New bill payment guarantees and functionality, coupled with lower fees, are beginning to resonate with more active online bankers. Yet, despite these significant enhancements, Gomez sees numerous remaining opportunities for banks seeking to build consumer adoption and usage of online bill payment. Among best practices that go the extra mile in making online bill payment valuable to all customers, banks should:
1. Promote Faster Payment Processing Timeframes
Just four out of 30 Scorecard banks promote two-day delivery for electronic bill payments, while nearly two-thirds encourage customers to allow five business days. The result is that online bankers see little differentiation between checks and online bill payment (except possibly better float with checks) and little benefit from electronic versus paper settlement of their online bill payments.
In promoting faster processing timeframes, banks must first illustrate that electronic payments will process faster than mailed payments. Ideally this information is communicated at the time of payment, so customers understand how a payment will be settled.
Separate from clear disclosure of electronic vs. paper, banks have an additional responsibility to guarantee the faster timeframes for electronic payments. Gomez currently recommends an industry-leading two-day guarantee for all electronic payments. Customer service representatives will often inform customers that electronic payments will arrive more quickly than paper payments. However, it is critical that the bank's online messaging and guarantees support these faster processing times. Bank of America, for instance, differentiates between paper and electronic payments and guarantees two business days for electronic payments.
2. Clearly Disclose Status Of Open Payments
Most Scorecard banks operate on a good funds model for online bill payment, meaning that customers often have no indication when a paper payment is actually received or cashed by the payee. Though 60 percent of Scorecard banks reveal information about the status of sent payments, only a few clearly disclose the "open" status of paper payments that have yet to clear. One strong example is Citibank, which differentiates among future, historic and open bill payments, allowing customers to view payments based on status. Furthermore, customers can elect to receive e-mail alerts regarding payments that haven't cleared after 15 days.
3. Bring Bill Payment Out Of The Vacuum
Online bankers should never have to cope with the reality that bill payment may be provided by a third-party, yet bill payment implementations at most banks make it impossible to ignore. Gomez has previously warned the industry of the potential drawbacks in not maintaining navigational consistency between bill payment and the rest of online banking.
However, beyond navigational issues, the dependence of most banks on bill payment vendors has resulted in a prevalence of bill payment offerings that look, feel and operate distinct from online banking. Problematic examples include banks that maintain two separate secure "mailboxes," only allow customers to send and receive secure messages pertaining to online bill payment and require that customers change their address separately because the CIF doesn't update the bill payment file.
Additional integration challenges stemming from the use of a bill payment vendor may involve the presentment of bill payment details (such as "memo" fields) within the transaction history and the display of balance information when customers initiate payments online.
The plethora of marketing messages and promotions surrounding online bill payment confirm that banks are focused on turning customers into online bill payers. However, encouragement can only take banks so far. To develop a base of loyal, satisfied online bill payers, banks must deliver a quality bill payment experience and alert customers to the improvements. Integrating bill payment and enhancing processing timeframes are key to this success. Without these efforts, banks risk lower adoption and satisfaction rates among online bankers and bill payers.
Moriah Campbell-Holt is a senior analyst following the online banking and payment services space at Gomez, Inc., an Internet benchmarking and improvement strategies firm in Waltham, Mass., www.gomez.com.