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#132944 - 11/20/03 07:39 PM Bill Pay Usage
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Does anyone have any industry statistics on Bill Payment usage? We are looking at finally adding Billpay to our Online Banking service. I would like to try to prepare some type of income analysis, but I need some usage statistics first.

Specifically what I am looking for is for something that shows customer activity for community banks; On average, how many transactions are conducted per month, the average dollar amount per transaction, average number of consumers that apply or use this service, etc..

Any help would be appreciated.

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eBanking / Technology
#132945 - 11/20/03 07:55 PM Re: Bill Pay Usage
John Burnett Offline
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Cape Cod
Try contacting Dove Consulting (Boston).
http://www.doveassoc.com
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#132946 - 11/20/03 08:03 PM Re: Bill Pay Usage
incandescent Offline
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incandescent
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According to Gomez, only 28 percent of the 28 million Online Bankers are Active Bill Payers. Bank of America doubled their bill payment base to 2.3 million after waiving the fee, but can a Community bank afford to waive the entire fee? Bill payment is one of the best product from a customer retention point of view, but the cost of using a third party to actually provide the service makes it a loss leader.

If you have a large base of online customers, bill payment will probably do well as a new product. But it's all about the cost and whether or not you can afford to waive the cost, as B of A has done.

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#132947 - 11/20/03 08:45 PM Re: Bill Pay Usage
MackenzieS Offline
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MackenzieS
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Oklahoma
We know that expenses are going to be incurred to actually process through a third party, that is why we are trying to see what type of income we will generate to offset some of those costs.

Have many of you found that this is a service where you are not even breaking even?

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#132948 - 11/20/03 11:29 PM Re: Bill Pay Usage
Andy_Z Offline
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As Incandescent noted, many banks do consider it a loss leader and chalk it up to increased retention. Some may impose a fee for monthly payments over 4 or 6 or some other number.

I honestly believe a few years from now we may be debating that these fees should be more common, how much they are, etc. It will be ATM Charges Part II.
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#132949 - 11/21/03 03:36 AM Re: Bill Pay Usage
JacF Offline

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Joined: Nov 2001
Posts: 6,719
PA
Quote:

According to Gomez, only 28 percent of the 28 million Online Bankers are Active Bill Payers.


Other studies that I've seen (as well as feedback from my Bill Pay provider) put this number closer to 10%. SO you may want to look at multiple studies, especially those that focus on institutions similar to your.

For the record, we are at about the 10-12% mark enrolled, but only about 70% of those are active users.

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#132950 - 11/21/03 03:29 PM Re: Bill Pay Usage
reinkesd Offline
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reinkesd
Joined: May 2003
Posts: 232
Connecticut
Here's a site that I refer to from time to time that has some statistics that might be helpful.

Statistics

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#132951 - 11/21/03 06:39 PM Re: Bill Pay Usage
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Quote:

As Incandescent noted, many banks do consider it a loss leader and chalk it up to increased retention. Some may impose a fee for monthly payments over 4 or 6 or some other number.




It just seems like we are already absorbing a lot of the costs just to "stay competitive". I am not a proponent for giving away the farm. I believe that customers will pay for a service they value, and sometimes our management gets squimish when they think they are afraid we will do something to upset the masses. It can be frustrating.

I am going to recommend charging for the service. Maybe we won't necessarily profit from it, but at least we won't lose our a**es either. Sorry about the rant, its just that we are already a decade behind on the products and services we offer and they just make such a moutain out of a molehill on these issues. Sometimes it is difficult being part of the younger group of management as opposed to our "Old School" executive management.

Thanks for the stats link. I am going to put that in my Favorites for future use.

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#132952 - 11/22/03 03:50 AM Re: Bill Pay Usage
Andy_Z Offline
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Quote:

I believe that customers will pay for a service they value




Mac, I agree with you. I also think banks should fight many of the ridiculous suits that are brought against it. But the bottom line is sometimes settling is cheaper.

And while a customer will pay for a product or service, they also see the efficiencies the bank will get. Why should they pay for that? And if they will still pay what you want, if the bank down the street charges nothing, where will they bank, other things being equal? Sometime it is the nature of the beast and we do this to ourselves.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#132953 - 11/26/03 02:57 PM Re: Bill Pay Usage
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Quote:

And if they will still pay what you want, if the bank down the street charges nothing, where will they bank, other things being equal? Sometime it is the nature of the beast and we do this to ourselves.




Fortunately the research I have conducted shows that all non-mega banks in our area charge basically the same fee, therefore we will not be the odd man out, that is unless they prefer to use a megabank.

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