This year, 34 million US households are expected to pay bills online and this number is predicted to rise to 42 million by 2006, according to a new report from eMarketer.
The
Online Bill Paying: The Road To Increased Profits report says, as consumers increasingly turn to the internet to pay bills because it is more convenient and saves postage costs, many billers are beginning to see e-payments as a revenue opportunity.
According to eMarketer, banks and other financial institutions are in an enviable position in this market because they have already established themselves as trusted companies and can use this opportunity to retain and deepen customer relations.
Allowing customers the ease of paying bills online opens up further opportunities to companies, it provides them with a target for direct marketing campaigns, can easily collect customer data and can communicate with customers directly in a real-time, interactive environment, says the report.
Currently, there are two main ways to pay bills online, either biller-direct, where the consumer goes on to the suppliers website to view their statement and pay direct, or via a financial institute website, such as bank, which can display billing information from third-parties on their own websites.
In a separate report, Forrester Research forecasts that this year nearly 16 million US households will pay a bill online at a biller’s site, compared to 12 million at a consolidator’s sites. Forrester also says that from 2004 to 2008, the biller-direct model will grow at 9.3% annually, while the consolidator model will grow slower at 7.1%.
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