The 2010 eBilling Benchmarking Study shows that eBilling is gaining momentum across an ever broadening base of Billers who are extending eBilling options for their customers over the next two years. Billers with established programs are also energizing their efforts to boost customer adoption of paperless billing.

The majority of participating Billers expect eBilling to become mainstream over the next five years. While some Billers have been able to achieve nearly 100 % adoption of electronic billing through mandates, most Billers do not have that option. For Billers that cannot mandate eBilling, the perception is that after a decade of growth eBill adoption has “plateaued.” They believe that the easy converts have already been won over and in order to boost eBill adoption they must develop new and innovative targeted programs. Some Billers are exploring ways to migrate the enrollment process from ‘Opt-In’ to Opt-Out’ for new customers and change their default methods away from paper-based billing.

Notably, an ever expanding range of Billers are invigorating their marketing efforts to boost eBill adoption. Their goal is to achieve cost savings from paperless billing by emphasizing convenience, simplicity and environmental benefits.

Adoption Rates

eBilling is gaining momentum across markets with more billers coming online in 2011 and 2012. Although eBilling adoption trails customer adoption of electronic payments, eBills are making inroads among a broadening range of Billers. Telecommunications and Financial Services industry participants report the highest eBilling rates with 39% and 31% respectively (See Chart 1 below).

eBilling with paper suppression lags behind as many customers are reluctant to give up paper bills. This is most evident in the insurance and utility segments which are still ramping up their programs and must navigate complex legal and regulatory requirements. eBilling growth has been accelerating as 82% of participants reported increasing adoption by their customers and 88% of participants reported that eBill adoption is a significant opportunity for their organization. The three primary benefits of eBilling identified by participants which support expansion of their organization’s eBilling programs are:

• Cost savings of $0.40 to $0.50 per bill
• Improved customer satisfaction and retention
• Higher levels of electronic payments coincide with higher levels of paperless acceptance

This study was sponsored by NACHA’s Council for Electronic Billing and Payment (CEBP) and the PayItGreen Coalition. For information on the potential saving opportunities and how to streamline your invoicing process (email sales@unitedtranzactions.com).

Online bill pay has increasingly become a preferred payment option for more and more customers. Right now what’s jet-fueling this trend is unmistakable – the economy.

A recently released Fiserv study (2010 Household Billing Survey) said it best; in the current economic climate “consumers value control and flexibility particularly when they are experiencing cash flow difficulty.” When in a bind, consumers want to hold on to their cash as long as possible and head to a service provider’s Website at the last acceptable moment to pay their bill.

Aside from the economic benefits, there are other obvious reasons why online bill pay continues to mature.  The exponential growth in Internet usage has fostered the increase in online bill presentment and payment options by household (and other) service providers, like utility and cable companies. According to the survey results, 47.9 million households are utilizing biller direct Websites to pay their bills each month.  In this hectic world we live in, customer convenience certainly plays a big role in all of this. I know my wife prefers to pay all of our bills online as its easier then cutting a check, paying postage and waiting a couple days for the check to post. She can also better control our cash flow, her added piece of mind.

But, the benefits aren’t all one-sided.  Merchants can benefit from ensuring their customer’s have the option to pay their bills online, too. In this strained economy payments are harder to come by, it’s critical to be as payment friendly as possible. By offering online payment as an option, merchants can speed time to cash, and lower bad debt.  Plus, you can rest assured that your customer will be more satisfied.

Merchants should also consider which type of payment options they are offering online to meet customer needs.  According to the Fiserv study, 37% of consumers reported reduced use of their credit card.  As consumers become more aware of their cash situation, they are going to be more conscious about borrowing.  According to the National Automated Clearinghouse Association (NACHA), “ACH payment volume increased by more than 475 million transactions in 2009, bringing year-end total transaction volume to 18.76 billion, a 2.6% increase over 2008 activity.  The biggest increase occurred in Internet-initiated payments.” Merchants should be sure to incorporate ACH payments as an option, a method that could also help eliminate credit card processing fees and the cost of payment acceptance.

