Ebilling Retains Customers, Increases Profits

According to a new study with Qwest Communications, Fiserv and Aspen Analytics, electronic billing clearly benefits that bottom line. By analyzing the customer bill payment

Habits of more than 8 million people over an 18-month time period, the study revealed that how customers receive and pay bills has a big effect on churn and profitability.

Findings from the study are that customers that use ebilling are:

• 12.5% less likely to leave the provider

• 35% more likely to pay promptly and completely

• purchase 20% more services than those who don’t use ebilling

Automatic, recurring payment users are:

• 14% less likely to leave the provider.

• 86% more likely to pay bills on time.

Consumers who use both e-bill and recurring payments are more loyal and more profitable than other customer segments. Companies should deliver ebilling both via from company websites and also through financial institution bill payment portals that allow consumers to log on and pay bills through online banking.

Online Bill Pay Reducing Mail Volume

Online bill payment is affecting the US Post Office. As more consumers pay bills online, fewer bill payments are being sent by mail. And more and more customers are opting to receive invoices by email, eliminating the need to mail out paper invoices.
The preference for internet bill pay and electronic invoicing helped contribute to the drop of 13% in mail volume, or a reduction of almost 26 billion pieces of mail in 2009. The Postal Service expects 2010 mail volume will decrease by an additional 11 billion pieces.
Other factors that affect the decrease in mail are that more people are receiving government benefits by direct deposit rather than mail. And more people than ever are turning to the internet to make purchases and get information on goods and services, which has led to a steep decline in direct mail marketing and catalogue sales.
The US Postal Service is doing what it can to reduce costs but still posted a loss of $3.8 billion for 2009 fiscal year. The Postal Service plans to cut the equivalent of 53,000 workers through attrition and reassignment. Plans are also in the works to cut mail service to from 6 days to 5 days a week.

NACHA Targeted by Phishing Scam

NACHA is the rules governing organization for the ACH network. The organization has been receiving reports about a scam being perpetuated that consumers and businesses must avoid.

The scam is a classic phishing scheme. Emails are sent to both individuals and companies that appear to have been sent by NACHA. But, the emails are fraudulent since NACHA never sends out such transmissions.

The title of the email is “Rejected ACH Transaction.” The body of the email has a link to a website that looks like the NACHA site but is a fake site. When the recipient clicks on the link, a virus with malware is downloaded to the unsuspecting victim’s computer.

Once downloaded, malware can be used to silently invade the victim’s computer and steal passwords and logins into online banking sites. Malware can also be used to track key strokes and allow hackers to login to the online bank sites by taking over the computer system without the knowledge of the user.

Once malware infects a computer, special software is necessary to remove the code. Or, the entire system may need to be cleaned and reinstalled. Businesses and consumers must always be sure to have the most current versions of anti-virus software installed and keep them automatically updated. Operating systems and software applications security patches should also be updated automatically.

NACHA Targeted by Phishing Scam

NACHA (www.nacha.org ) is the rules governing organization for the ACH network. The organization has been receiving reports about a scam being perpetuated that consumers and businesses must avoid.

The scam is a classic phishing scheme. Emails are sent to both individuals and companies that appear to have been sent by NACHA. But, the emails are fraudulent since NACHA never sends out such transmissions.

The title of the email is “Rejected ACH Transaction.” The body of the email has a link to a website that looks like the NACHA site but is a fake site. When the recipient clicks on the link, a virus with malware is downloaded to the unsuspecting victim’s computer.

Once downloaded, malware can be used to silently invade the victim’s computer and steal passwords and logins into online banking sites. Malware can also be used to track key strokes and allow hackers to login to the online bank sites by taking over the computer system without the knowledge of the user.

Once malware infects a computer, special software is necessary to remove the code. Or, the entire system may need to be cleaned and reinstalled. Businesses and consumers must always be sure to have the most current versions of anti-virus software installed and keep them automatically updated. Operating systems and software applications security patches should also be updated automatically.

PayPal Platform X

Paypal has a winner with the new Platform X developer platform. New API’s allow developers to convert awards to cash, process business-to-business payments, enable price-comparison portals to process payments, currency conversions, and permit person-to-person payments through online banking. The company is introducing new pricing early next year for ACH payments for applications such as rent, payroll, and government payments. The pricing will be either 50 cents or 0.75% per transaction, depending on the perceived risk of the transaction. The new pricing is substantially less than Paypal’s current pricing for ACH payments. PayPal is also rolling out what is known as Adaptive Accounts. This API lets developers automate the creation of PayPal accounts within applications, particularly helpful if a buyer is not currently a Paypal customer. Paypal plans to double in size over the next 3 years. John Donahoe, CEO of PayPal parent eBay said the decision to open the PayPal platform was driven by the need to harness developers’ work in payments to meet eBay’s growth goals. Paypal President, Scott Thompson, said “What these developers are doing will supplement our R&D spend.”

Real Buyers for Virtual Goods

PlaySpan and consulting firm Frank N. Magid Associates conducted a study to determine consumer attitudes and behaviors regarding buying virtual goods.
Study results included:
• 12% of the those surveyed reported purchasing a virtual good within the year
• 46% of virtual world users and 33% of iPhone users have purchased virtual goods.
• Predominant age demographics for virtual goods purchases are males aged 12 to 24 and females aged 25 to 44.
• Racial breakdown of buyers is 16% Asian, Latinos 14%; Caucasians 12%, African-Americans 10%. and “Other” 15% "
• The majority of purchases are made directly through official item shops located either in game or virtual applications (29%), or a game or virtual world's official Web site (29%)
• 25% of buyers purchase virtual items on authorized secondary markets.
• 8% purchase on the grey market, unauthorized sellers of virtual items.
• 51% of buyers could not recall the amount they spent on virtual goods in the previous year. Of those who could recall, 27% said they spent less than $50 while 15% said they spent over $100.
Mike Vorhaus, President of Magid says "The fact that lots of people are reaching into their pocket to buy virtual goods is impressive, but even more impressive is that some of those consumers are spending considerable dollars. As this market grows, the majority of consumers will continue to spend $50 or more on virtual goods every year, and this will grow to be a multi-billion dollar market."

Cybercriminals Targeting Business Bank Accounts

The FBI has released findings from its investigation on how cybercriminals are stealing money from the bank accounts of small-mid sized US companies.

The thieves then initiate a series of unauthorized bank transfers out of the company's online account in less than $10,000 to avoid banks' anti-money-laundering reporting requirements.

The funds are sent to "money mules", who are willing participants or naive individuals recruited over the Internet through work-at-home job scams. The mules pull the cash out of their accounts, keep a small percentage of it, and wire the rest to organized criminal groups operating in countries like Moldova, Russia and Ukraine.

The deputy assistant director of the FBI's Cyber Division said criminals involved in these online account takeovers have attempted to steal at least $85 million from mostly small and medium-sized businesses, and have successfully made off with about $40 million of that money.

Companies that bank online have few of the protections afforded to consumers. Individuals are usually are made whole by their bank. Businesses, however, often must absorb the losses.

The FBI says businesses should protect themselves by conducting online banking from a dedicated, locked-down computer that is not used for everyday web browsing or e-mail. Malicious software that thieves use to steal online banking user names and passwords is usually installed when the recipient of a spam e-mail opens a poisoned attachment or clicks a link that leads to a booby-trapped web site.

But, despite the best efforts of a business to protect itself, online banking still presents risk. Companies being victimized by this type of crime often have accounts at small and regional financial institutions which do not have adequate fraud detection technologies in place. These institutions rely on layers of customer protections, such as security tokens, which can easily be circumvented by cybercriminals.