Convenience Accelerates EBPP; Paper Reduction Stalls

In a white paper, Regulus cited Fort Knox National Company’s numbers saying that 25 percent of consumers prefer biller-direct payments (those paid directly from, say, an AT&T Web site), while 22 percent prefer to use online banking. Debit card and credit card payments over the phone lag far behind at 7 percent and 3 percent, respectively. Tower Group said that overall, there were 3 billion online payments in 2007, twice as many as in 2004.

But perhaps one of the biggest trends is the use of cell phones as a channel for online bill payment. Regulus said 57 percent of cell phone users are paying their bills electronically.

Brian Mulford, chief product and IT officer at Regulus said this includes the use of IVRs and topping off of prepaid accounts. “Everything that isn’t a paper check,” he said.

Regulus is seeing much of the shift to electronic payments occurring on the remittance side of its business where 75 percent to 80 percent of transactions are cleared electronically. And while electronic payments by consumers are growing, it is not seeing a corresponding decrease in the number of paper bills being sent, despite an environmental awareness that Mulford said is “really moving the needle for customer adoption of electronic payments.”

“There is lots of talk about the death of paper. We are seeing some of that, but we are not seeing a rapid drop-off of paper checks coming in from consumers,” Mulford said. “They are very comfortable with this vehicle. They want paper bills for their records.”

However, the environmental factor, which once service providers chose not to promote due primarily, they say, to insufficient data, undoubtedly is important for both consumers and billers today.

AT&T said its eBill portfolio underscores the company's commitment to sustainability initiatives, including its advisory role and membership with the PayItGreen Alliance, an alliance of financial institutions and billing companies that encourage consumers to make financial transactions via the Web. According to the PayItGreen Alliance, if 20 percent of U.S. households switched to electronic bills, statements and payments, it would save more that 151 million pounds of paper, avoid the creation of nearly 1.5 billion gallons of wastewater, eliminate the production of nearly 4 billion pounds of greenhouse gases and avoid the use of nearly 103 million gallons of gasoline each year.

It looks like they have their data now.

A recent Forrester Research survey found that 48 percent of consumers selected "It's better for the environment" as the top reason why they stopped receiving paper bills.

The bottom line, Mulford said, is that the need to manage and process all this paper is becoming a nightmare for service providers who are looking for the full efficiency of electronic payments. “They are left with the need to cut costs and improve the productivity of the organization while still having a full suite of options for billing and payment.”