Javelin Strategy & Research has given banks more good reasons – five billion of them – to hurry up with expedited online payment services.
Banks have struggled to take market share of billpay services from direct-biller sites, and many industry advocates have pointed to the expedited, quick-pay payment service as a way to close the gap. The most obvious reason is that it eliminates the posting advantage direct-billers give their customers, who otherwise would have to wait several days for a bank-based billpay transaction to clear.
Over the next five years, says Javelin, the banking industry can realize nearly $5 billion in added revenue, which would otherwise be lost to direct billers, by adopting fee-based services for speedy bill payments, which Forrester estimates will top 400 million transactions by 2013. Expedited pay will become particularly attractive to banks as mobile banking and payments adoption accelerates over the next five years.
“While the online channel is primarily used for expedited payments, mobile could represent incremental value to banking and billpay customers,” wrote report author Bruce Cundiff, director of payments research and consulting at Javelin. “Using mobile alerts to advise customers of upcoming payments would raise awareness of the bank’s ability to offer same day payments—building greater customer loyalty—while increasing bank revenues.”