By 2006, 65 million US consumers will view their monthly bills online, according to Gartner Group, but banks and billers need to collaborate for the industry to realize its true potential while meeting customer requirements. Although consumers trust banks as repositories for their capital, free e-billing services at service providers are an enticement to pay online bills at these websites and not at banks’ sites. With Boston Consulting Group finding bank customers who pay bills online, to be twice as profitable as others, banks that succeed in signing customers for online bill payment, will have a valuable competitive edge.
Gartner’s study shows that of the US consumers viewing bills online, 7 million do so at a bank, while 28 million go to a biller’s web site for this purpose. Research director, Avivah Litan, at Gartner, attributes this trend to the fact that consumers can pay immediately at billers’ web sites, whereas banks may take up to five days to clear a bill payment once it has been initiated online. Litan also refers to the “uphill battle [in] converting paper-bound customers to electronic transactions”, with Gartner research showing that 116 million US adults still want to pay bills in the post, even if 57 million currently pay bills via direct debit.
BCG’s research meanwhile found that among 20 of the top US banks with similar services, adoption of online bill payment services ranged from 1 per cent to 17.8 per cent. On average, these banks classified 3.6 per cent of their customers as active online bill-payers who had paid a bill online in the past 30 days. The key differentiator in online bill payment adoption was the extent to which a bank had integrated its online services with other customer channels, BCG VP, Carl Rutstein, is quoted as saying in Bank Systems Online. To this end, banks not charging fees for bill payment were most likely to have fully integrated their service channels.(ePaynews.com)