Billing used to be where the customer relationship ended for the month. The service was delivered, the invoice went out, the payment came in, and the provider moved on.
For years, insurers and other service providers treated billing and payments as administrative infrastructure. It was something important, yet expensive and largely invisible unless something went wrong.
A clunky payment experience may not look like a product problem at first glance. Unless, of course, you’re the customer.
“Service providers are no longer comparing themselves to their peers,” Rob Eberly, vice president of Insurance Practice at Paymentus, told PYMNTS in an interview. “Their customers are comparing their experience with their provider to an Amazon– or Uber-like experience that’s fast, that’s frictionless, that’s dynamic.”
The shift is turning billing and payments into part of the broader service-commerce model, a strategic commitment to optimizing the end-to-end billing and payments experience to drive retention and build long-term relationships. The bill is no longer only a request for money. It is where convenience, trust, frustration, lapse risk, payment choice and brand perception collide.
In many ways, it is a test that much of the insurance and service provider landscape is failing.
“For as much as our service providers and our carriers want it to be about where they prefer to interact with their customers, it’s really about where their customers want to interact with them,” Eberly said.
The Back Office Is Moving to the Customer Experience Layer
In product commerce, companies optimize every stage of the customer journey, from discovery and purchase to fulfillment, loyalty and returns.
Service commerce should be viewed the same way, Eberly said. Acquisition, service delivery, customer support, billing, payments, troubleshooting, offers and incentives all shape the customer relationship. If those functions are disconnected, the provider may still collect revenue, but at a higher cost and with greater friction.
“In a connected commerce environment, every touchpoint has the opportunity to be optimized,” Eberly said.
Billing and payments are one of the few recurring moments when a customer actively engages with an insurer or service provider. A confusing or rigid billing and payment experience can push customers into call centers, delay payments or create frustration that weakens loyalty. A more flexible experience can increase self-service, accelerate collections and reduce the cost to serve.
“If I can pay the way that I want to pay through the channel through which I want to interact with my provider, that drives a positive customer experience for me,” Eberly said. “I’m less likely to leave, I’m a happier customer.”
Providers investing in better billing and payment experiences are typically focused on a few outcomes, including increasing self-service, expanding customer engagement channels, supporting preferred payment methods and improving satisfaction, Eberly said.
Payment Choice Becomes a Cost to Serve, Plus Cash Flow Strategy
Personalized billing options are often framed as a customer experience upgrade. However, they also directly affect cash flow, Eberly said. A customer may prefer PayPal because they know their login or have money in their balance. Another may need to pay in cash. For insurers, cash can be operationally burdensome, but a connected payment model can best address customer needs efficiently.
“There’s a subset of customers that have a need to pay with cash,” Eberly said. “As opposed to making that a burden on their operations, why not simply send them to Walmart or their preferred retail location to make a payment and have it posted to their system in real time?”
The same logic applies to reminders through text, chat or other engagement channels. Each option may look incremental on its own. Together, they create a billing ecosystem built around customer behavior rather than provider preference.
So, why aren’t insurers and service providers fully on board with customer-driven billing and payment strategies? One obstacle is the belief that billing modernization must wait for a core system upgrade or broader digital transformation.
“A billing and payments modernization exercise doesn’t need to be at the end of that,” Eberly said. “It can happen in parallel.”
The distinction is important in insurance, where core transformations can take years. If billing improvements are delayed until those projects are complete, providers risk allowing customer expectations to move faster than their operating models.
Providers should also avoid judging today’s implementation timelines by legacy technology experiences, Eberly said.
“Technology is much more nimble, so we can deploy change faster for our billers,” he said.
The larger issue is future readiness. Payments behavior will keep changing, and service providers need systems that can adapt as new channels, payment types and customer expectations emerge.
“If I’m investing in a payment modernization project, I’m doing so certainly to become caught up to speed for what’s out there today,” Eberly said. “But I want to make sure that I’m with a provider that is setting me up to leverage innovation for today, next month, next year, five, 10 years down the road.”
Watch the full PYMNTS TV interview with Rob Eberly, vice president of the Paymentus insurance practice, to hear more about:
- Why billing is becoming a retention lever, not just a payment function. Eberly said customers now compare insurers and service providers with Amazon- and Uber-like digital experiences, making fast, flexible billing and payments part of the brand relationship.
- How connected billing can lower cost to serve. More self-service, fewer call-center interactions, vendor consolidation and better data visibility can reduce operational friction while improving on-time payments.
- Where payment choice is becoming cash flow strategy. Supporting preferred channels and methods, including digital wallets, text engagement and retail cash payments, can help providers collect faster while meeting customers where they already are.