CheckFree and AT&T Mobility recently announced that AT&T would begin supporting electronic bill presentment through CheckFree-powered bank bill pay sites. AT&T Mobility’s more than 70 million customers will now be able to receive their bills electronically at their bank’s bill pay site if the bank is a CheckFree customer. AT&T Mobility joins 400 other billers who currently present bills through CheckFree’s 3,000 banks.
While this is a nice win for CheckFree, we began to wonder whether this announcement might portend some renewed momentum in the bill presentment market. So, Bryan Derman and I posed a series of questions to Lori Stepp of CheckFree, who is responsible for growing bill presentment adoption among CheckFree’s biller customers. Our conversation also digressed into the broader question of how growing bill presentment affects banks’ initiatives to grow and generate more revenue from bill payment, and how the dynamic with billers is evolving.
Billers More Open to Bank-Based Bill Presentment
Lori believes that the AT&T announcement does illustrate an increased willingness that she is seeing on the part of billers to support bank-based bill presentment. With electronic bill payment now a mainstream phenomenon, these days the Holy Grail for billers is the suppression of paper bills. As more customers agree to receive statements electronically (and pay them electronically, of course), billers significantly reduce their costs. While they have historically invested mainly in promoting their own biller direct sites to accomplish this goal, paper suppression has hovered in the range of 4-8% of all biller customers, and 8-12% for the best performers. Billers are increasingly viewing bank bill presentment as another channel through which to drive paper suppression, and achieve those cost savings.
As a key data point, Lori shared with us that CheckFree is currently seeing e-bill presentment grow at a 22% annual rate.
The Bank vs. Biller Dynamic
Another trend that we have been watching closely is the bank and biller dynamic when it comes to banks’ desire to migrate more bill payments to revenue-generating payment types. In addition, billers have been loath to forsake the relationship and marketing benefits of driving customers to their own sites. We were curious about how this dynamic is evolving, and Lori noted some interesting developments. Like other bill pay providers, CheckFree counts both banks and billers as customers, and has been actively seeking to find solutions that work for both sides.
For example, to address the consumer relationship dynamic, CheckFree offers a hybrid solution for billers who present their bills through banks. Billers may elect to deliver summary billing information through the bank channel and then seamlessly redirect customers back to their own branded website in order to view the full details of the electronic bill. This helps the biller reach customers who prefer to use their bank to pay bills (and hopefully will agree to suppress paper), without giving up important traffic to their own sites.
Lori noted that among consumers using bank bill pay to pay a particular biller, typically 15-40% will choose to receive that biller’s bill at the bank website and agree to stop receiving paper bills. She also stated that adoption levels can be influenced by whether or not the biller chooses to actively promote the bank channel to its consumers. In addition to increasing adoption through marketing, CheckFree has also developed new activation options — such as temporarily providing both electronic and paper bills — that are driving enrollments by an additional 10-15%.
And as banks increasingly seek to enable revenue-generating card-based bill payments, CheckFree has been exploring solutions that add value to both banks and billers. One idea is to tie the ability for a customer to pay with a card with mandatory paper suppression so that both banks and billers can capture economic benefits (and environmental ones as well!). This kind of “win-win” thinking could accelerate adoption and benefits for both sides.
Bill Presentment and Mobile
Another of the trends we’ve been watching here at Glenbrook is the opportunity for banks to offer actionable alerts to its customers, which include a “click-to-pay” kind of capability to help customers pay on time and avoid late fees. In some cases, those alerts could include an expedited fee paid by the customer. However, offering this capability is constrained by the relatively low penetration of bill presentment: banks need the amount and due date to offer this kind of alert. Growth in bill presentment could certainly make this “actionable alert” opportunity more feasible for banks both through email, and especially through the mobile channel where time-sensitive transactions can reach customers who log in less frequently.
Lori noted that it isn’t only banks who are attracted to the potential of expedited fees. CheckFree’s billers are also intrigued by the idea of generating fee income for expedited posting, although we at Glenbrook are skeptical that expedited fee revenue is sustainable given the fact that many billers already offer free same-day posting on their own sites.
Overall, we were encouraged to hear about some meaningful progress in the bill presentment space. We will continue to watch this space closely, especially as mobile banking matures. Actionable mobile alerts, enabled by growing bill presentment, could be an interim offering that gives customers a compelling new service that drives mobile banking adoption, which might, in turn, play a key role in eventually driving increased comfort and adoption of both mobile payments and bill presentment generally.
For More Bill Payment Stats
For more interesting data on the state of bill payment here in the US, see the recent survey data CheckFree published from its annual survey of consumers.
How Glenbrook Can Help
Can Glenbrook help you interpret and respond to the latest trends in bill payment, presentment, and the intersection with mobile?