Adoption

• Nearly 30 percent of U.S. consumers now say they pay bills online, the largest share ever recorded in the four years since the American Banker/Gallup Consumer Survey first asked this question. (American Banker/Gallup Consumer Survey, October 5, 2004)

• By 2007, 65 million U.S. adults will view their bills online, of which 65 percent will use a blended biller direct and bank aggregation model. ("EBPP Future Blends Direct and Bank Aggregation Models," Gartner, January 13, 2004)

• Thirty-five million U.S. consumers are paying bills online, and that number is expected to increase to 65 million by 2007. ("EBPP Future Blends Direct and Bank Aggregation Models," Gartner, January 13, 2004)

• A new study by Celent Communications predicts that online bill payment, as a percentage of all bill payment methods, will increase from 10 percent in 2003 to 29 percent in 2007, to the detriment of paper checks, which will fall from 59 percent to 29 percent over the same time frame. (eMarketer, November 18, 2004)

• Online banking usage jumped 47 percent in two years, reaching 53 million people in November 2004. On a typical day online, 13 million Americans are performing banking chores over the Internet, a 58 percent jump from late 2002. Those with broadband connections at home were far more likely to have tried online banking: 63 percent versus 32 percent of those with dial-up connections. (Pew Internet & American Life Project, "The State of Online Banking," February 2005)

• Between 2004 and 2007, Celent predicts that consumers will increasingly favor paying bills through their bank – the number of bill payments conducted through bank Web sites will increase at a CAGR of 34 percent in this time period, compared to a CAGR of 28 percent for payments made through a biller’s Web site. However, more people will pay bills online through biller sites than through banks in 2007, just like in 2004, despite banks’ gains. (eMarketer, November 18, 2004)

• Thirty-one percent of female respondents to the survey pay bills online, versus 27 percent of the men. Forty-four percent of those 18 to 24 do so, but only 21 percent of those 65 and older. And not surprisingly, more households with annual incomes over $75,000 pay bills online than those making less than $20,000 (41 percent versus 21 percent). (American Banker/Gallup Consumer Survey, October 5, 2004)

• In a study conducted by Javelin Strategy & Research, 53 percent of respondents had paid a bill online in the previous month – up 16 percent over the same time in 2003. (Javelin Strategy & Research, "Online Finance Household Update: Image is Everything," June 2004)

• Wachovia saw a spike in its active bill-pay subscribers when it dropped its monthly $4.95 fee in November 2004, going from 483,000 active bill pay customers at the end of 2004 to 540,000 by the end of March. (Cincinnati Business Courier, May 23, 2005)

Decline of Checks

• Last year, consumers wrote 36.7 billion checks, down from 41.9 billion in 2000, a 12 percent drop, according to a study by the Fed. The association study also found that, for recurring bills, use of checks fell to 60 percent in 2003, dropping 72 percent since 2001. (Bankrate.com, December 8, 2004)

• The decline of checks’ share of total consumer bill payments will accelerate in the coming years. This figure currently stands at 53 percent and should plummet to 29 percent by 2007. (Bank Technology News, November 16, 2004)

Cost Savings

• On average, it costs banks at least 11 cents to process a check, versus as little as three cents to process an electronic payment, according to Avivah Litan of Gartner Inc. (Atlanta Journal-Constitution, January 2, 2005)

• At the beginning of 2004, TowerGroup found that 78 percent of the top 50 U.S. banks and thrifts offered online bill payment services free to some or all of their customers. (Bank Systems & Technology, November 23, 2004)

Convenience

• Bank of America cites several reasons for continued growth of online banking, including a top three of:

  Around-the-clock access to account information – 64 percent)

  Convenience – 54 percent

  Time savings – 48 percent

(Local Tech Wire, December 29, 2004)

• Fifty-five percent of the payments CheckFree processes today can be received by the biller either on the same day or the next day. (CheckFree, November 1, 2004)

• In a survey conducted by CheckFree Analytic Research Services with The Marketing Workshop and Harris Interactive (July 2004), consumers who received and paid their bills online through their bank, credit union, brokerage or Internet portal ranked the top benefits of the service. The biggest benefits were:

  Make sure bill is paid on time – 32 percent

  Convenience – just click and pay – 22 percent

  E-mail reminders – 15 percent

  Saves time paying bills – 10 percent

Safety & Security

• Victims of identity theft who detected the crime by monitoring accounts online experienced financial losses that averaged $551, versus an average loss of $4,543 when detected the crime via paper statements. ("2005 Identity Fraud Survey Report," Javelin Strategy & Research, January 24, 2005)

• The most frequently reported source of information used to commit identity fraud is a lost or stolen wallet or checkbook. Computer crimes accounted for just 11.6 percent of all known-cause identity fraud in 2004. ("2005 Identity Fraud Survey Report," Javelin Strategy & Research, January 24, 2005)

Environmental Impact

• Annually, more than 405,000 trees must be felled to let consumers know how much they owe their local phone company. Approximately 23,280 tons of paper are used annually just to bill U.S. residential phone users for single lines of service. (Telephony Online, June 16, 2003)

• If Americans viewed and paid bills online it would save 18.5 million trees per year. (Javelin Strategy & Research survey of 2,877 online households, April 2003)

Benefits to Banks

• Consumers who receive their bills at a bank site are 1.5 times less likely to quit the bill payment service than customers who only pay their bills. And bill-presentment customers are twice as active in making payments as consumers who only pay bills online. (CheckFree Analytic Research Services, Digital Transactions, November 1, 2004)

• Sixty-two percent of consumers who receive their bills at a bank site report a satisfaction level of 9 or 10 (on a scale of one to 10) with their bank while only 55 percent of those who pay bills online report levels that high. Only 41 percent of those who actively bank online but do not pay bills online report high satisfaction levels. (CheckFree Analytic Research Services, Digital Transactions, November 1, 2004)

• A study by Celent of large banks offering bill-payment services found that 48 percent said bill payment had clearly helped them with customer retention while another 33 percent said bill-payment customers do stay with the bank longer, but they were not able to prove that bill payment is a factor in that retention. Only 5 percent said there was no retention benefit to bill payment at all. (Digital Transactions, November 1, 2004)

• According to a study by Watchfire-GomezPro and the Ponemon Institute, people who use the online banking channel not only tend to have more trust in their bank than people who bank at their branch, but there’s a 30 percent difference between high-trust and low-trust banking customers who use the channel to pay bills. (Electronic Payments Week, June 1, 2005)

• More than 56 percent of consumers in a study by Keynote Systems said online banking and bill payment services were a very important factor in choosing a bank; ahead of such considerations as the physical location of bank branches (45 percent) and ATMs (52 percent). Over the course of Keynote research in the industry, online banking has continued to climb as a key consideration, closing in on the two leading considerations: free checking (68 percent) and fee and service charges (67 percent). ("Online Banking Critical to Bank Selection and Brand Perception," Keynote Systems press release, January 7, 2005)