Bypassing Fees and Intermediaries with Modern Payment Rails

Utilities are under pressure on all sides. Infrastructure upgrades, storm recovery, and rising wholesale power prices are squeezing budgets at the same time customers expect more flexible, digital payment options.

For many utilities, the default answer has been to lean on convenience fees. Passing card costs to customers can plug a budget gap in the short term, but it risks introducing an endless cycle of hiking fees.

Utilyze takes a different approach. Instead of debating whether to charge a fee, we focus on shrinking the underlying cost of all payments and the cost to serve each customer. That way utility clients can work with Utilyze to come up with the fairest per meter fee for everyone.

The Problem With Traditional Convenience Fees

Convenience fees were designed to cover the cost of taking cards and other “expensive” payment methods. When a customer pays a $150 bill with a credit card, the utility might pay 1.5% to 3.5% in processing fees, plus block fees that can add another fraction of a percent.

At scale, that adds up. UtilityDive estimates that roughly 42% of customers pay their utility bills with a card. For a mid-sized utility with 100,000 customers, card fees alone can run into the hundreds of thousands of dollars per year.

Passing these costs back to customers can help the budget, but it also:

• Discourages digital and self-service payments

• Feels like a penalty at a time of high bills

• Draws scrutiny from regulators and consumer advocates

The question is not just “Can we charge a fee?” but “Is there a smarter way to manage payment costs?”

Instant Payments: Pay Your Bill Online

Utilyze’s instant payments engine is built to reduce the cost of accepting money in the first place. Instead of relying only on traditional card rails, we support blockchain-based and open-banking style payments that can:

• Bypass some card network fees

• Shorten settlement times

• Reduce intermediaries between the customer and the utility

The customer experience stays simple. The same payment workflow can appear in web, mobile, IVR, and other channels. Behind the scenes, the utility can steer more payments to lower-cost rails without forcing customers to change how they pay.

For a 100,000-customer utility with an average $150 bill, where about 42% of payments are made by card, shaving just 0.5% off card costs can free up roughly $380,000 per year in processing expense.

IVR With LLMs: Pay Your Bill Over The Phone

Phone payments are still critical, especially for customers who prefer live help or do not have reliable internet access. The problem is cost. Industry estimates put the average cost of a live agent call at around $5.

If a 100,000-customer utility handles 60,000 agent-assisted payment calls per year, that is about $300,000 in call center spend just for taking payments.

Utilyze’s IVR uses large language models to let customers pay by phone without long menu trees or hold times. Callers can speak naturally, confirm their identity, and complete a payment in a few steps. Agents stay available for complex issues instead of routine payments.

If half of those 60,000 payment calls shift to Utilyze’s self-service IVR and portal, the utility can save roughly $150,000 per year while improving the experience for both customers and agents.

Smarter Payment Plans: Pay Your Overdue Balance

Traditional payment plans often exclude exactly the customers who need them most. Missed payments, NSF history, or large balances can trigger automatic denials, even when a structured plan would reduce long-term risk.

Utilyze lets utilities design payment plans around logic instead of rigid credit rules. Eligibility and plan terms can adapt to factors like income proxies, seasonality, and prior repayment behavior.

The scale of the problem is large. The National Energy Assistance Directors Association estimates that roughly 21 million households owe around $1,100 in utility debt. For a 100,000-customer utility, it is common for about one in six customers to be past due at any given time.

If Utilyze helps recover just 5% of those overdue balances, that can mean roughly $900,000 in additional annual revenue for that utility, while expanding eligibility and keeping more customers connected.

AI-Assisted Portal: Ask Our Chatbot About Your Account

Customers increasingly expect to solve billing questions and payment issues without waiting on hold. Utilyze’s AI-assisted portal provides a single place to:

• View current and past bills, payments, and balances

• Explore usage by day, week, or month with dynamic dashboards

• Enroll in budget billing or tailored installment plans

• Ask an AI assistant questions about charges, due dates, and options

This shifts routine “How much do I owe?” and “Can I get on a plan?” calls into self-service, which reduces call volumes and improves satisfaction. It also gives the utility better data on what customers are struggling with and where policies might need to change.

The ROI Of Smarter Payment Rails

Payment costs are not just about card fees. Overdrafts, NSF attempts, bad debt, and call center load all drain resources.

The Financial Health Network estimates that about 17% of U.S. households with checking accounts pay at least one overdraft or NSF fee annually, often around $20 per attempt. Each failed payment creates work for the utility and stress for the customer.

For a 100,000-customer utility, if Utilyze’s instant payments and open-banking connections reduce payment processing and NSF-related fees by just 10%, that can save more than $200,000 per year.

Combine that with approximately $380,000 in potential card-fee savings, $150,000 in avoided live-agent costs, and up to $900,000 in additional recovered revenue from smarter payment plans, and the business case becomes clear.

Even after accounting for software costs, many utilities can more than offset their spend while improving customer experience and reducing the need for blunt convenience fees.

Rethinking Convenience Fees With Utilyze

Convenience fees are a simple tool, but they are a blunt one. They shift cost onto customers instead of shrinking the cost to serve.

Utilyze gives utilities another path. By modernizing payment rails, automating phone and portal self-service, and widening access to thoughtful payment plans, utilities can control costs, recover more revenue, and treat customers more fairly.

If you are re-evaluating your convenience fee strategy, it may be time to look at the foundation instead of the fee. Reach out for a short demo or discovery call to see how Utilyze can help your team cut payment costs while building trust with the customers you serve.

Download our Payments Brochure for more information!