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E-BILLING
E-Payments: The Latest Trends in Customer
Preferences
In the June issue of
e-Business Officer Update,
we pointed out the fact that college campuses
are leading the way in electronic payment usage.
Higher education institutions report electronic
payment usage rates of over 65%1.,
well above the 49% average for electronic
payment of recurring bills today.2.
This is a development for business officers to
be pleased with, but it does not tell the whole
story. What business officers are actually
experiencing is something that is quite
different: their payers are using a wide range
of payment methods (paper checks, credit card,
debit card, ACH) and a wide range of payment
channels (in-person, snail mail, IVR, live phone
and online). This dichotomy is supported by two
major studies on electronic payments discussed
in this article.
 Forrester Research3. reports that the GenYers (born 1976 to 1990: YOUR student
population) will fuel electronic bill
presentment and payment (EBPP) growth and
dominate online bill payers by 2010 at 39% of
total. In contrast, the Boomer generation (born
1946 to 1963: YOUR students’ parents) will
account for only 28% of online bill payments by
2010.
Further, the American Bankers Association
Payment Preference Study reveals that even
today, usage of bill payment methods vary
significantly by age. The most extreme examples
of this are reflected in the usage of checks
by the under 35 age group: 60%, versus the 55
and over age group: 79%. A similar, near
20-point difference is seen in making electronic
payments on an online biller website (which
equates to payment of a tuition bill on a
college website). Thirty seven percent of the
younger group make electronic payments
comfortably, yet only 15% of the 55 and older
group do so.
This translates directly to the experiences in
the billing office. Institutions may be
observing outstanding usage of online bill
payments from their students, yet wonder why the
billing office staff is still handling
over-the-phone payments from parents.
Perhaps most telling, when consumers were asked
why they will increase their online bill
payments in the future, the top reason cited was
psychological
and behavior-oriented:
“I am More Comfortable Using Online Bill
Payment” stated 54% of the ABA Consumer Payment
Preference respondents. This suggests that the
most effective way to increase parents’ usage of
your online payment choices is to provide them
with initial support, e-payment demonstration,
and reinforce the “how-to” message in the
simplest terms over and over again. Learn how to
fashion your message and reach your parents in
the related
e-Business
Officer Update
Marketing article entitled “How
to Create Consumer Comfort around E-Payment and
E-Billing”.
1.
Best Practices in Billing Communications,
RC Communications, March 2006.
2.
American Bankers Association/Dove Consulting
2005/2006 Study of Consumer Payment Preferences
3. Forrester Research, EBPP Forecast:
2005-2010, October 10, 2005 |
