Competition Looms in Online Bill Presentment

Banking companies need to aggressively pursue the
electronic bill presentment
business or risk losing the opportunity to portals that already are
consolidating many utility
functions for online users, a new study says.

With more than 15 million US households expected to receive their bills online
by 2002, banks and other financial portals are faced with a significant
opportunity to capture the
role of aggregator, consolidating and presenting these bills to consumers on
one site, says the report from Jupiter Communications.

Jupiter said it expects that by the end of the year, the average U.S. online
household will be able to receive three to four monthly bills (29 percent)
through online bill presentment. This number will grow to approximately eight
monthly bills (65 percent) in 2002, with bills from utility and telco
companies already being offered online.

However, the war over which Web sites will aggregate and present these bills
to consumers has yet to be won, Jupiter said.

“Consumers associate their banks with financial functions,” said Marc Johnson,
director of Digital Commerce Strategies for Jupiter Communications. “However,
in reality, these bills can be aggregated and presented to consumers by any
number of online
players–from banks to brokers to portals.”

A recent Jupiter/NFO consumer survey shows that 42 percent of online consumers
would like to receive bills from their bank’s Web site over other market
players, such as
personal financial management software providers (37 percent), America Online
(13 percent), portals (7 percent), and brokers (1 percent).

Only a few portals have begun to pursue the online bill presentment
opportunity, but according to Jupiter they pose a serious threat to banks.

“For banks, online bill presentment offers the last chance to drive recurring
contact with customers. This is critical for both customer retention and
cross-promotion of other bank products and services,” said Johnson. “Portals
have been very successful delivering utility-based functions, and online bill
presentment would provide them with the huge win necessary to capturing
financial portal status.”

News Around the Web