Over the past two years, utility debt has risen sharply—reaching $24 billion in March 2025, up from $17.5 billion in early 2023. According to the National Energy Assistance Directors Association (NEADA), about one in six U.S. households—roughly 21.2 million families—are currently behind on their energy bills. While some of this stems from financial strain, many residents simply miss due dates because of busy schedules and a lack of timely notifications. Regardless of the cause, growing delinquency makes it more difficult for local governments to maintain steady service delivery and financial stability.

Late utility payments have a direct impact on both the fiscal health and operational efficiency of municipalities. Without consistent collections, governments face unpredictable revenue streams, which makes it harder to fund critical services like water treatment, sewer maintenance, and infrastructure improvements. Delayed payments can stall key projects, force temporary reallocation of funds, or even affect a municipality’s credit standing—potentially driving up borrowing costs.

Smaller or fast-growing communities, which often operate with limited financial reserves, are especially vulnerable to this kind of revenue disruption. When many residents fall behind, governments may have to raise rates to offset the shortfall—putting additional pressure on low-income households and making equitable service delivery more difficult.

In addition to the financial challenges, late payments increase administrative workload. Staff time that could be spent on community engagement or strategic planning is often redirected to managing overdue accounts, handling manual billing tasks, and responding to payment inquiries. Over time, this strain can reduce service quality and chip away at public trust.

How Municipalities Can Reduce Utility Debt

While many residents struggle financially, a significant portion of late payments come from individuals who simply forget to pay amid their busy routines. Encouraging timely payments from residents who have the means to pay is one of the most effective strategies for improving collection rates and ensuring stable, predictable revenue. Reducing avoidable delinquencies also allows municipalities to focus more resources on supporting vulnerable households. 

Success starts with creating a payment experience that aligns with how today’s residents prefer to engage. An effective utility payment system must be flexible, accessible, and user-friendly—supporting everyone from digital newcomers to tech-savvy users. The system should be flexible enough to accommodate a variety of payment habits and financial conditions. When residents can choose how and when they pay—without unnecessary friction—they’re more likely to stay current on their bills.

1. Omnichannel Payment Access

Reducing utility debt requires flexible payment options that meet residents on their preferred platforms. While some still favor traditional payment methods like cash or check, many others use debit and credit cards, or ACH transfers. Some residents opt to pay in person at a point-of-sale station or over the phone through IVR or operator assistance, while others prefer to manage their bills online through a portal or mobile app. A well-rounded payment strategy makes it easier for everyone to engage—on their own terms.

As the number of digital-first residents continues to grow, delivering quick and convenient payment experiences—such as Pay by Text, secure online portals, and mobile apps for iOS and Android—is becoming more important than ever, particularly as private sector convenience is raising the bar on how citizens expect to engage with their local utilities. According to a recent PYMNTS survey, 85% of all monthly bills are now paid digitally, with more than a third set for automatic payment. As more residents turn to their phones and laptops to manage daily tasks, it’s more important than ever to make digital channels the foundation of your customer experience.

With comprehensive, integrated payment solutions such as Xpress Bill Pay (XBP), local governments can deliver a truly omnichannel experience to citizens. Whether a resident prefers paying through a mobile app, online portal, text message, phone call, or even by mail, Xpress Bill Pay handles it all—seamlessly and securely. Our payment processing facility can even receive mailed checks, scan them, and apply the payment directly to the account, fully integrated with your billing system. It’s a complete, user-friendly solution that helps reduce utility debt and improve the overall customer experience.

2. Comprehensive Digital Self-Service

Thanks to digital user experiences by companies like Amazon, Capital One, and AT&T, residents now expect the same level of ease and convenience when paying their utility bills. They want a seamless digital experience—one where they can manage payments, go paperless, set up Auto-Pay, or update their account details without needing to visit a payment office or call customer support. The expectation is clear: let them take care of it, on their own time, with minimal friction.

That’s where self-service tools make all the difference. Platforms like Xpress Bill Pay give residents the control they’re looking for—allowing them to create an account in minutes, pay bills anytime with just a few clicks, set up recurring payments, and view up to two years of their billing history. Even those who prefer not to register can pay through guest checkout and still receive future bill notifications. Reducing utility debt is often about convenience, flexibility, and meeting people where they are—online, on their schedule.

Digital self-service doesn’t just benefit residents—it streamlines operations for your team too. As more customers prefer to handle routine tasks themselves, your staff can spend less time on phone calls, walk-ins, and manual processing. That means faster payments, fewer missed due dates, reduced account issues, and more time for your team to focus on what matters most: delivering excellent service.

