The Consumer Bill Payment Survey - the seventh conducted since 2002 and sponsored by CheckFree Corporation - highlights consumers' growing use of online banking and electronic billing and payment services to help them manage their household finances. The January 2007 survey polled 2,018 online respondents who were at least partly responsible for household bill payments. Respondents are representative of the estimated 82.5 million U.S. households using the Internet, and the margin of error is plus or minus 2 percent.
The survey findings include:
- A growing number of consumers are turning to their computers, rather than their checkbooks, to pay household bills.
- Paying bills online has become a mainstream activity among U.S. households.
- Western states, followed by the South, have embraced online bill payment faster than other regions, which may be driven in part by higher broadband penetration rates and online banking use in these regions.
- Paperless bills appear to be catching on as consumers recognize their convenience, security and environmental benefits.
"The fact that online bill payment has overtaken paper checks shows that people feel secure managing their finances online," said Gwenn Bezard, research director with Aite Group. "Once considered a nice-to-have add-on, online bill payment is now the foundation of the Web banking user experience. I expect further growth in this area due to Generation Y's greater reliance on technology in their everyday lives as they move into early adulthood, and the increasing adoption of electronic bills, especially as the environment becomes a mainstream issue."
West Leads Nation in Online Bill Payment, Followed by the South Nationwide, consumers paying at least one bill online per month rose to 74 percent, compared to 69 percent of respondents in the previous December 2005 survey. Consumer adoption of online bill payment has more than doubled since January 2002, when only 37 percent of online households reported paying at least one bill online.
The West ranks first in overall adoption of electronic billing and payment, with 78 percent of online households paying their bills online, according to the survey. The South ranks second, with 76 percent. The Northeast ranked third in online bill payment, with 72 percent, and the Midwest trailed, with 71 percent.
Factors helping drive regional differences included higher broadband penetration rates, greater online banking use and technology-savvy populations in the West and South. In the West, 80 percent of surveyed households receive their Internet service through a broadband connection and 83 percent use online banking to check their account activity or transfer funds. By contrast, the Midwest, which trailed in EBP adoption, 70 percent of households have broadband Internet connections and 76 percent use online banking, according to the survey.
Consumers in Western states also were more likely to pay bills at online banking sites (42 percent), than those in the South (38 percent), Northeast (37 percent) and Midwest (33 percent).
Among the survey's six consumer bill-payer personality segments, there were more E-Savvy Planners living in the West (11 percent) and South (15 percent) than in other regions. This consumer segment enjoys trying the latest technology products and using financial management tools to organize their finances. E-Savvy Planners pay bills online because it's safer than mailing a check, they regularly check their credit reports and are more likely to use online banking (94 percent) and online bill payment (91 percent) services than other consumer segments.
American consumers increasingly rely on online bill payment services to save time. Eighty-five percent of survey respondents said, "paying bills online is faster."
But the rising cost of mailing paper checks to pay bills also may be helping fuel the trend. Some 85 percent of consumers surveyed said, "paying bills online saves the paper, stamps and the hassle of paying bills by check."
The average survey respondent paid 11.5 bills in a typical month, with approximately 39 percent of these, or 4.5 bills, paid online, and 34 percent, or 3.9 bills, paid by paper check. Consumers who used online banking sites for paying bills reported paying more bills per month and paying far more of them online. These consumers paid 8.2 (63 percent) of their 13 monthly bills online, and just 1.6 (12 percent) by paper check.
The survey also showed growth in consumers' use of online banking sites to pay bills. In the latest survey, 38 percent of survey respondents said they paid at least one bill per month at an online banking site, compared to 33 percent in the December 2005 survey.
An increasing number of online banking users are activating online bill payment services, further fueling EBP adoption. Forty-eight percent of online banking customers pay bills online, compared to 37 percent at the end of 2003.
Those who pay bills at online banking websites reported using more of their banks' financial services overall than non-EBP users, including automatic teller machines, demand deposit accounts and loans. Online bill payment customers also tap into more online banking features such as electronic statements, online account transfers and check imaging services.
