Electronic Bill Payments Continues to Soar

Research firm Aite Group predicts that electronic bill payments will account for 11.4 billion transactions in 2009 compared with 10.3 billion payments made by other means. By 2012 forecasts are that various electronic channels will capture 64% of consumer bill payments versus 32% for mail and 4% for in person payments.

Findings show that consolidator bill payment sites had a compound annual growth rate of 20.3% from 2004 through 2008. Forecasts are for13.1% growth rate for 2008 through 2012. However, most consumers consumers still prefer to pay bills directly by biller’s website rather than going through online bill payment system at their banks.

Consumers reported they did not like paying to pay their bills through their bank. They were already paying bills and did not like the additional charges placed on them by their banks.

The banks lost a good window of opportunity at the beginning of electronic bill payment when they were trying to squeeze money out of their consumers. Consumers wisely decided not to use their banks, instead, opting to pay directly at the biller’s site.

It would have been wiser for banks to give away the bill payment service in exchange for new revenues to be gathered from promoting other products when consumers came to pay their bills at the bank sites. The banks, in their eternal greed and lack of concern about consumers, ultimately are the losers for online bill payment. It is unclear how a bank can now capture consumers back to paying bills on a bank site when behavior has already been ingrained in consumers’ habits to go elsewhere to pay bills.