or credit card at the same time each month, the school is more likely to receive these payments on time.
Largest hidden benefit for parents
One of the largest benefits for parents, besides the obvious convenience factor, is that setting up auto-payments can help increase your credit score if you have the habit of occasionally paying your bills late. “By setting up automatic payments, your bills are paid on time, and you don’t miss any payments because you are traveling or forget,” says Beverly Harzog, an independent credit card expert and consumer advocate.
Another large benefit for parents if they are using credit cards for these automatic payments, is that these expenses that are recurring monthly will start to add points, cash back, or other benefits the payer has arranged with their credit card provider.
Missing out on automatic payments, means parents miss out on potential credit score increases and cash/point rewards. If your school wants any help adding autopay to your school software or boosting parent adoption rates – contact us at email@example.com.