Research and Markets: Current trend towards online bill paying reveals gaps in the market?

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com) has announced the addition of 'Online bill payment: The road to increased profits' to their offering.

There are two main online billing models: biller-direct and consolidated. In the biller-direct model, the biller--i.e.,

a utility, telecom service provider, credit card company--presents bills and statements on its own Web site. In industry parlance, this service is known as electronic bill presentment and payment (EBPP). In the consolidated model, a third-party--usually a financial institution or an Internet portal--collects billing information from multiple billers for presentation on its own Web site. For a consolidator to offer EBPP, it must receive detailed billing statements from original billers. If it has this capability then it is known as a thick consolidator. If instead it can only offer a summary statement, then it is referred to as a thin consolidator.

Research from the first half of 2004 by ComScore Networks of consumers with direct deposit accounts (DDA)--defined as checking, saving, checking/saving and money market accounts--at the top 10 US retail banks uncovered significant data related to online bill payment. Consumers pay less than 2% of their online bills at an Internet portal. All other online bills are paid at either a biller's or financial institution's Web site. Between these two options, bill pay at financial institutions represents just 16% of online bill payers. Though these customers account for 38% of total payment dollars and 43% of all payments. Forrester Research forecasts that this year nearly 16 million US households will pay a bill online at a biller's site compared to 12 million at a consolidator's site. Forrester's data show that from 2004 to 2008, the biller-direct model will grow at a 9.3% compounded annual growth rate while the consolidator model will growth at a slower CAGR of 7.1%. Of significance is the overlap caused by households that pay some bills at biller sites and others at a consolidator site. This suggests that many consumers will choose to exploit the best features of each bill pay option as needed--such as the capability of timing a last-minute payment at a biller site.

This report analyzes the burgeoning electronic bill presentment and payment (EBPP) category, and the many opportunities it provides for businesses to target marketing campaigns, collect customer data and communicate directly in a real-time, interactive environment with customers. All of which help to retain and deepen relationships with customers.