Facing rising printing and postage costs, credit card issuers are taking a tough look at the practice of mailing paper statements to customers every month.
Though very few issuers are actually pulling back, and they are wary of consumer backlash if they do, analysts expect several issuers to eliminate paper statements within the next few years.
The likely steps will involve rolling out new card products that offer only online bill payment, experts say, as issuers try to shift customers to electronic statements. And people who continue to demand paper statements may eventually be charged a fee for the service.
Robert Hammer, the chief executive of the card advisory firm RK Hammer, said issuers could introduce the concept by recasting the mailing of monthly statements as an add-on benefit. "It will be zero cost, at first, moving to some introductory fee," he said.
"Credit card issuers will eventually charge customers for receiving paper statements in the mail, because it's such a costly line item for them," said Adil Moussa, an analyst with Aite Group. "They might not call it a statement fee, and instead may lump it in with a fee covering customer service or other features you used to get for free."
Neither Hammer nor Moussa could predict when this shift could begin.
But the writing is on the wall, analysts say, citing recent moves by two major issuers.
American Express Co. began eliminating in June monthly paper billing statements to its corporate credit card customers, though an Amex spokeswoman said that the New York financial company would continue to mail statements to employees of businesses with "extenuating circumstances," upon request and at no fee.
Amex has no current plans to expand the policy to other card products, the spokeswoman said. "We started with corporate cards," she said.
HSBC Holding PLC's Hong Kong unit announced last month that beginning Jan. 1, 2011, it would charge its credit card customers $2.60 a year to continue receiving paper statements. Some customers may apply for a fee waiver. An HSBC North America spokeswoman would not say whether the U.K. financial company plans to introduce similar fees in other markets.
Several major U.S. issuers said they have no plans to charge customers to receive paper statements, though many of them urge customers through mailings and their bill-payment Web sites to switch to paperless statements.
Some banks even offer incentives for customers to switch.
Wells Fargo & Co. earlier this year began offering $5 to credit card customers who opt to go paperless, according to a spokeswoman.
JPMorgan Chase & Co. has provided $10 credits and sweepstakes prizes for customers to opt out of paper statements in the past, though no such promotions are running now, a spokesman said.
Billing-industry observers say credit card issuers are closely watching the telecommunication industry's efforts to move to paperless billing. The wireless carrier T-Mobile USA Inc. imposed a $1.50 monthly fee in August to receive mailed statements, and $3.50 for a detailed list of calls. But after a firestorm of complaints from subscribers and queries from regulators, T-Mobile backed off; it said last week that it would take "more time" to determine the fairest way to move customers to paperless bills.
AT&T, Sprint Nextel and Verizon Wireless charge fees for bills with itemized call details, typically about $1 per page. And Sprint has offered customers a $5 credit for opting for paperless bills.
Tracy Dalton, manager of product development for Regulus Group, a Naperville, Ill., company that processes some 2 billion consumer bill-payment transactions each year on behalf of consumer corporations, including several large credit card issuers, said card issuers face a more difficult dilemma than some other industries in weaning customers away from paper statements. "Consumers are reluctant to suppress paper on transactional types of bills such as credit cards," he said.
Most customers are comfortable paying with their credit card online, but the physical bill is "symbolic" to them of the ability to track payment history and dispute transactions. Though consumers can perform these same tasks online, "receiving a critical document such as a credit card statement is a reminder, and many consumers are still not comfortable with e-mail delivery," he said.