Bill Payments Make Up One-Fifth of U.S. Consumer Spending

Mar 17, 2021

Doxo, a revolutionary web, and mobile bill pay service provider, has published its latest doxoINSIGHTS report called the, “2020 US Bill Pay Market Size & Category Breakout.” The latest findings indicated that the average American spends $2.75 trillion a year in 11 distinct bill payment categories. This comprises well over one-fifth of 21% of total U.S. consumer spending. 

How The Information Was Gathered

Actual household payments data was used to perform statistical analysis and to determine the size of the market as well as categories.  More than 30,000 US zip codes and 45 different types of services were also examined. 

According to doxo, its “ unique, nation-wide household bill pay data specifically quantifies the actual consumer portion of total recurring bill spend and household penetration rate for each category.”

In addition, all the bill pay data had the following properties:

  • With well over 4 million paying consumers, this provided a “statistically significant” database.
  • By including more than 30,000 US zip codes, it ensures that the data was “geographically diverse”.
  • Participation came from all income brackets, providing economic representation.
  • Acquiring sources of payment funding, including credit cards, bank accounts, and debit cards. 

Further research found that the average U.S. home was spending a total of $21,378 annually on bills. With the US Census Bureau reporting a median household income of $65,712, this reveals that almost one-third of Americans’ annual earnings goes to cover these essential expenses. This is a considerable percentage of income in every respect. 

Top Monthly Expenses By Category

Coming at the top of the list of monthly expenses was the cost of housing by way of mortgages. The average mortgage amount spent per month was $1,268. Rent followed closely behind at $1,023. Auto loans came in third at $374 per month. 

It was also discovered that the average American household was paying more “out-of-pocket” each month for their cell phone, internet, and cable. This was well over the amount of health insurance, dental, and even life insurance. However, these premiums are mostly covered by their current employers. 

Although the $21,378 spent annually by the average American household covers only the “most common bills”, there are additional costs associated with bill pay. These additional costs include payment account fraud and identity theft as well as overdraft and late fees.  All these fees tack on an additional $577 ever year, for every household. This translates into $74 billion annually. 

Staying On Top Of Your Bills

The key to maintaining good financial health is to stay current and up-to-date on your bills. This will ensure that you are not needlessly paying late fees and other additional charges. 

By utilizing bill pay, you are ensuring that none of your payments are neglected, giving you peace of mind, knowing that the funds are being automatically withdrawn from your bank account. 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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