Delay In Bill Pay

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Many members are shying away from paying bills electronically at this leading online credit union, in many cases opting to use direct-biller sites instead.

Aside from siding with the competition, bill pay users are also rallying around the CU's efforts to pay bills via ACH instead of paper checks, according to a survey conducted by the largely Internet-based Pennsylvania State Employees CU (PSECU).

"The No. 1 lesson we learned from our member survey is to recognize our competition, which is not other financial institutions," said Mike Verotsky, e-Commerce manager at PSECU. Instead, "the competition is direct-billers."

About half of PSECU's inactive bill pay users and members who aren't authorized to use the service said they pay bills at direct-biller sites.

"The results indicate that members like to pay bills electronically, but they don't distinguish between paying them here or there," Verotsky said.

Direct-billers may be edging out CUs because they allow users to pay with debit and credit cards to earn discounts and frequent flyer miles, according to a CU bill pay roundtable published in the Nov. 14 issue of The Credit Union Journal.

"Both our bill pay and our Card departments would like us to allow members to make payments using their credit cards," Verotsky said. "Though we don't have a timetable to do that, there's no reason not to."

The PSECU survey also revealed that members who have a preference like to have bills paid electronically, Verotsky continued.

Only 2% of active bill pay users surveyed said they prefer to have their bills paid via paper merchants, he said.

"That result was interesting because we're in the process of converting our paper bill merchants to electronic merchants," he explained. "So it's the best of both worlds-a cost savings for us and members prefer it."

Nearly half of the payments originated by the service are currently posted electronically, Verotsky added.

About 16,000 online members participated in the February email survey. Participants were segmented into three user groups and asked about their knowledge of bill pay features. The CU also solicited comments regarding possible enhancements to the service.

Survey results compelled the $2.3-billion CU to release changes to its bill payment page in June. Members can now modify all their bills from one screen, change bills from fixed to on-demand payments at will; and schedule bills for any of several frequencies, including weekly, biweekly, monthly, semimonthly or quarterly.

Soon, the two-branch CU will also offer members more capability to use bill pay to track and categorize their spending, said Verotsky.

Additional online demonstrations and help will be important in making members aware of the range of bill pay features, as well, he said. For example, members who learn that they can modify their bills online and by phone or wireless banking said they are more likely to use online bill pay.

PSECU's bill pay service is one of the most popular in the CU industry: about 15% of its members pay bills online, or about 35% of active online account access users.

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