1 White Paper State of E-Bill Adoption
2 State of E-Bill Adoption For billing organizations, financial institutions and consumers, the paperless e-bill value proposition is stronger than ever. Research continues to show strong positive relationships between e-bill adoption and customer satisfaction, loyalty and profitability with financial institutions and billers. Yet despite consumers growing acceptance of paperless digital lifestyles, growth remains underdeveloped, especially when compared to rates of online bill pay. This paper sheds light on opportunities for growth and strategies to advance adoption. For example, the research findings suggest that digitalsavvy millennials are promising targets. In addition, those who rely on both paperless and paper bills have high potential to convert. In terms of delivery, the data show that mobile is emerging as a priority channel. Based on Fiserv research including the Seventh Annual Billing Household Survey, this paper provides the latest data on e-bill trends and penetration rates across industries. It draws on research insights and the experiences of leading billing organizations to offer practical recommendations to increase e-bill adoption rates. Overall E-Bill Adoption: Steady Incremental Growth In 2014, e-bills account for 23 percent of the volume of bills presented among U.S. households. This is a 2 percentage point increase over 2013 volume and reflects steady, though incremental, gains over time. This is consistent with growth over the past 7 years of 1-to-3 basis points per year. Significantly, e-bills represent less than half the volume of online bill pay (49 percent of bills). For billers, this egap presents an opportunity to drive greater awareness and adoption among those consumers who already pay electronically. Moreover, with 76 percent of bills still being presented in hard copy, the potential for growth among all consumer segments remains largely untapped. Despite consumers growing acceptance of paperless digital lifestyles, growth remains underdeveloped, especially when compared to rates of online bill pay. With 77 percent of bills still being presented in hard copy, the potential for growth among all consumer segments remains largely untapped.
3 Volume of Bills Presented Electronically Among U.S. Households PAPERLESS Paperless E-Bills Sent as a Percent of All Bills Distributed in U.S. 9% 12% 14% 16% 18% 21% 23% Source: Blueflame Consulting for Fiserv, Inc.,
4 Industry Penetration Rates: Mobile Leads the Way Among consumers receiving paperless bills exclusively, only mobile phone providers approach the 50 percent mark. Cable/satellite television and internet service providers also rank high likely because users of these services typically have established comfort levels with technology. Healthcare industries lag considerably, with only 10 percent of medical bills and 8 percent of hospital bills delivered electronically. This may be partially due to the fact that healthcare billing and payment is still very paper intensive and the bills are not frequently recurring or anticipated billings. Mobile Leads and Healthcare Lags Medical 10% Utilities 19% Retail Card 19% Healthcare Insurance 22% Home / Auto Insurance 22% Landline 25% Mortgage 28% Auto Lease / Loan 29% Cable / Satellite TV 30% Credit Card 35% School Loans 43% Mobile Phone 48% Sources: Seventh Annual Billing Household Survey, Fiserv, Inc., 2014; Blueflame Consulting for Fiserv, Inc., 2014; InfoTrends for Fiserv, Inc., 2014, InfoTrends 2014; Sizing the E-bill Adoption in United States, Aite Group,
5 Millennials are by Far the Most Interested in Going Paperless Given their adoption of technology in general, it is not surprising that younger demographics are more inclined toward e-billing than older ones. This is consistent with our finding that Millennials (born between 1980 and 1995) are seven times more likely to be interested in turning off paper than seniors. In fact, this youngest segment of adults is 52 percent more likely to be interested in paperless than their Gen X predecessors. Millennials The Paperless Generation Biller Direct Payees Interested in Discontinuing Paper Bills Within the Next Year 55% 38% MILLENNIALS GEN X 30% 8% BOOMERS SENIORS Source: Seventh Annual Billing Household Survey, Fiserv, Inc.,
6 Mixed Modality: Nearly Half of Consumers Receive Both Paperless and Paper Bills Consumers are clearly growing increasingly comfortable with online billing: 72 percent of those who pay at billers sites report that they receive at least one e-bill in a paperless format. Among these, 47 percent report receiving some paperless bills from billers, meaning that they also receive paper ones and 25 percent say they are completely paperless. The opportunity is significant. More than half (52 percent) of these mixed-modality consumers at biller sites are interested or very interested in turning off paper. The key is determining how to make that happen. Consumers Who Receive Both Electronic and Paper Bills at Biller Sites are Interested in Going Paperless 52% of Those are Interested in Going Paperless 1/2 of Consumers Receive Both Paper and Electronic Bills Source: Seventh Annual Billing Household Survey, Fiserv, Inc.,
