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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

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

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

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

First published on 12/16/02

First published on 12/16/2002

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