Expedited Bill Payment Fees Expected to Rise

Expedited bill payment services surcharge consumers who make immediate payments on last minute bills to avoid late charges. Research firm Javelin Strategy recently announced results from its latest report on electronic bill payments. On the average, billers charge surcharges of $8 for expedited payments. These are hefty fees but still are much less than late-charges for bills which run from $20-49.

The study says about 30% of consumers made expedited payments in 2008. But, as the economic downturn continues, more consumers are expected to use expedited payments as a way to avoid late fees. The increase in demand could result in increased fees for expedited payments. Javelin estimates that charges could easily double to $16 within the next few years.

Synergistic Research reports 21% of consumers founded expedited payment fees reasonable. Another 41% found fees a little high but were willing to pay them in emergencies. And 19% complained that fees exploited customers’ situations. Another 17% said the fee were “unjustified at any level.”

Higher fees and increased consumer demand can represent an opportunity for banks to generate more revenues. The challenge for banks will be to get consumers to pay bills through online-banking sites rather than through the site of the biller. Consumer’s preference has been to pay bills on billers’ sites rather than through online banks.

Banks should consider marketing expedited payments those most apt to use the service. These include younger consumers, mobile-phone users, technologically savvy customers, and environmentally conscious consumers.