August 09, 2005, 11:44 AM — This week's highlighted research:
TowerGroup. "Shattering the myths surrounding biller-direct."
Forrester Research. "Finally, a single EBPP network for Canada."
Research and Markets. "Online bill payment: The road to increased profits."
I don't enjoy getting bills in the mail. Getting bills in my e-mail is no different. Now, the industry is all excited about online bill presentment, which is at its essence, a way for companies to send me those bills and get my money even faster. Good for the billers I suppose, but I can't see why consumers would welcome it--after all, it completely eliminates the possibility of giving out the old "the check's in the mail" excuse. Nonetheless, for those who are perhaps more responsible than I, and pay all their bills as soon as they receive them, online bill pay can arguably be a good thing for both sides.
There are two different approaches to online billing. The biller direct method allows consumers to view and pay bills directly at the Web sites of credit card companies, utilities, or other billers, and the consolidator model, often provided by banks as a service to their customers, lets consumers pay bills from multiple billers in the same online location.
Biller-direct sites have become very successful. TowerGroup takes a look at some of the myths that have led to the success of this model. Consumers tend to believe that when they make a payment at a biller-direct site, that payment is immediately credited to their accounts. Other myths include the belief that consumers can pay their bills by credit card at these sites, that the service is free, and that it offers more functionality than consolidator sites. In reality, TowerGroup discovered that only 31 percent of biller-direct sites post payments to customer accounts on the same day payment has been made, and average posting time is about the same as with consolidator billing sites. Also, only about a third of biller-direct sites allow credit card payments. And while online bill payment is often promoted as free, many billers are beginning to recognize that they can charge for additional services, such as same-day posting.