More than a decade after electronic bill presentment debuted, half the country still gets paper statements by mail. But the big tech firms that power electronic billing for banks are angling to become the industry's ultimate shredder.
Fiserv (FISV), for example, has reported a 20% conversion rate to electronic bills in a "tryvertising" program in which consumers continue to receive paper bills in the mail in addition to electronic ones for 90 days. Instead of switching to electronic-only billing right away, consumers get an opportunity to compare the two billing methods, and then choose between permanent paper and web delivery.
The program is aimed at relatively late adopters — electronic bill presentment has been around for a long time — and the strategy is to lure consumers whom internal research has pegged as reluctant to adopt electronic billing.
"We want consumers to get comfortable turning off paper so we allow them to try electronic billing before they adopt it," says Rahul Gupta, the group president of digital payments solutions at Fiserv.
The program, called E-Bill Introduction and offered through Fiserv's CheckFree RXP Payment suite, has been in operation for about four months, giving the firm a look at the first wave of customers who have gone beyond the 90-day trial. The 20% conversion rate in the first month followed a pilot test with five banks in which consumers who participated in the introductory program activated three times more electronic bills than those who did not. The service has since been made available to the more than 1,000 banks in Fiserv's client roster covering well over a million potential users. (Fiserv would not disclose the number of participants in E-Bill Introduction.)
Industrywide, the progress toward getting people to pay bills and receive statements electronically looks impressive. In research commissioned by NACHA and PayitGreen, Javelin Strategy and Research found that about 60% of U.S. consumers receive at least some of their bills and statements online. But only half of that group receives electronic bills only; the rest still get some paper bills as well. And there's the remaining 40% of the population who still use paper for everything related to billing.
And Gupta says that even people who receive electronic bills can have a lingering attachment to paper.
"The segmentation is quite complex. Generally we found that about 50% of [electronic] bill pay users receive electronic bills, but don't take electronic bills for all of their bills. You may have five bills out of ten, for example."
Fiserv is also expanding its roster of biller clients that deliver electronic bills directly via a financial institution's website — a move that reduces navigation work for consumers so they don't have to visit various sites to receive bills electronically.
The firm has about 400 billers and has set a goal to have 500 by yearend. The clients are mostly recurring billers that account for a majority of the bills consumers receive, such as utilities and telecom providers.
Fiserv's rivals are also targeting consumers who cling to paper delivery for some or all of their bills, or receive paper statements for bills they pay electronically. Converting such holdouts is a longstanding goal for billing tech firms since the cost of digital delivery is substantially lower than for paper delivery and bill presentment is considered a "sticky" service that boosts customer retention.
Nancy Langer, a division executive at FIS Global's (FIS) ePayments division, says the firm also offers a "tryvertising" option which lets consumers receive statements and bills in paper and electronic form before choosing a long-term option.
Greg Adelson, the group president of iPay Technologies, says his firm works to reduce paper by providing the consumer with summary bill information for billers rather than intercepting and digitally rendering the actual paper invoice. The summary is a more efficient delivery option.
"As a result, we have broader number of payees available for our subscribers to utilize," Adelson says. "The subscriber is then able to schedule payments or set up automatic payments based on the data received."
Adelson says this approach lets consumers stay in control over paper suppression by offering greater options for the receipt of billing information.
"Until billers elect to use a carrot/stick approach to solving bills" — i.e. until they offer incentives to shut off paper delivery — "there will remain consumers who opt to receive both electronic and print statements. In the interim, we're finding that a focus on simplifying consumers' and small business' access to electronic payment options is providing very effective to generate the same, or better, result," Adelson says.
Online Resources (ORCC) is redesigning its bill delivery products, including mobile payment and SMS bill reminder notification, to produce a consistent experience across the web, interactive voice response and mobile channels.
"To offer a comprehensive and cohesive experience for consumers, it requires a well thought out design for a bill payment solution suite that spans across all touch points, from web to mobile to enrollment to notification to bill viewing to paper suppression. With that, the consumers will feel comfortable and confident in the bill payment solution, leading to increased adoption of electronic payment as well as paperless billing," says Sanjay Kumar, senior director of product management and strategy for ORCC.