According to research conducted by PSI Global, an NFO Worldwide company, even though companies want to switch from paper-based to electronic bill payment and presentment (EBPP), consumer interest still hasn't caught on.
According to PSI Global's research, just seven percent of U.S. households reported that they could receive and pay bills via the Internet within six to 12 months. Only 16 percent say they would like to use the Internet both to receive and pay bills within the next three years.
But, the bigger question billers need to answer is, "How fast will consumers actually accept EBPP services when they become available?" PSI Global estimated that up to 15 percent of U.S. households are likely to be immediate adopters. "We also believe that a demand-push scenario on the part of billers will yield the most tangible results," said Beth Roberston, vice president and director of billing and payment research at PSI Global.
It's not all bleak for EBPP proponents, though. Robertson continued, "The good news for billers is that close to 50 percent of U.S. households already have PCs, and more than a third of these PC owners actively use financial management software. The infrastructure is in place for large numbers of consumers to accept EBPP, the next logical step beyond online banking and e-commerce."
What Will Make Consumers Switch?
According to PSI's research, the most likely agent to drive change from paper-based billing to electronics is, no surprise here, the potential cost savings for the leading billers. Since a few industries, namely lenders, utilities, insurance companies, and credit card issuers make up more than 80 percent of the 15.9 billion bill payments, these billers could profit, and big!
Implementation plans for EBPP services must address several factors, including privacy and convenience issues, and the fact that consumers know and trust their current payment methods. For example, PSI Global's U.S. Billing & Payments Program found that 63 percent of households believe that receiving and paying bills using the U.S. Postal Service is more reliable and secure than electronic delivery options. Additionally, 74 percent like the privacy of paying bills by check and 72 percent like the convenience of paying bills by check.
The PSI Global research also found that consumers' concerns about control and security are the most important factors affecting the use of electronic bill payment alternatives. A quarter of households believe that the Internet is not secure, and 65 percent are not certain about Internet security. For nearly half of all households, retaining control of payment timing is important.
PSI Global, an NFO Worldwide company, is a marketing information firm focused exclusively on financial services. For more information, visit NFO Worldwide on the Web at www.nfow.com.
Copyright © The Green Sheet, Inc., 1999. All rights reserved.
First Published November 1, 1999
