Mobile bill payment users double to reach 16M: report
As more Gen Y consumers begin to pay their own bills, the number of mobile bill payment users has doubled, according to a new report from Fiserv.
Fiserv’s “2013 Billing Household Survey” shows that the number of mobile bill payment users has increased from 8 million to 16 million in the last year. Additionally, one in four tablet owners use the device to pay bills.
“At the highest level, more people have smartphones,” said Eric Leiserson, a senior research analyst at Fiserv, Brookfield, WI. “That number increased from 47 percent to 57 percent among U.S. households, so more people have smartphones, they’re doing more activities, more interactions with those smartphones.
“When you start to drill into why mobile bill pay increased you have to look at the value creation out of this new channel,” he said.
“What our data shows is when we asked why did you choose to pay via mobile, convenience to pay on the go, the anywhere capability, saves time—all of these motivators that the mobile platform now provides is driving people to change their behavior.”
Among smartphone owners, mobile bill payment usage jumped 150 percent in the last year.
When asked why they prefer mobile bill payment, 70 percent of consumers pointed to convenience, 55 percent said anytime access and 49 percent said time savings.
Consumers tended to make more payments via a mobile site as opposed to a mobile application, so it would behoove billers to make sure they at least have a mobile-optimized payments site.
The No. 1 motivator consumers cited for paying bills using a smartphone is the use of an app and smartphone camera to take a picture of the bill, with 36 percent of respondents pointing to this.
Most banks and financial services offer apps that let consumers snap a picture of a check or bill to input the information directly into the app without having to type in all of the details on the small smartphone keyboard. This makes some consumers choose mobile over online for payments even when they are at home.
Consumers are also using tablets to make bill payments.
More than one in three tablet owners had used their tablet to visit a biller site in the previous 30 days. Sixty-three percent did so to pay a bill, and 36 percent did so to access invoice information and history.
Additionally, 60 percent of tablet owners would like to receive e-bills on their tablet.
Fiserv’s survey also found that 83 percent of consumers are using two or more channels to pay their bills. The average number of bill payment methods consumers use increased 10 percent from 2012 to 2013, rising to an average of 3.2 channels each month.
Gen Y consumers seem to be leading this trend of multichannel as well. Seventy-four percent of Gen Y respondents consider offering multiple payment options important, compared to 67 percent of all respondents.
“Gen Y has grown up in the digital age,” Mr. Leiserson said. “They have digital lifestyles. They tend to be early adopters of new technology.
“This group prefers and is now conditioned to conduct transactions and interact with service providers from their mobile device,” he said. “The interaction with smaller screen footprint is not a problem for them and they in fact prefer it. They’ve grown up with apps. A familiarity for it along with the value it creates is really driving Gen Y to adopt in higher numbers.”
Those billing the money also benefit from mobile payments.
With mobile, they are able to send alerts and reminders to consumers to keep payments timely and avoid any troubles.
Almost three out of four households that expressed an interest in receiving alerts and reminders said they would have a more positive perception of a biller that sends them a reminder to pay a bill. Sixty-six percent said alerts and reminders would increase the likelihood they would use paperless e-bills.
“I think if you pivot and turn to billers those service providers like insurance companies and utilities and auto lenders, folks of that position like to be able to get as close to the customer as possible and that means in their pockets or in their hands or wherever a smartphone lives, so for that group it represents an opportunity to onboard typically offline users to online,” Mr. Leiserson said.
“Alerts as we found in our research is a huge thing that customers want to get out of that interaction and billers are there to provide it,” he said. “With online banking, the bill payment makes for a terrific interaction.”
Mr. Leiserson also thinks that this report offers a positive outlook for mobile commerce in general.
“I think it’s really good news when you see consumers adopting a transaction on their smartphone,” Mr. Leiserson said. “I think it sets the stage for additional types of transactions, be it point of sale or what have you.
“If you go back a decade or two and look at online bill pay, that really served as a trustworthy transaction source online and with that became more comfortable with it and started to adopt more retail transactions,” he said.
“Same analogy works here. When you can pay a utility bill on an app or mobile browser you gain a comfort level that can transition to other places.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York