MasterCard International this month marked the 20-millionth transaction over its electronic bill payment service.
The Remittance Processing Service, which electronically routes payments from bill payment service providers to billers' merchant bank accounts, currently handles about five million transactions per year, up from about 350,000 in the late 1980s.
The transaction growth is an indicator of consumers' increased willingness to make use of electronic financial services.
Several of the nation's largest financial institutions use the MasterCard service, including BankAmerica Corp., Banc One Corp., Chase Manhattan Corp., Chemical Banking Corp., Mellon Bank Corp., and Meridian Bancorp.
"Everyone in the bill payment process benefits when paper transactions turn into electronic transactions," said Joseph S. Pendleton, a senior vice president at Reading, Pa.-based Meridian.
The service enables the bank to offer economically viable home banking to its customers, Mr. Pendleton said.
"We have realized tremendous cost savings, and the number of related customer inquiries is incredibly low," he said.
According to MasterCard, as consumer interest in electronic bill payment has grown, so has the number of billers who accept electronic payments from their service providers.
When the Remittance Processing Service began in 1987, fewer than 25 billers nationwide accepted electronic payments, according to MasterCard. Today that number has grown twentyfold, and the card association is committed to expanding even further.
"RPS has served as an enabler for the industry, facilitating the electronic bill payments process and resolving issues associated with paper-based remittance processing, including high costs and late payments," said Simon Nahnybida, vice president with New York-based MasterCard.
"As we continually add more billers to our directory, a greater number of payments will be able to flow through the system, resulting in an even lower cost per transaction."
