NACHA Survey Shows Growth of Electronic Bill Payment
Consumer Marketing Guide Published to Assist Billers
Herndon, Virginia, December 11, 2002 - Consumer electronic bill
payment service providers (CSPs) processed more than 400 million
Internet-initiated consumer bill payments in 2001, according to a new survey
of CSPs jointly sponsored by NACHA's Council for Electronic Billing and
Payment (CEBP) and TowerGroup. The dollar amount of these bill payments was
$120.9 billion.
"The results of the NACHA and TowerGroup EBPP Consumer Service
Provider Survey clearly document the adoption of Internet bill payment by
consumers," said Beth Robertson of TowerGroup, the survey's principal
investigator and a CEBP member. "The survey also found that the number of
consumer bill payments on the Internet has increased by 35 percent annually
for two consecutive years."
The Council for Electronic Billing and Payment first surveyed
consumer bill payment service providers in 1997. That original survey
estimated electronic bill payment volume in 1996 of 113 million items, worth
$26.9 billion. Bill payment volume and value have quadrupled since then.
Other significant findings from the survey:
The average bill payment size in 2001 was $300, up from an average
of $231 in 1996;
The top five bill payment service providers processed 92 percent of
the bill payments in 2001, compared with 76 percent in 1996;
ACH debit is the payment option most frequently offered by non-bank
CSPs, at eighty-five percent;
Sixty-four percent of CSP payments to billers were made
electronically in December 2001, up from 40 percent in 1996;
Seventy-one percent of CSPs believe the barriers to greater
electronic payment volume conversion are largely biller-centric, with many
billers unable or unwilling to take the steps necessary to accept electronic
payments.
The survey results also include data on the use of various payment
methods, the average payment lead-time, and the use of remittance data.
For purposes of the survey, a CSP was defined as a bank or vendor
that collects online bill payment instructions from consumers and processes
some or all of these instructions to create payments to billers. Vendor
results include biller-direct payment activity where a biller has outsourced
the payment processing function to a vendor. The NACHA/TowerGroup survey
identified 32 CSPs, of which 23 organizations - representing more than 90
percent of the market's total volume - responded to the survey.
Consumer EBPP Marketing Guide
In a separate project, the Council for Electronic Billing and
Payment has issued a new publication, Marketing Electronic Billing and
Payment to Consumers, designed to assist companies in achieving high rates
of participation in their electronic bill presentment and payment programs.
According to the marketing guide, despite the recent growth in consumer
participation in viewing and paying bills on the Internet, additional
consumer use of EBPP could be achieved through more and better marketing of
EBPP services by billers.
"Consumer participation is the key to realizing the benefits of
EBPP, such as cost reduction, processing efficiencies, and customer
retention," said Mike Taipale of the Federal Reserve Bank of Cleveland and
the Chairman of the Council. "The marketing guide is valuable to billers in
any industry that regularly send bills to consumers."
The guide identifies the critical elements of a successful EBPP
marketing plan, and defines customer segmentation and marketing techniques.
Four biller case studies are also provided, illustrating how these
techniques are being applied. The guide also covers marketing EBPP through
customer service representatives, as well as advertising EBPP services.
The principal authors of the guide are Edward Butler of DST Output,
Terri Bialowas of the Federal Reserve Bank of Cleveland, Beth Bitetto of
Mastercard RPPS, and Susan Foulds of Online Resources Corporation. The
publication is available through NACHA's online publications catalog at
http://pubs.nacha.org/billpay.html.
The Council for Electronic Billing and Payment was formed in 1993 to
act as a forum to facilitate, educate and promote the use of electronic
consumer-initiated billing and payment programs and services to all
interested stakeholders in the payments industry. The Council currently has
80 members. The Council also maintains a public education web site at
http://www.ebilling.org.
About NACHA - The Electronic Payments Association
NACHA is the leading organization in developing electronic solutions to
improve the payments system. NACHA represents more than 12,000 financial
institutions through direct memberships and a network of regional payments
associations, and 650 organizations through its industry councils. NACHA
develops operating rules and business practices for the Automated Clearing
House (ACH) Network and for electronic payments in the areas of Internet
commerce, electronic bill and invoice presentment and payment (EBPP, EIPP),
e-checks, financial electronic data interchange (EDI), international
payments, and electronic benefits transfer (EBT). Visit NACHA on the
Internet at www.nacha.org.
About TowerGroup
TowerGroup provides a comprehensive range of research and advisory services
focused on the financial services industry, bringing some of the world's
largest financial services, technology, and consulting firms a deeper
understanding of the business and technology issues impacting them.
Headquartered in Needham, Massachusetts near Boston, and with offices in New
York, London, and Kuala Lumpur, TowerGroup serves a global client base.
Visit TowerGroup online at www.towergroup.com.
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