TD Canada Trust is giving away cash prizes in an effort to encourage use of its online bill payment service.
Since June 5 it has awarded $6,820 in 50 weekly drawings of $68.20. It will continue offering these weekly prizes until Aug. 13, when it will hold a grand prize drawing for $68,200. Customers are automatically entered every time they make an online bill payment, up to 20 times for the entire sweepstakes. (A Canadian dollar is currently worth 68.2 cents in U.S. funds.)
TD Canada hopes the drawings will help it become the No. 1 online financial institution in North America, said senior vice president Chuck Hounsell. The company has 900,000 online banking customers, more than half of whom use online bill payment. Mr. Hounsell said he expects to see the total of bill-paying customers rise by 75% this year.
"We want to see our customers use the Web for a greater portion of their transaction needs," Mr. Hounsell said. "So we said, 'Let's pool our resources and do something a little interesting for our customers,' and $100,000 [Canadian] is pretty interesting, especially since it is tax-free in Canada."
The promotion is one of a number of projects TD Canada is working on to increase online banking. The company - formed after the merger of TD Bank and Canada Trust in February - also is developing a Web site with personalization tools to let customers view areas of the site that are of greatest importance to them. E-mail and telephone marketing campaigns are planned to encourage nonactive customers to use the site, which will replace the current site by the end of March.
TD Canada also expects to introduce electronic bill presentment in September through E-route, a consortium of Canadian banks formed last year to develop the service, of which TD Canada is a 25% owner. TD Canada handles payment for 2,300 billers online.
Unlike U.S. banks, which have seen technology vendors develop bill presentment services for them, Canadian banks are soliciting billers themselves, making the process easier to get started, Mr. Hounsell said.
Brook Newcomb, a senior analyst at Forrester Research in Cambridge, Mass., said TD Canada Trust is in a better position to give away cash in a bill payment promotion than a U.S. bank would be because online banking and bill payment are much better accepted in Canada than here.
"Here, they would be spending money to educate the entire world since awareness here is still pretty low about online bill payment," he said. Spending money on a sweepstakes "would not encourage people who are concerned about the security of the transaction to try it out."