Episode 3: The quiet revolution in how utilities get paid

Future of Utilities Podcast 

The quiet revolution in how utilities get paid 

Lindley Gooden: Hello, I’m Lindley Gooden. Welcome to Future of Utilities Insights. Great to have you with us today. There’s one thing customers often don’t think about in utilities, and that’s how they get paid. You might think about it if you’re being chased for a bill, or when you set up a direct debit. Utility companies will be looking at those fixed payments, maybe a top-up payment too. But are things about to change? Possibly so. Let’s meet Myles Stevenson from Modulr. Great to have you here, Myles – tell us more about you, and what Modulr does. 

Myles Stevenson: Fantastic to join you. I’m Myles Stevenson, CEO and founder of Modulr, a payments automation business. We enable businesses to automate the flow of money in and out of their operations in an efficient, controlled and reliable way. We do that across a range of businesses – we’re processing around 200 million transactions a year, about £180 billion of payment flow, for 6,000 businesses, from SMEs up to global enterprises, all through a single platform, so customers have choice in how they do it. 

Lindley Gooden: Up until now, direct debits have been the mainstay of payments. But the payment value changes, you might be chasing a payment, or looking for something more complex to handle. So first – why have direct debits dominated, and how might that change? 

Myles Stevenson: Direct debits have been fantastic, and continue to be. We support it as one of the payment types on our platform, and we’ll keep doing that. It fits very well with fixed, recurring, regular payments, and for certain customer groups it’s genuinely the right tool – reliable, well understood, and cost-effective for businesses. But things are changing. New payment types are emerging, customer requirements are shifting, and operational challenges mean direct debit on its own is no longer enough. It’s about adding more capability, so a business can manage its payment flows properly. 

Lindley Gooden: The world is changing – how we pay is changing, cost of living is a factor for everyone, we’ve been through Covid. Being responsive, allowing more variability in payments, feels important right now. What keeps payments teams up at night? 

Myles Stevenson: The common answer, and it’s valid, is the operational challenge of things going wrong. The happy path is fine – most payments do go through – but it’s the smaller proportion that fail where the real cost sits: the follow-up, the inefficiency, the controls needed, the time it takes to resolve. That’s real and important. 

But there’s another area businesses tend to forget: payments can be a strategic enabler. How you acquire customers, how you digitally onboard them, how quickly you get them signed up. Thinking about payments strategically, rather than leaving it in the back office as an afterthought, matters more and more. 

Lindley Gooden: I’d like a happy payments team, that would be something. But has anything actually changed recently, or is this a gradual build-up in the need for variety in how people pay? 

Myles Stevenson: It’s one of those things that looks fine at a high level within a business – people don’t think it’s broken. But when you lift the lid and look properly, it is broken. Inefficiencies creep up, controls slip, conversion drops, and the number of issues grows as a proportion of the business. At that point, looking for alternatives – or additions, not necessarily a full replacement – becomes critical. 

Lindley Gooden: Consumers and businesses have probably never scrutinised their bills more closely than now, given years of energy price pressure and disruption from overseas. What do you think utilities get wrong, particularly in sensitive times like these? 

Myles Stevenson: I don’t think it’s necessarily about getting things wrong – it’s about what more they could do. Giving customers more choice by adding different payment types into the platform means you can tailor the experience to what different customers actually need. If someone’s struggling to pay at a certain point in the month, locking them into one fixed date creates problems for them and for the business. Something more flexible gives both sides more options, improves the experience, improves collection rates, and reduces the “unhappy path” – the chasing that happens when bills don’t get paid. 

Lindley Gooden: Which is time-consuming and unpleasant for everyone. Talk us through your platform – what does it do, practically, to solve these issues? 

Myles Stevenson: The name Modulr reflects the idea directly – modules and components, giving businesses choice. They can pick one payment method suited to a specific problem, or deploy several methods through a single platform. It’s about choice, and enabling a business to do what’s right for its customers. 

[This conversation is brought to you by Modulr, the payments automation platform. Modulr automates how money moves, delivering the efficiency, accuracy and reliability that finance operations need to scale.] 

Lindley Gooden: That’s powerful, because you don’t usually get that choice with a single platform – you can choose how you interact, which system you use, how you apply it to different customers. I imagine you also need information from the customer to understand what they actually need. 

Myles Stevenson: Absolutely – enabling that customisation across workflows, reconciliation, and the front-end customer experience is critical. 

Lindley Gooden: Talk us through commercial variable recurring payments. What is CVRP? 

Myles Stevenson: CVRP is a new payment scheme – one of the first new payment schemes in the UK in around 18 years. Most of us are familiar with faster payments, which is celebrating its 18th anniversary this year, so people in the payments industry might be marking that too. Forming a new scheme is genuinely significant. We’re one of the founding members and shareholders, alongside a number of other payments companies and banks. 

As the name suggests, CVRP gives businesses variability – in setup and in timing. Customers set it up through their own banking app, using the bank’s own security and open banking infrastructure, and it runs on the faster payments rails, so you get instant settlement. Rather than waiting through the usual three-day direct debit cycle, the money moves instantly. And because consent is managed through the banking app, if a customer needs to change the date, the amount, or the consent itself – because their circumstances or income have changed – they can do that directly and securely, matching payment requests to when the money is actually in their account. 

That also removes a lot of the operational inefficiency, because the system checks there’s money in the account before the payment request is made. Direct debit, by contrast, requests at a fixed time regardless, and if the money isn’t there, it simply fails. 

Lindley Gooden: What’s appealing about that – correct me if I’m wrong – is that it sits inside your own banking app. You can see it, track it, and there’s a preventative element to it as well? 

Myles Stevenson: Exactly. The customer is in control, but it also lets the utility company build it into their own digital experience. 

Lindley Gooden: A win-win – digital control for the utility, and the customer feels in control too. 

Myles Stevenson: That’s the idea. 

Lindley Gooden: As we come to a close – if you had one message for utility businesses, what would it be? 

Myles Stevenson: That there’s a new way of doing this. Some businesses will be perfectly happy with how they currently handle payments, but I doubt everyone is. I’d encourage moving the conversation about payments away from being something you “must do,” an afterthought bolted on, and towards a strategic option – something that can grow the business, change the business, and give customers more choice through a broader range of payment services. Think about it customer-first: give people the choice to pay when they actually want to pay. 

Lindley Gooden: One final, more macro thought – this feels overdue in utilities. In a time of real change, it seems important for customers to have more interaction with their utility providers. How do you see this shaping that relationship more broadly? 

Myles Stevenson: Providing flexibility and adapting to customer needs – how people want to interact, how they want to pay, and how working patterns and pay dates have changed – means matching an individual’s own cash flow, not just the company’s, to when their outgoings, like utility payments, actually fall due. 

Lindley Gooden: It’s a much more relational way of doing things, which hopefully opens up a better relationship between customers and utilities. Thanks, Myles, for joining us and explaining all of this so clearly. 

Myles Stevenson: Thank you very much. 

Lindley Gooden: And that’s it for now from Future of Utilities Insights. Great to have you with us – see you next time. 

This conversation is brought to you by Modulr, the payments automation platform.