3. One Platform for All Payments

When residents have to manage separate accounts for different types of bills—utilities, taxes, permits, and more—the process quickly becomes confusing and time-consuming. That added complexity often leads to procrastination and missed payments simply because citizens want to avoid the hassle. Offering a convenient, unified platform that supports multiple bill types not only simplifies the experience for residents but also makes reconciliation faster and more accurate for your staff.

With an integrated system, residents can log in once and take care of everything in one place. For example, Xpress Bill Pay lets users pay for utilities, business licenses, and many other services through a single account. Business owners can even link their license accounts directly to their XBP profile, making future payments quick and seamless. It’s a smoother, more efficient experience—one that saves time and reduces friction at every step.

4. Up-to-Date Account Information

Accurate, easy-to-understand account information is key to helping residents pay their utility bills on time. When people can clearly see what they owe, when it’s due, and how it’s calculated, they’re more likely to act quickly and confidently. On the flip side, confusing or outdated billing details often lead to payment delays, disputes, or unintentional nonpayment—and that creates more work for your staff, who are left sorting out errors and fielding extra customer service calls.

Real-time updates go a long way in preventing such issues. When residents have instant access to their current balance, recent charges, and payment history, the experience becomes much more transparent and user-friendly. It mirrors the kind of clarity and convenience they’ve come to expect from private-sector services—and helps them stay on top of their payments without second-guessing the details.

That’s where top-tier integrations come in. Tools like Real-Time Bill Display from Xpress Bill Pay ensure accounts are updated automatically whenever a payment or adjustment is made. Residents and staff alike benefit from always having the latest information at their fingertips on one platform—no lag time, no confusion. It’s a simple but powerful way to support accuracy, reduce utility debt, and improve citizen satisfaction.

5. Timely Notifications

Sometimes, a simple heads up is all it takes to turn an unpaid bill into a completed transaction. Timely notifications help residents stay on top of their bills—particularly helpful for busy individuals who may overlook due dates in the midst of day-to-day life. By keeping bills top of mind, notifications play a key role in reducing utility debt, minimizing service disruptions, and improving the overall customer experience. For local governments, that means more consistent revenue and fewer hours spent managing overdue accounts.

With solutions like Xpress Bill Pay, sending out these helpful notifications becomes effortless. Built-in tools allow your organization to deliver automated notifications when bills are ready—so your residents stay informed without needing to ask. Plus, you can send targeted messages that encourage proactive actions like going paperless, setting up Auto-Pay, or downloading the mobile app. These small shifts add up to a smoother payment process and a more engaged, reliable customer base.

6. Automated Payments

While notifications are a great way to keep residents on track, Auto-Pay takes it one step further by offering a simple, reliable “set it and forget it” option. It’s one of the most effective tools for encouraging on-time payments—eliminating the need for monthly manual actions and greatly reducing the chances of missed due dates.

For residents juggling work, family, and day-to-day responsibilities, logging in every month to pay a utility bill can easily fall off the radar. With Auto-Pay, payments are scheduled in advance and processed automatically, giving residents peace of mind while helping them avoid late fees or service disruptions. For municipalities, this translates into fewer delinquencies, improved collection rates, and more consistent revenue throughout the year.

With Xpress Bill Pay, setting up Auto-Pay is fast and easy—whether through a mobile app or secure online portal. And for staff, the Admin Auto-Pay feature eliminates the need for manually managing direct payment files. Everything is handled within a single, integrated system, giving your team a streamlined process and giving your customers a smarter, stress-free way to stay current.

The Path Forward with Modern Digital Billing

As utility debt continues to rise and residents juggle increasingly busy lives, municipalities need more than traditional billing methods to keep payments on track. The good news is that modern, integrated payment solutions like Xpress Bill Pay offer the tools to make it easier for residents to stay current—and for governments to maintain consistent revenue. From omnichannel access and self-service features to real-time billing updates, automated notifications, and Auto-Pay, these smart tools create a seamless, user-friendly experience that encourages timely action and builds long-term trust.

By investing in flexible, resident-focused payment platforms, municipalities not only reduce late payments and administrative overhead—they also create a stronger foundation for financial stability and service delivery. When residents are empowered with convenient, intuitive ways to pay, they’re more likely to follow through. And when payments flow reliably, local governments can plan, budget, and serve their communities with confidence. It’s a win for everyone involved.

See why municipalities nationwide trust Xpress Bill Pay to streamline billing and boost on-time payments.