Consumers Managing Cash Flows Through Bill Payment Practices, Survey Says
A survey of U.S. households conducted by Fiserv finds that consumers are gravitating toward payment options that provide them more control and allow them to hold onto their money as long as possible. The surveyed consumers reported increased usage of online, phone, and walk-in payment methods, and 23 percent said that they change the ways they pay their bills month to month. In addition, consumers indicated that making a payment or viewing a bill are the primary reasons they visit the websites of companies from which they receive services. The survey also found that consumers who receive paperless bills are more satisfied with their service provider than those who receive mailed paper bills.
According to the survey, consumers value payment control and flexibility, particularly when they are experiencing cash flow difficulty. Thirty-eight percent of the consumers surveyed had made a late payment or missed paying a bill altogether in the previous 12 months. Fifty-seven percent of them identified the source of the late payment to be cash flow difficulties.
The survey also found growth in channels that provide consumers with greater control over the delivery and timing of their payments:
- The number of consumers who use online bill payment at the bank site increased 11 percent, surpassing auto-debit payments for the first time. This would project to mean that approximately 36 million households are now turning to the online banking channel for at least one bill payment in a given month, while 35 million use auto-debit.
- The number of consumers utilizing the phone channel increased 27 percent, to 17.4 million households in 2010. This dramatic increase is due in part to more users paying bills via their mobile phone.
- The number of consumers utilizing the walk-in channel increased 16 percent, to 27 million households in 2010.
- In the previous 12 months, 34 percent of consumers used a credit or debit card to make a one-time bill payment that they normally pay by some other method, even though this meant one-third of them paid a convenience fee.
The survey found that consumers visit a service provider's website to make payments and view bills more often than any other activity, including shopping for products, finding educational information on a new service or learning more about the company. Seventy-four percent of survey respondents visited one of their service provider's website in the previous six months and 66 percent said doing so helped them avoid calling the company.
Of the consumers who visited their service provider's website in the previous six months, 66 percent did so to pay a bill and 48 percent accessed their monthly bill or viewed payment history.
The survey found that consumers using paperless billing, in which they receive an electronic version of their bill online at either the company website or their financial institution website, are more satisfied with their service provider than those receiving paper bills in the mail.
Thirty-four percent of those who received paperless bills (e-bills) at a company website said e-bills improved their relationship with the company. Thirty-seven percent of those who received e-bills at a financial institution website stated that e-bills improved their relationship with the company from which they received the bill, and 33 percent indicated electronic billing made them less likely to switch to a competitor. Further, 58 percent of respondents said the environmental impact is an important aspect of their decision to view and pay bills electronically, unchanged from last year.
The study provides good news for billers seeking higher paperless billing adoption rates, particularly when offering e-bills through financial institutions. Thirty-three percent of all consumers who pay a bill at their financial institution's website, or 12 million households, also receive at least one e-bill there, up from 24 percent in 2009. In addition, almost 36 percent of non-users expressed interest in trying e-bills.
The Fiserv-sponsored online survey, conducted in March 2010 by The Marketing Workshop, reflects the responses of 2,001 adult consumers who are responsible for paying their household bills.
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