Why Should Merchants Offer Online Bill Payment Options to their Customers?

• It offers your customers an extra payment option and creates an additional “bond” between your valued customer and your company.
• It’s easy and friendly to use. Customers only need to register the first time, then can pay anytime they want- 24/7.
• It’s convenient and practical for both customers and credit managers. Customers can work all day and pay their bills at night. It saves them time. Credit managers can work all day and receive payments without effort. It saves them time.
• It creates efficiency and enhanced productivity while improving cash flow along with automatic cash applications.
• Customers can pinpoint their payment and avoid late penalties or lost discounts.
• Customers feel more in control.

What do you think about online bill pay?  What are some of the other benefits that you have seen merchants take advantage of by offering expanded payment options to their customers?

According to the company, the 2010 survey shows online banking, bill payment and e-bill usage continues to grow, and that the online bill payment population has changed significantly during the last decade. Between 2000 and 2010, the number of households that use online banking increased more than six-fold (to 72.5 million), and the number that use online bill payment increased nearly eight-fold (to 36.4 million).

During the course of the Consumer Billing and Payment Trends survey, online bill payment has been successful in moving into the mainstream. Currently, 72.5 million U.S. households, 80 percent of all households with Internet access, use online banking, while 36.4 million households, 40 percent of all households with Internet access, use online bill payment.

In 2002, more than half of online bill payers were between the ages of 35 and 54. In 2010, consumers age 21-34 made up 28 percent of online bill payers, consumers age 35-54 made up 48 percent, and consumers over age 55 made up a sizeable 24 percent of all online bill payers, underscoring the fact that the service is not only for the young.

Consumers of all income levels have embraced online bill payment as well. In 2002, middle-income consumers dominated use of the service, whereas, in 2010, more than a third of online bill payers had a yearly household income of less than $50,000. Usage among the highest Income brackets has grown as well. Among households with Internet access, online bill payment, both at financial institution websites and company (biller direct) websites has grown substantially during the last 10 years, with a corresponding reduction of paper checks. While other forms of payment have remained relatively stable as a percentage of overall bill payments, paper checks have declined from 61 percent of all payments in 2000 to 26 percent in 2010, while online bill payments have grown from 12 percent to 45 percent of all payments.

Electronic bills, or e-bills, which contain all the same information as paper bills but are delivered online, also appear to be catching on, perhaps due to technology that has made e-bills more visible within the online banking and bill payment service as well as increased efforts to educate consumers about the benefits. The number of consumers that receive an e-bill jumped nine percent between 2009 and 2010. Today, 33 percent of all consumers who pay a bill at their financial institution website also receive at least one e-bill there, up from 24 percent in 2009.

Newer technologies such as mobile banking and person-to-person payments are areas to watch over the next decade, and are already showing an adoption trajectory similar to online bill payment. In just two years, the number of mobile phone users who conducted one or more banking services via their mobile phone increased from 23 percent in 2008 to 30 percent in 2010. The number of mobile banking users who receive or pay bills via their mobile phone jumped from 18 percent in 2008 to 30 percent in the same time period. This is most likely due to the increasing adoption of smartphones.

The 2010 Consumer Billing and Payment Trends survey reflects the responses of 3029 consumers who were at least 21 years old and responsible for paying their households bills, and is representative of the habits of the 90.5 million households in the United States with Internet access.

For the ease and benefit of our clients, UTA forms will now be accessible directly through the R&R and ADP e-libraries.

Whereas before forms had to be downloaded from a separate location, often causing inefficiency and confusion, now there will be no need to leave the car deal or F&I papers while consummating a sale.

The necessary UTA forms will be right there in the e-libraries of both Reynolds & Reynolds and ADP, making life easier and more efficient for everyone.

This is just one of many ways that UTA plans to make payment processing a more seamless experience. Look for future blog posts that detail additional ways that UTA is leading the payment processing industry.