Community banks and credit unions using Picture Pay, a mobile photo bill pay solution from Allied Payment Network, have seen impressive growth rates in transactions and are attracting mobile-first customers, according to data released this week.
Since November 2011 when Allied introduced Picture Pay, which is driven by Mitek's mobile photo bill pay technology, the company has signed up 12 client community banks and credit unions. Those institutions are seeing month-over-month growth of 5 to 15% in bill payments with the solution, according to the data released by Allied and Mitek. One client credit union has seen growth rates as high 25% month-over-month in users and payments, says Ralph Marcuccilli, Allied Payment Network's president and CEO.
"Traditional mobile pay has seen anemic growth because of the inconvenience of having to type in all of the payment information. But if banks can't translate online bill pay to mobile, then they will risk losing their customer relationships," Marcuccilli warns.
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With Picture Pay customers don't have to type in payee information to make a payment, as Mitek's technology automatically populates that information from a picture of the bill. The solution also saves payee information for future payments, which helps create sticky relationships, Marcuccilli notes.
"Once a payee is set up, the customer doesn't need to re-enter their information in the future. We hear from a lot of end-users that they really like that," he adds.
Many Picture Pay users didn't use bill pay before with the bank. Nearly 50% of end-users for Picture Pay were not using their institution's online bill pay service, meaning banks using Picture Pay now have an opportunity to increase retention among those customers, Marcuccilli says .
"Banks average in the 80's for retention, but with bill pay that rate goes up by 10%," he explains. With the ability to electronically store payee data with Picture Pay, the bank now has the customers file cabinet stored electronically, making that relationships even more sticky, he adds.
The solution has also had increased use among mobile-only customers who don't use online banking, Marcuccilli says. For banks mobile bill pay is the only way to develop those sticky bill pay relationships with these customers, who are mostly younger Gen Y customers. The number of mobile-only customers using Picture Pay has increased from 15 to 20% since this past August, Marcuccili shares.
Picture Pay has also benefitted the bottom lines of banks and credit unions offering the solution in a number of ways, Marcuccili adds. Allied Payment Network has same day payment set up with many of the large national billers, he says. This allows customer banks and credit unions to offer expedited payments with the solution, for which they usually charge anywhere from $5.95 to $9.95 per payment, he notes. This allows banks to derive extra revenue from their checking relationships.
And the solution also helps banks cut down on check-processing costs by reducing the number of checks written by their customers. Many of the bills paid by Picture Pay users who don't use online bill pay were being paid by check, Marcuccilli observes. Those transactions are now being done more cheaply through the mobile device. Allied has also seen a high number of one-time payments made with Picture Pay, usually medical bills that used to be paid with checks.
"Users didn't go through the trouble of setting up online bill pay for one payment, so those payments were being done by check. But now we've made it simple enough to start bringing those customers into digital payments," Marcuccilli says.