NACHA, the US-based electronic payments association, has stated that 2016 will be the tipping point for electronic billing (e-billing).1 Its prediction is based on the slow and steady growth of current website portal models. However, there is nothing in the study to suggest that 2016 will be a ‘crisis’, where the adoption of e-bills increases significantly beyond the current rate (creating a true and identifiable ‘tipping point’). In fact 2016 is just when the number of e-bills outweigh the number of paper bills. However, if they had taken into account the explosive growth in email billing, this date would be much earlier and could be a true tipping point.
If you consider the fact that 1.9 billion emailers sent 107 trillion emails in 2010,2 it is evident that email is still the killer application, with email billing being a natural extension thereof – the inbox is rapidly replacing the postbox. Although e-bill consolidators are all marketing a single place for storing your bills, the inbox remains the perfect and preferred consolidator.
Facebook and gmail’s new email enhancements, as well as Smartphones with their advanced email management functionality, are also driving the use of email into an always-on and alway- available communication tool.
NACHA’s study indicates that e-billing is gaining momentum across markets, with more billers coming online in 2011 and 2012. The report says it is evident that e-bills are becoming mainstream with consumers expecting the service to be available, but struggle with enrolment, logins and remembering to pay bills without a paper bill as a reminder. NACHA also noted that green messaging continues to be widely used, but is often a secondary motivation to customer convenience.
Customer Convenience is Key
Customer convenience is key – the mass adoption of paperless processing will only occur when the alternative is as easy as the status quo. Opening an email is as easy as opening a paper document. In fact, it’s even more convenient with the functionality that email delivery enables. Asking customers to replace the convenience of a paper bill with the process of portal registration, plus remembering another unique username and password for each biller, as well as up to three consolidators, is not going to drive paperless adoption.
The e-billing industry constantly laments the fact that self-service portals have failed to achieve significant paperless adoption rates and the results of these paperless adoption initiatives continue to disappoint.
According to a recent InfoTrends survey3, 61% of consumers said that remembering multiple unique usernames and passwords remains a barrier to paperless adoption. Almost half (49%) of consumers said that fetching their bill on a biller’s website was not a good alternative to the paper version. As shown in Figure 1, InfoTrends found that four times as many consumers prefer email delivery of bills and statements than fetching their bills from a biller or consolidator’s website.
Billers looking to speed up payments should also consider the merits of email delivery – it saves money on billing and collection, enhances customer service and reduces days sales outstanding (DSO). All you need to get started is your customer’s email address.
There is also a recent trend towards one-click payment within the body of the email bill. According to NACHA, currently, email notifications provide a link to the login page allowing the customer to pay on the website. NACHA’s stance is that this extra step will soon be eliminated and a ‘pay now’ button will be located in the body of the email, enabling a one-click payment process. Such payment options already exist today. Furthermore, the ability for the customer to save payment details enables recurring payment with just a single click across any PC or mobile email-enabled device.
Secure Email is the Key Determinant
NACHA does say that email is a key determinant of an e-bill programme’s success, but there is a chasm of difference between an e-bill notification (pulling the customer back to a login screen) and the actual delivery of the bill as a secure email attachment.
The secure environment of an encrypted email bill provides new, personalised marketing opportunities that allow billing to serve as a significant revenue generator as well. Many email billers maximise this trusted real estate by including personalised marketing offers that drive well-qualified website traffic. In comparison, unprotected email notices tend to refrain completely from promotional messaging, and will simply create new phishing opportunities and heighten consumer resistance to clicking any link at all.
Why Consolidators Fail
Consolidators are the third e-billing model (after push and pull) but are battling to gain momentum because billers are reluctant to hand over this vital – and in some cases only – touch point with their customers. Likewise, handing over the billing relationship to banking consolidators also sees the biller losing the customer relationship. Marketing opportunities through these models are completely lost as well.
Adding to billers’ reluctance to hand over their customer relationships to a consolidator is the fact that consumers are not actively enrolling. The reason for such poor adoption of this billing model is that in order for a consolidation location to be successful, consumers would require the majority of their bills to be immediately available, which has not been the case with the majority of consolidators on the market today.
Convincing the majority of consumers to register has proven to be an impossible marketing feat. For the consolidator, however, it is even worse, as the customer has to have many pieces of information on hand for each biller at that location. In addition to this, consumers do not want another mailbox nor to have to choose and remember yet another username and password.
Taking all their objections into consideration – the website nature of viewing bills at a consolidator, in conjunction within a multi-biller environment and along with the fact that the biller does not have any ownership of the viewing real estate, bill marketing to consumers at consolidator websites is a considerable challenge, if in fact it is offered at all. There is certainly no advanced personalisation possible.
Secure Email Delivery Will Drive Paperless Adoption
Industry averages for paper tur- off have struggled to exceed 20%, while email delivery models boast adoption in excess of 50%. This is because email delivery satisfies the fundamental requirements of paperless processing, where all other e-billing models fail.
Customer adoption of paperless processing using secure email bill delivery is due to the ease of use and low cost of switching.
Email is the most common application present on almost every mobile device in the market today. Email is therefore the ubiquitous service in the consumer’s daily life, making the inbox the logical electronic equivalent to the mailbox. So, the choice is yours – choose email billing to drive paperless adoption and the e-billing tipping point is in your hands.
1E-billing Benchmarking Study – NACHA’s Council for Electronic Billing and Payment.
2According to web monitoring service Royal Pingdom.
3InfoTrends Survey 2010 (The Future of Electronic Bill Presentment and Payment in North America).
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