7 Recommendations: Start With the Likeliest Candidates Encourage new customers to opt-in. Many people say they prefer to activate e-billing when they activate new service or when they start paying online. In fact, these preferences, which were reported by 45 and 43 percent of consumers respectively, significantly outweighed respondents preferences for incentives or prizes (28 percent). 1 This remains a significant area of opportunity in that only 23 percent of billers report targeting new service activations. 2 Access high-potential consumers through social media. A social media audit and content analysis 3 of 65 leading companies across 5 industries revealed that billers are not fully leveraging social media to promote e-billing. In fact, only 35 percent do so and most of these were utilities companies. Meanwhile, only 9 percent of telecom and 4 percent of insurance and auto finance companies use social media to promote e-billing. This is particularly noteworthy in that social media users skew younger and are already inclined toward digital communication, making them high-potential candidates for e-bill adoption. Target recurring payment customers. One quarter of online consumers report being likely to activate e-billing when setting up a recurring payment. Since these individuals frequently go online to establish such payments, are already comfortable with paperless and automated bill pay, and, according to Fiserv research, 4 are more likely to adopt e-bills, either directly or at a bank site. The opportunity to convert these lowhanging fruit should not be underestimated. Start With the Likeliest Candidates 55% 45% 43% 25% MILLENNIALS 55% of Gen Y Want to Turn Off Paper as Compared to 8% of Seniors NEW CUSTOMERS Say They re Most Open to Activating e-bills When They Activate Their Account ONLINE PAYERS Say They re Most Open to Activating e-bills When They Start Paying Online Source: Seventh Annual Billing Household Survey, Fiserv, Inc., 2014 AUTOMATED PAYERS Prefer to Set Up e-bills With Recurring Payment 1 Sixth Annual Billing Household Survey, Fiserv, Inc., InfoTrends, The Future of Multi-Channel Transactional Communications in the U.S., Social Media E-Bill Marketing Study: Insights Into Boosting E-Bill Adoption, Fiserv, Inc., Sixth Annual Billing Household Survey, Fiserv, Inc.,
8 Barriers to Adoption With widespread attention paid toward cybersecurity and theft of personal information, it would be easy to assume that security would be high on the list of reasons consumers don t adopt paperless billing. While it is a concern, only one-fifth of consumers cite security as the primary barrier. Instead, the focus is on concern about forgetting a bill/using paper reminders (43 percent), as well as a resistance to change (42 percent are comfortable with the current system). This suggests that customer education regarding the ease of e-billing, and establishing alerts and bill due reminders, would go a long way toward addressing barriers. The Big Barrier Isn t Security. It s Reminders and Habit. 42% Comfortable With Current System 37% Record Keeping 43% 21% Security Concerns Might Forget Because I Use Paper to Remind Me 20% Some Bills Easier to Read Source: Seventh Annual Billing Household Survey, Fiserv, Inc.,
9 Recommendations Let customers give it a shot with tryvertising. According to the 2013 version of this survey, 1 5 the ability to try an e-bill before turning off paper was the top motivator for adopting e-bills permanently at a financial institution s website. Fiserv clients that have employed this method through bank ebill distribution have experienced striking increases in e-bill adoption (upwards of 300 percent). To see e-bill tryvertising in action, watch the short video at Make e-billing a priority for customer service representatives. CSRs are often prepared to encourage customers to take advantage of automatic payment options, but anecdotal evidence suggests that customers being counseled on e-billing options is not nearly as common. CSRs are uniquely positioned to educate consumers on the ease and benefits of e-billing when they are activating new accounts or managing billing questions. Make opt-in and benefits prominent across online and offline customer touch points. Simple messages that address the top motivators and barriers to e-bill adoption should be integrated across all consumer-facing content including being prominently featured on websites, s, bill stuffers and paper-bill envelopes. In addition, opt-in functionality can include online opportunities like interstitial pages that provide e-billing sign-up before or after relevant content such as automated payment set-up, during activation or during online payment. 5 Sixth Annual Billing Household Survey, Fiserv, Inc.,
10 Consolidated E-Billing Through Financial Institutions Gains Ground The number of households receiving their e-bills through online banking has nearly doubled since 2009 (from 7.8 million to 14.9 million). The ability to manage finances in a single location seems to be a motivator with nearly half of consumers who receive e-bills through their financial institution citing convenience as the driving factor for their participation. These consumers also report high levels of customer satisfaction and loyalty with the Billers from whom they receive e-bills at their Financial Institution website. Consumers receiving their bills at their financial institution s website are 11 percent more likely to report increased satisfaction with billers than direct e-bill consumers. Importantly, these consolidated consumers are also 32 percent more likely to say that the e-bill experience makes them less likely to switch to a competitor. High levels of customer satisfaction are consistent with consumers willingness to promote the service to friends and family. Specifically, when asked if they would recommend receiving e-bills through online banking, 84 percent reported being likely to do so. Recommendation Offer e-billing on financial institutions websites. Given high levels of customer satisfaction and loyalty associated with consolidated e-billing at bank sites, billers would be wise to consider financial institution e-bill offerings alongside biller direct services. Bank bill payers are more likely to activate e-bills where they pay their bills because of convenience, financial management and trust. This practice does not slow traffic to the biller site, and it increases reach to a demographic of higher income earners, who tend to trust e-bill activation through their bank. 10
