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More Consumers Embracing Online Banking, Bill Pay

US Banker  |  June, 2010

Four out of five U.S. households with Internet access now bank online, according to the results of a recent Fiserv Inc. survey.

The Consumer Billing and Payment Trends study, a January online survey of 3,029 U.S. consumers age 21 and older, also found continued growth in online bill payment and use of electronic bills. The data also suggests the online bill-payment population has changed significantly during the past nine years, Geoff Knapp, Fiserv vice president, online banking and consumer insights, tells PaymentsSource.

The evolution of online banking and bill payment has produced deeper relationships between banks and customers because consumers who use the services tend to use more of the financial institutions’ products and offerings, according to Knapp. Such consumers are also less likely to leave the bank, according to Fiserv.

Nearly 72.5 million U.S. households with Internet access, or 80 percent of total households, now bank online, up 4 percent from 69.7 million that did in February 2009, when Fiserv conducted its previous trends survey. Nearly 36.4 million households pay bills online, up 11.7 percent from 32.6 million a year ago.

Women have edged out men (51-49 percent) as the primary payers of bills online. As recently as 2002, men represented 61 percent of bill payers online.

In terms of demographics, online bill payment has moved into the mainstream and is used by more than just young, tech-savvy consumers. This year, consumers in the 21-to-34 segment are 28 percent of online bill payers, while those 35-54 represent 48 percent. Those older than 55 represent 24 percent of users.

Fiserv’s survey also found a decline in the use of paper checks and growth in electronic bills.

Consumers now use paper checks to pay 26 percent of their bills; in 2000, checks represented 61 percent of all bill payments. Consumers also now pay 45 percent of their bills online, up from 12 percent in 2000, according to the study. And the percentage of consumers who receive bills electronically has increased to 33 percent from 24 percent in 2009.

This year, 13 percent of consumers who use online banking are more likely than the average customer to have a savings account at the same institution, up from 8 percent who were in 2005. And nearly half of respondents who pay bills online said they were less likely to switch institutions because of their positive experience with the service.

Fiserv’s survey also looked at the growth in such new areas as mobile banking and person-to-person payments. This year, 30 percent of respondents with mobile phones conducted one or more banking services using their phones, up from 23 percent who did in 2008. The percentage of mobile-banking users who receive or pay bills using their phones jumped to 30 percent this year from 18 percent in 2008, primarily because more consumers have smartphones, Fiserv says.

More than half of respondents who sent funds to friends, family or others used an online payment service, the survey found.

- PaymentsSource


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