A growing number of billers are piggybacking on the popular green marketing trends to encourage people to switch to electronic statements, and some are being more aggressive than others about it — charging fees for paper statements or even eliminating them. But without these monthly invoices, many people are going straight to the billers' sites to pay bills they once paid through their banks.
Banks and tech vendors say revamped e-bill services can stem these defections.
SAFE Credit Union in Sacramento has paired personal financial management systems and e-bill presentment to make its bill-pay service more useful to members.
"Obviously we don't want them going to biller direct," said Tarrah Palomino-Prim, SAFE's e-commerce manager. "We want them coming to SAFE's website."
E-bills, electronic invoices delivered to customers through their banks' websites, have been around for years but the concept has never really caught on with consumers.
Palomino-Prim said her credit union's service can solidify its relationships with its members and boost cross-sales.
"A lot of people don't understand what an e-bill is yet," she said, but those who do "are clearly more profitable. I think bill pay is one of the stickier products that we have in our basket of goodies. E-bill extends that stickiness."
The credit union uses Intuit Inc.'s FinanceWorks PFM software. Incorporating monthly billing data into the application helps people better manage their money, and the combination lets SAFE make bill presentment more conspicuous within its online banking interface, Palomino-Prim said.
SAFE and Intuit are not the only companies using PFM to promote bill presentment. Fiserv Inc. prominently features e-bills in the default configuration of its Corillian Online PFM software.
The Brookfield, Wis., banking technology company said it did this after a 2008 experiment that put bill presentment on the front page of an online banking site rather than burying it as a feature within its bill pay pages.
In the first week after the company gave e-bills such prominence, enrollment in the service jumped 145% a day, and it stayed above the 100% mark for several weeks thereafter.
Banks and billers have long competed for consumers' bill-payment transactions, and a number of observers say paper statements gave banks an edge — consumers typically accumulate several throughout the month and then pay all of them at once, through a bank's site.
But without the details on the bill — the amount due, for example — many consumers must visit the billers' sites.
Banks' e-bill services face increased competition from billers, which are trying to persuade their customers to receive their monthly statements electronically instead of in teh mail.
American Express Co. has taken what might be the most active approach: last year it eliminated paper statements to customers of its global commercial card business, which had 7.1 million cardholders as of April 2009. As a result, about half of those customers quickly began paying their bills electronically, a company spokeswoman said, and nearly all of them did so through Amex's website.
This year, Alliance Data Systems Inc. began charging its retail store card users a dollar for each paper statement they receive, though the operator of private label store card programs said it is too soon to tell how this has changed customer behavior.
Fidelity National Information Services Inc. has incorporated alerts into its e-bill service to help banks notify people about their monthly payments before the billers do so.
