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Leading Causes of Late Bill Payments: 4 Certified Reasons Why

Text to pay

It seems a growing number of people are using credit to make purchases these days. Some use credit cards whereas others take advantage of store charge accounts and other lines of credit. Reports also show that the option to buy now and pay later (BNPL) is becoming available to a growing number of consumers. Even those whose credit scores and histories have rendered them ineligible for credit cards in the past are now being accepted.

Benefits fitting into puzzle

Benefits of Extending Credit

Offering financing generates numerous benefits for businesses. One of the most prominent is allowing consumers to purchase now instead of later or not at all. With flexible payment options and no money down, customers tend to feel more comfortable when making sizable purchases. At the same time, businesses realize improved sales and elevated income.

Advantages, even on the Downside

While businesses can certainly benefit from offering customers financing options, sometimes consumers go a bit over the edge. If payments can’t be made on time or at all, the issue remains between the consumer and the bank underwriting their card – the merchant remains insulated. By extending the credit to a customer, a merchant is accepting responsibility for tracking down delinquencies if the customer is late in their payment.

Why Do Customers Pay Late?

No one wants to see consumers land in financial trouble. If merchants can easily do something to help, they should do so. So, let’s take a look at why a customers might not pay bills on time. Some make a habit of paying their bills late whereas others do so occasionally and inadvertently. Some of the reasons may be surprising, but easily remedied.

Inadequate Payment Platforms

Many consumers end up paying late because of obstacles in the payment platforms their creditors are using. Some platforms are simply inconvenient, confusing, or lack options that meet the consumers’ needs. That alone can be enough to cause a consumer to abandon the process.  

Other payment platforms send people around in circles. They enter all the required information, click the “submit” button, and get an error message because of some minor detail they overlooked. Then, they must start all over again. Most of the consumers who encounter this issue would gladly make their payments on time if their creditors had a more user-friendly digital payment platform.

As a business owner, it’s important to see all of this from the consumer’s point of view. If you met resistance at every turn, might you delay paying certain bills? People are stressed enough without having to deal with a runaround from an online bill payment system.

Payment platform

Keep in mind, internal problems with some inadequate payment platforms are the reasons certain payments are late. Customers may enter their payment information before the due date or well within the allotted grace period, but the platform delays processing their payments.

That can make payments appear late even though the consumer had honorable intentions. It can also lead to late fees the customer shouldn’t have to pay. Excessive online “convenience” fees discourage consumers as well.

Those are all common reasons almost forty percent of consumers delay or avoid making payments. Why rush to pay on time knowing you’ll still face the consequences of paying it late or be forced to pay lofty fees for making the payment in the first place? All these issues can be avoided with a more user-friendly online payment platform.


Forgetfulness is also a leading reason for late payments. People have a lot on their minds these days. Stress has been found to cause memory disruptions, and reports show that people are more stressed now than ever before. Hectic lifestyles play a role here as well. According to a recent article from CNN, even the pandemic has led to surging forgetfulness.

This may not seem like a valid excuse from a creditor’s point of view. Still, it’s becoming more common. Using technology to send friendly reminders can be very helpful here. Texts, emails, non-threatening letters, and other solutions can go a long way toward keeping you at the forefront of customers’ minds, so they’re regularly reminded to pay. Finally, any reminder should always include a button to click or touch for immediate payment.

Financial Difficulties

Tying up a one dollar bill

Countless debtors say they simply don’t have the money to pay certain bills when creditors contact them about late payments. Most of them aren’t making excuses; they’re truly experiencing financial hardships. Job loss, unexpected expenses, and many other issues can leave consumers without enough funds to pay their bills on time.

More than forty-five percent of Americans are facing financial difficulties right now based on a recent report from Prudential. Many are selling, borrowing money, or finding other means to avoid falling further behind. Still, these options only go so far, and they’re not available to everyone. With an ever-growing number of families living from paycheck to paycheck, even a seemingly minor unexpected expense can result in financial duress.  

Lack of Consequences

Most of us are taught from an early age that negative behaviors bring about undesirable outcomes. That encourages us to do the right thing whenever possible. Of course, later in life, we often find the rule might not apply in all scenarios. This can lead some to take full advantage of the situation in which negative behaviors don’t generate equally negative ramifications.

Paying bills also has a set of rules and consequences. Late fees and the potential for losing credit privileges are a few of the reparations of failing to make timely payments. Companies that are lackadaisical in their regulation of late payments will likely get taken advantage of. As such, it’s vital that companies have concrete consequences in place for delinquencies, encouraging debtors to be responsible.

Encouraging Debtors to Pay On Time

Almost half of American consumers will pay bills late at some point. While some will simply forget, others will do so because they dread dealing with problematic payment platforms or because they can’t navigate certain online payments systems at all. They simply give up and mail a check, money order, or completely avoid paying at all.

Implementing a user-friendly payment platform is vital in resolving the problem for many businesses. Those that don’t impose late fees or penalties for late or non-payment should reconsider their methods. In doing so, late payers will hopefully become more responsible and make more of an effort to remember. Financial struggles are inevitable, so having a certain amount of empathy is advised. Still, a line must be drawn to avoid being taken advantage of.

About the Author

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With over 25 years of Sales & Marketing experience, Thomas Buttino has dedicated his career to introducing business owners and operators to new and existing technology that simplifies their efforts so they can continue having a positive impact on the world around them. With a focus on bringing the latest digital payment technology to clients, we can enhance the customers experience, while ethically lifting revenue, and delivering the greatest outcome for everyone involved.

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