Banks and bill consolidators have begun to bring electronic bill payment and presentment (EBPP) to the mass market, according to industry speakers at a recent conference sponsored by Metavante (Milwaukee).
Comparatively speaking, the technology has been the easy part. Changing the habits of people who have a casual or indifferent attitude to technology-well, that calls for some serious selling.
At least customers no longer have to jump through hoops to sign up. Even as late as last year, enrollment in an EBPP service such as Intuit's Quicken BillPay required each user to print a paper application, send it with a voided check to a service bureau and then wait for a password in the mail.
"Amazingly, we had people who did that," says Michael Klieman, senior product manager at Intuit (Mountain View, Calif.). Now, enrollment takes just under five minutes to fill out a form, glance at the user agreement and select a PIN.
Each improvement to the user experience makes EBPP enrollment that much more likely for a wider range of people. "The simpler the process, the more customers," says Roman Koifman, vice president, ePayments, Chase Cardmember Services, JPMorgan Chase & Co. (New York; $755 billion in assets).
But making the sale won't necessarily be simplicity itself. "The [mass market] customer base is going to need to hear various value propositions," says Jeanine M. Tabaczynski, senior vice president and director of access services, Wachovia Bank N.A. (Charlotte, N.C.; $348 billion in assets).
NEVER SAY NEVER
Although Tabaczynski hopes to sell EBPP as an impulse purchase, it's difficult to get people using it. "People learn to write checks sitting at the kitchen table with their parents," says Tabaczynski. "We're asking them to change their behavior, and that just takes time."
That's why branch employees will play an important role in promoting EBPP to Wachovia's customers by relating their own personal experiences as users. A typical pitch: "It's really not that difficult to set up a biller-and then it's done, and you never have to do it again," says Tabaczynski. The conventional wisdom holds that once individuals move to an EBPP provider, they're likely to stay there. But competition from other financial institutions, portals and biller-direct Web sites has made EBPP customers a much sought-after prize.
One reason is that financial institutions can realize cost savings when their customers move from paper to electronic with their payments and statements. But what about firms that have already been relentless in driving down statement expenses?
By using a third-party fulfillment provider, Chase knows the exact cost of each statement and thus can determine the benefit of each EBPP enrollment. While some analysts estimate the savings at between $1 to $2 per statement, "I don't think the save is that significant [for Chase]," says Koifman. As a result, Chase must be more creative with incentives and communicating the value of e-statements, he adds.
Chase expects its EBPP investment to pay off from the ability to market to customers who prefer not to be contacted by phone or e-mail. "It's becoming more and more difficult to reach the customer," says Koifman. "Once people activate, they use the service on a regular basis."
From the customer standpoint, the ideal platform must deliver a comprehensive package of services. Already, says Koifman, discerning customers expect the ability to access their online account histories, activate cards, dispute charges, change PINs and pay bills. With these needs in mind, Chase hopes to differentiate itself with "state-of-the-art" EBPP, he says.