| Electronic bill payment (EBP) was long ago dubbed the "killer app" of online banking. Yet after several years of availability, household usage rates of online electronic bill payment are less than 3%, while overall use of online banking is more than twice that. And electronic bill presentment, which has been widely expected to spur EBP growth, has yet to come to market in a comprehensive fashion. Online financial applications like brokerage and lending are speeding ahead of electronic bill presentment and payment (EBPP) in both provider offerings and consumer acceptance. Although technology vendors have made great strides in the past year to promote presentment and payment models and develop solutions for banks, billers, and consumers, EBPP has still not been widely adopted.
The overall movement toward EBPP has been slowed by the number of players involved, the varied objectives of those players, and the general immaturity of technology models and solutions. Most billers are focused on reducing billing costs and speeding funds collections as the primary reasons for implementing EBPP. Yet consumers need more compelling reasons to convert from existing manual methods of bill review and payment, which by themselves are not difficult. In order to increase consumer acceptance, billers and banks need to work closely together to concentrate on customer service and marketing aspects of billing and payment.
This TowerGroup Research Note discusses the primary drivers of electronic bill presentment and payment, and the numerous remaining barriers to its full-scale implementation. It also explores the various complexities and intricacies of the numerous players involved in the billing and payment process and presents some suggestions for increasing industry and consumer acceptance of EBPP.
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