When will e-bills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.
The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the e-bill market, indicating that a total of 5.1 billion e-bills were delivered in 2010 alone. However, some consumers are moving to adopt e-bills more slowly than anticipated.
“After easily converting the ‘early adopters’ to e-bills, billers are realizing that the second and third tiers of consumers will take more time to convince,” says Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see e-bill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”
Nine of ten of the companies surveyed rate e-bill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said e-bill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.
“E-bills have not reached their full potential, but they’re gaining momentum,” says Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”
Of those surveyed, universities had the most successful e-billing programs by far. Most universities can mandate e-billing for their students or use a customer opt-out approach rather than an opt-in approach.
“Most billers ask their customers to opt-in to the eBilling program,” says Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”
Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.
“Once customers truly understand e-billing, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for e-bill adoption.”