With Americans taking a closer look at their mail, it might be a good time for electronic billing and payment providers to convince consumers to change their long-established routines. But that appears unlikely for the time being.
According to research by Gartner, 32 million Americans will view credit card and other statements online by the end of 2001. This is a 60 percent increase over the 20 million who did so at the end of 2000. Gartner expects the number of consumers viewing bills electronically to reach 64 million by year-end 2003.
Companies in the market for electronic bill payment and presentment have been marketing their products to consumers for several years, but Gartner clients have reported a 20 percent increase in electronic bill presentment enrollment since the first anthrax scare was reported in the United States.
“Even without newly emerging mail safety concerns, we have found that electronic billing has finally started to take off in 2001,” said Avivah Litan, vice president and research director for Gartner. “One major factor unrelated to recent events is that credit card issuers have been very successful at attracting consumers to online account management by giving them value-added services like daily balances and responsive self-service.”
According to a Gartner survey, consumer preferences differ when choosing how to receive and access bills online. Options for service range from the Web sites of banks and brokerage firms to popular portals such as America Online, Yahoo and Quicken.com. More than 48 percent of consumers prefer going to their billers’ Web sites directly to access and pay bills, while 24 percent prefer to receive a consolidated set of bills at their bank’s Web site.
“The billers have done the best job in providing easy-to-use services, while banks and other service providers who aggregate consumer bills still have a long way to go in providing comparably easy services,” Litan said. “Although recent events are providing customers with more reasons to start accessing their bills online, the barriers to getting started are still too high for most consumers.”
EMarketer’s “Electronic Payments Report” found that vendor consolidation, incentive programs and overall awareness campaigns are necessary in order for consumers to truly embrace e-payment technology.
“Businesses and consumers are warming to the idea of electronic bill payment, but billers and their payees will continue to use traditional transaction methods for some time to come,” said Noah Elkin, senior analyst at eMarketer. “For businesses, it comes down to a question of priorities: will spending money to adopt electronic billing applications have as much effect on the bottom line as other e-business implementations? For consumers, it boils to down to questions of convenience, and until all their bills are available online, they are unlikely to change their existing payment habits en masse.”
EMarketer expects the B2B market for electronic payment will prove to be far more lucrative than the B2C. Between 84 percent and 98 percent of B2B invoicing involves some degree of paper processing, meaning there is a huge potential for businesses to streamline processes and realize cost savings in the future.