Electronic bill payment traffic increased 138%, to 270 million transactions, from 1996 to 1997, according to preliminary findings of a Coopers & Lybrand LLP study.
The findings were presented this week at the National Automated Clearing House Association's Electronic Commerce '98 conference in Anaheim, Calif. The complete study will be released in six weeks.
The study-which counts payments originated through personal financial management software, Web sites, and phone-based billing services-estimated that 1997 transactions were worth $65 billion, up 129% from the prior year.
Mark K. Webster, senior manager at Coopers & Lybrand, said the findings suggest bill payment sits on the brink of general acceptance.
"I think we are reaching critical mass," Mr. Webster said. "You have a whole generation of kids coming, where PCs and electronics are second nature."
Coopers & Lybrand based its survey on interviews with 50 of the nation's top payment processors.
Chip Wickenden, chairman of the clearing house association's bill payment council and electronic commerce manager at NationsBank Corp., said the survey quantified what many in the industry had been guessing for years.
"Now, no one will fudge the percentages anymore," he said. "We are all starting out on the same page."
The volume growth is promising for banks and for providers of payment services such as Checkfree Corp.
But many billers are less than thrilled at the current state of on-line bill payment, Mr. Wickenden said.
More often than not, "electronic bill payment" ends with the payment processor's cutting a paper check and sending it to a biller. Often the check is a large one that covers a number of payments and requires an explanatory list.
This so-called check-and-list process creates exception transactions for billers. The study estimated that 60% of all electronically initiated payments are paid with paper checks.
Further, accepting electronic payments can be complicated because payment networks have differing technical approaches.
"One of the challenges that billers face is in the remittance arena," said Bernard T. Lyons, treasury manager at AT&T Universal Card Services and a member of the clearing house association's bill payment council. "The challenge is in finding systems resources to enhance our ability to receive payments electronically."
Mr. Lyons said his company has experienced "a good deal of growth in the last year in electronic payments. We will take the payments and apply them as efficiently as we can."
However, he added, "we are better equipped to deal with this challenge than some of these smaller merchants, who are having a hard time with it."
Mr. Webster concurred in this view of the market. "There are still a lot of small merchants out there who will not accept electronic payments," he said.
Industry officials agreed the lack of a single standard hinders electronic bill payments but that the issue is being resolved. Microsoft Corp. and Integrion Financial Network have agreed to work to make their standards compatible.
The study also found that bill payment processors generally are interested in expanding into on-line bill presentment.
"With presentment, you control more of the payment aspects," Mr. Lyons said.
The study excluded the more than one billion electronic debits that billers made last year via the automated clearing house network.
