Consumer Bill Payers Want Incentives To Go Electronic

Posted by Mark Brousseau

Consumers pay a lot of bills, and they pay those bills in myriad combinations of channels and methods. Consumers’ bill pay behavior isn’t a trivial matter—changes in behavior can result in millions of dollars of additional or lost revenue, or millions of dollars in cost savings.

Despite the increasing popularity of the Internet and the emergence of the mobile channel as a way to transact and interact, checks sent through the mail remain the most prevalent method for paying bills in the United States.

Aite Group says the number of bill payments made through the mail will fall just short of 5 billion for 2010, accounting for about one-third of all payments made, whereas payments made at a biller site—including recurring and mobile payments—will account for 23% of all bills paid in 2010.

Looking to the future, however, consumers’ bill pay behavior is very likely to change, Aite Group predicts. Roughly four in 10 consumers say they would change how they pay their bills if they received rewards for paying with a debit or credit card, or received a cash incentive for changing their behavior, the research and advisory firm reports. In addition, the rapid adoption of smartphones will help drive bill pay behavior change over the next three years.

“There’s an emerging segment of consumers—which we call Smartphonatics—that will lead to an increase in the use of the online and mobile channels for paying bills,” says Ron Shevlin, senior analyst with Aite Group. “These young and affluent consumers are chomping at the bit to use their smartphones, and are very likely to change how they pay bills if it becomes easier to do so via mobile. The growth of biller-direct over consolidator, coupled with the projected growth in mobile payments, means an opportunity for bill pay solutions providers to create an industry-leading mobile platform.”

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