Banks’ “all-in-one-place” marketing for online bill-payment services is helping them gain more customers who pay their credit card debts through their online-banking sites instead of through their issuers, new research findings suggest.
Overall, more consumers are paying their credit card and other bills online through both banks and billers, according to research from Javelin Strategy & Research detailed in its report “2010 Online Banking and Bill Pay Forecast: How to Cut $8.3 Billion in Costs Through Channel Conversion.”
Some 50% of the 5,211 U.S. households Javelin surveyed online in March were paying bills online, up from 47% who were doing so in 2009.
But what is telling is that banks are starting to edge out direct billers, Mark Schwanhausser, Javelin senior analyst for multi-channel financial services, tells PaymentsSource (see chart).
”A big piece of that is because of ease of use,” he says, noting that it is easy for bank customers to just pay their credit card bills through their bank because that is who runs their accounts. “It gives banks a leg up [in choosing a bill-payment method] if the consumers’ cards are with the bank.”
And those consumers likely are paying more bills through the bank because it is easier to pay all their bills in one place. “The trend indicates to us that more people are preferring to pay through their bank for 10 out of 14 bills,” says Schwanhausser.
According to Javelin’s data on bill payments through banks vs. direct billers, bank websites have the lead over direct billers in car loans, car insurance, primary credit cards and other major credit cards. Payments made to store-brand credit cards were evenly split between banks and direct billers at 28% each.
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