"[You would] imagine with so many selfies that people take with their mobile phones, they would already know how to take a photo," said Alex Carriles, director of digital channels at BBVA Compass, of the difficulty in getting customers to submit usable images.

Early Adopters of Photo Bill Pay See Promise, Technical Challenges

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While banks continue to be optimistic about the potential growth possibilities of mobile photo bill pay, in which customers pay invoices by taking pictures of them, trade groups and imaging experts note the technology is not as straightforward as mobile check deposit.

In theory, it is supposed to make adding payees a snap for smartphone customers. But the feature faces technical hurdles, including a lack of uniformity of the data on physical invoices and a reliance on customers to take decent photos.

"We are in early stages. Very few banks offer it at this junction," said Doug Johnson, vice president and senior advisor for risk management policy at the American Bankers Association. "Taking a picture of a bill is substantially different than taking a picture of a check."

Sure, vendors will cross-check the data submitted with a biller database but the problem is that, unlike checks, the format, shape, size and font sizes of invoices vary wildly, making capturing data harder. There's also an added challenge banks can't troubleshoot: bad photos.

"You can't control the way people photograph a bill," said Doug Miles, director of market intelligence at AIIM, a global community of information professionals that studies imaging technology, among other things.

According to Miles, readability can be impaired depending on whether the lighting is flash or natural, the photographer's hands are shaky, the document is stained or if people are even capturing the right part of the document.

Banks using mobile bill pay said they've noticed some error-related messages linked to photo quality.

"[You would] imagine with so many selfies that people take with their mobile phones, they would already know how to take a photo," said Alex Carriles, executive vice president and director of digital channels at BBVA Compass.

But sometimes people submit images that focus on their feet or chair legs and neglect to properly capture the invoice, he said. The most common mistake: submitting the whole invoice instead of just the payment coupon. "That in and of itself is the number one error message," said Carriles. "If the picture is a good one, the results are very accurate."

The popularity of the feature is likely to turn on whether errors are too prevalent, observers said.

"If people find a lot of rejections, they will stop using it," said Miles.

But BBVA Compass, for one, remains satisfied with the results it has seen so far. Carriles said the Mitek-powered technology it uses recognizes a high percentage of bills, especially frequent invoices like cable and telephone.

"You don't need to leave the kitchen counter while talking to your wife about how her day was," said Carriles. "It's a more natural way of doing things."

BBVA Compass became an early adopter of mobile bill pay in June 2013. Customers use their smartphones' cameras to capture data such as addresses and company names from physical bills, and then confirm and schedule payments within the app. Over a year later, the bank said it is pleased with the feature's ability to let customers easily add a new payee through their smartphone.

Some within the industry believe photo bill pay will be the sequel hit to mobile deposit capture, a feature so popular that banks have to wait in line for their tech vendors to help them set up a system.

"Mobile check deposit was a slam dunk. Every [bank] has to have it," said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research. "Photo bill pay is next in line. Got a bill? Click it, shoot it, pay it and go back to drinking your daiquiri."

But so far only a handful of financial institutions, like U.S. Bank and Intuit-owned Check, have introduced photo bill pay. It is meant to help customers by removing the manual, often mistake-laden, labor of entering payee data on a tiny keyboard.

The hope for banks is that photo bill pay will also help entice consumers to become customers and deepen engagement.

"Bill pay is a critical reason to come back to the bank," said Schwanhausser.

City Bank Texas, a Lubbock-based community bank that introduced a similar feature in 2013, said the tool has wider utility than just occasional bills like the gardener or babysitter. It also encourages customers to more broadly engage in mobile banking.

"We see customers paying utility and monthly service bills, such as cell phone, with the simple 'pay again' feature," said Jim Simpson, senior vice president and chief technology officer at the $2.1 billion-asset City Bank Texas.

The pay again feature allows customers to manually adjust the amount owed each month without having to again input other information from the invoice.

BBVA Compass, meanwhile, is in the midst of updating the experience so that customers won't have to snap images; instead, they will just hover their phones over the documents to capture the information. Once enhanced, the bank plans to more aggressively advertise the service. "We've built adoption but we would love to see great adoption," Carriles said.

The planned update comes at a time when some within the industry are championing the use of barcodes on physical bills to simplify scanning the documents and move toward paperless environments that save companies money. A Nacha group, for example, is working on guidelines to establish a sole QR code format for biller services.

Regardless of whether and when a standard takes off, Carriles said photo bill pay is a great way to add in new biller accounts.

"There is no tool box with only a hammer. We don't expect to do all of bill payment with photo bill pay. Absolutely no," said Carriles. "Photo bill pay shines when adding new payees. That's the most valuable."

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