11 E-Billing Increases Customer Satisfaction and Decreases the Likelihood of Switching to a Competitor Bank E-Bill Customers 51% Increased Satisfaction With Biller 33% Less Likely to Switch to a Competing Service Provider Convenience is the Primary Driver of E-Bill Participation Biller Direct E-Bill Customers 46% Increased Satisfaction With Biller 25% Less Likely to Switch to a Competing Service Provider Bank E-bill Customers are Very Satisfied With the Service Source: Seventh Annual Billing Household Survey, Fiserv Inc., % are Likely to Recommend it 11
12 Keys to Adoption: Alerts and Mobile The research clearly suggests that and mobile alerts are another powerful motivator for e-bill adoption. Two-thirds (66 percent) of respondents say they would be interested in receiving bill-due alerts, while 71 percent of those say mobile alerts would make them more likely to adopt e-bills. This makes sense intuitively when one considers that the leading barrier to adoption is consumers use of paper to remind them when a bill is due a factor for 43 percent of respondents. In the Third Annual Biller Mobile Bill Pay Benchmark Study from Fiserv (2014), 36 percent of billers reported that they expect mobile offerings to have significant influence on the adoption of paperless billing and the discontinuation of paper statements. This figure is up from 20 percent just two years earlier. The findings suggest that billers are increasingly recognizing the potential influence of mobile and this influence is now playing out in the real world. For example, the Fiserv study mentioned above included a review of 40 companies e-billing rates paired with their deployed mobile bill pay and presentment (MBPP) features. It found that billers who offer mobile bill pay and mobile alerts reported a 47 percent increase in e-bill penetration between 2013 and This compares to only a 3 percent increase among billers who do not offer MBPP functionality. Recommendation Increase mobile bill pay and alert offerings. The data s so overwhelmingly skewed in favor of mobile offerings and alerts that enhancing these services is an obvious priority. For more insights into this area and specific recommendations, please see the Fiserv research paper, The Mobile Bill Payment Surge: What Consumers Are Doing and How Billers Are Responding. 12
13 Bill-Due Alerts Increase Likelihood of Paperless Billing 66% Want Alerts 71% Would Switch to Paperless if They Received Alerts Mobile Bill-Pay Offerings Linked to 15x More E-Bill Uptake 15x 40 Paired Year/Year Comparisons of Participating Companies Paperless E-Billing Rates and Deployed MBPP Features % 25% 17% 25% 14% 21% Bill Presentment (E-Bills) Mobile Bill Pay Alerts and Notifications Compare to Average of 3 Percent Increase in E-Bill Penetration for Billers Who Do Not Offer MBPP Functionality Sources: Seventh Annual Billing Household Survey, Fiserv Inc., 2014; Third Annual Biller Mobile Bill Pay Benchmark Survey, Blueflame Consulting for Fiserv Inc.,
14 What s Next: Keeping Up With the Evolution of Billing and Payment Consumers needs are shifting dramatically, especially when it comes to their overall financial experience. Technology-related offerings are altering their behavior, innovation is accelerating and new channels are continuing to emerge. These forces, and the ways billers adapt to them, will have a significant impact on consumers experience. According to the data, consumers have become increasingly interested in electronic financial services offerings, including e-billing. Accordingly, many billers are increasing their online and mobile offerings, and paying attention to what consumers want. Areas of untapped opportunity remain, however particularly as they relate to mobile bill pay and presentment, and offering e-bill services at financial institution websites. Given the high rates of e-bill adoption, customer satisfaction and loyalty associated with customerfocused e-billing, it s clear that the billers who respond to consumer desires will have an easier path than those that don t. 14
15 About the Author Eric Leiserson is a senior research analyst at Fiserv. He has authored several white papers and case studies on consumer behavior and attitudes with respect to banking, billing and payment and mobile practices. In addition, he has conducted numerous primary research projects and webinars in the areas of social media, mobile bill pay usage, consumer segmentation, longitudinal surveys, Web usability and focus groups. About Fiserv Fiserv is driving innovation in Payments, Processing Services, Risk & Compliance, Customer & Channel Management and Insights & Optimization, and leading the transformation of financial services technology to help our clients change the way financial services are delivered. Visit for a look at what s next, right now.
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