Late payments are among the most significant challenges facing the energy sector.
Recent data suggests that around a quarter of UK households are in arrears on their energy bill payments (The Guardian, March 2026), increasing pressure on both providers and customers.
Bad debt is becoming more common, costing businesses in the sector in terms of revenue, resource, and customer trust.
And the impact goes beyond the business itself. The cost of energy bill debt is also felt by customers, with the average annual cost rising to £64.67 last year, up from £40 in 2022. (BBC, April 2026)
So how can energy companies make it easier for customers to pay on time while improving the overall payment experience?
Open Banking, which allows secure sharing of financial data, may help energy providers improve payment processes. Read on to find out more.
Why late payments are a growing challenge for energy providers
Missed or delayed payments in the energy sector are often linked to more than affordability alone. In many cases, the payment journey itself may create barriers.
Processes that rely on manual entry, such as card payments, could introduce friction. Customers may abandon payments if they encounter delays, timeouts, or repeated requests for information.
For energy providers, this can also create additional work, from chasing updated card details to managing failed transactions.
Where energy payment journeys break down
Many energy payment journeys may not be completed due to checkout friction and poor user experience throughout the process (Payit by NatWest, March 2026).
Legacy payment methods, such as card transactions, often rely on manual input from customers, which can introduce errors or delays.
Often the need to remember long card numbers or bank account details could contribute to abandoned payment journeys, whether due to security timeouts or customers simply forgetting to return to the interrupted payment.
These payment methods may also involve extra work for businesses before payment can be made. For example, when cards expire, energy providers may need to request updated details before payments can proceed.
As a result, the process is not always as straightforward as it could be.
The customer experience cost of payment friction
Friction in payment journeys can contribute to customer frustration and missed payments. Customers may delay completing payments if the process feels time-consuming or complex.
For energy providers, this may increase customer support demand and add to the cost of resolving issues.
Where customers are already in arrears, difficulty completing payments may add to frustration, particularly if they are trying to pay but encounter barriers.
Being in default can already be stressful for customers: payment processes shouldn’t add to that frustration.
How Open Banking improves energy payments
Improving energy bill payment journeys has the potential to deliver benefits beyond the checkout.
Smoother experiences may help reduce escalations and improve overall customer satisfaction.
When it comes to paying energy bills, Open Banking could support businesses looking to reduce the risk of late or failed payments.
By enabling secure account-to-account payments, Open Banking reduces the need for manual entry, helping to reduce the number of steps in the payment process.
Improved visibility of payments could also help customers track and manage their bills
Streamlining affordability checks
Another ongoing challenge for the energy sector is affordability assessment.
Providers need up-to-date financial information to make sure customers get the right help. Traditional approaches often involve customer-supplied documents, manual reviews, or in some cases home visits.
This can be time-consuming and resource intensive.
Open Banking could support this process by enabling customers to securely share financial data through Account Information Services (AIS).
This could help provide a more up-to-date view of a customer’s financial position, supporting more informed decision-making.
How Payit by NatWest supports modern energy payment journeys
Payit by NatWest* offers Open Banking-enabled payment solutions, combining the assurance of a bank with a straightforward way to make payments.
Payit is designed to meet the security and reliability requirements expected in regulated sectors.
We are already working with organisations in the energy sector, including Utilita, to help support efficient and straightforward payment journeys.
Keen to hear more about how we can support your energy business? Get in touch with us at [email protected].
*You will need to sign up to Payit terms and conditions and you may need to hold an account with us. Your business must be based and trading in the UK with a turnover above £2m. You must be 18 years or older. Fees apply. Speak to a NatWest Relationship Manager (where relevant) for further information, or request a call back.