Does Bill Pay Add Risk to Financial Management? PageOnce Takes the Plunge
Intuit's Mint.com is launching an iPad application that it says can boost its referrals to financial accounts by making money management social. The new version is designed to help encourage users to make financial decisions as a household that they might put off as individuals.October 26
Most personal financial management providers assure users that their services are safe because they can't be used to move money. PageOnce Inc., however, is betting that it can attract more users than it scares off by adding a bill-pay feature — and charging a fee to use it.
Financial management sites appear, on their surface, to be a risky proposition because most ask users to hand over their banking passwords to pull in transaction data. For years, these sites have calmed users' security fears by stressing that they don't allow payments — if crooks break into the PFM site, they can't drain any of the accounts customers have linked.
PageOnce's bill-pay feature not only challenges other PFM providers to reconsider their stance on money movement, but also takes aim at the idea that banks should be a primary source for paying bills and moving money.
"Mobile is changing how consumers access bill payment," says Gwenn Bezard, co-founder and research director for Aite Group LLC.
PageOnce, of Palo Alto, Calif., charges $4.99 per month for the payment service. Its main money-management app remains free to use.
Some of the PFM providers have garnered staggering numbers of customers, many of whom are younger and may not care if they use a bank or some other third party to move money and pay bills, experts say. PageOnce, for example, has 5.4 million registered users.
"It has got to give you pause and force banks and others to look at this and ask if there is an opportunity there," Bezard says.
At the same time, overall consumer adoption of PFM is still low among online banking users, according to Aite's estimates.
The PageOnce bill payment service, which went live Monday, is also somewhat limited. So far, it can handle money movement only among about 300 banks and billers. And users cannot set recurring payments. The system kicks out alerts and also has a sophisticated calendar function that helps users keep track of payment dates, but users must send a new payment instruction each time a bill is due.
The PageOnce product also has a bill presentment feature that is integrated with bill payment.
"It is clearly an alternative to going to a bank and going to a biller site and paying at those places," says Steve Schultz, chief operating officer of PageOnce.
PageOnce, unlike many other PFM services, does not depend on Yodlee Inc. for its account aggregation. It has developed its own platform for aggregation, it says.
PageOnce has a deal with a back-end payment processor, which Schultz would not name. That payment processor has relationships with about 10,000 billers, Schultz says, and it supports account aggregation for 8,000 merchants and banks.
Most U.S. consumers prefer to pay bills directly at the biller's site, says Jacob Jegher, a senior analyst with the research firm Celent.
Consumers' second choice is to pay bills through a bank's website.
"What is the motivation to change consumer behavior away from the No. 1 source, which is biller-direct?" Jegher says.
There is no technological hurdle preventing PageOnce's rivals from allowing payments on their own sites. AOL Inc. and Tier Technologies Inc. even offered non-bank bill payment in the 1990s, says Bezard.
Despite PFM providers' reluctance to offer payments, they may soon follow PageOnce's lead.
"This has got to be coming for Mint.com," the popular PFM site owned by Intuit Inc., says Stessa Cohen, research director of banking industry advisory services at Gartner Inc.
Mint would not say whether it will add payment services. But Mint's recent launch of an iPad application, which uses a different interface from its mobile and Web versions, demonstrates that Intuit is not afraid to change the nature of its services, Cohen says.
"At Mint.com, we're always looking at new and innovative ways to improve our customers' financial lives," Aaron Forth, general manager of Intuit Personal Finance wrote in an email.
"Bill management is an important part of that and we'll continue to make that process simpler, but [we] aren't ready to disclose more of our plans at this time," Forth wrote.