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Removing Barriers to Your Online Bill Payment Service
October 27, 2003
Wright-Patt Credit Union
Wescom CU in Pasadena, CA, has changed the pricing structure from a monthly fee to free, and reported substantial growth among users. Most importantly, these members are the most profitable members, according to their MCIF reports, as these members also have extremely high cross-sell ratios. We (at First Financial Credit Union) experienced the same, noting that the cross-sales ratio for bill-payment users is almost double that of non-users. - Gary Skraba, 626-939-3118, email@example.com
Is it profitable? Did the balance/profitability profile of the bill pay members improve after they signed up?
Editors Note: The first two reader comments below bring up some very good points. The decision to offer 'free' IBP to all members will in almost all cases result in increased direct costs to the credit union. Many of the credit unions that have made the decision to go the free route and cover these costs feel that these vendor fees will be made up through increased relationships with these adopting members. This is based on analysis of previous IBP adopters and their subsequent average increase in services and profitability over time. This was also apparently a big part of the BOA strategy decision when they decided to offer free IBP to all of their customers. This will be one of the major strategies discussed during tomorrow’s Callahan webinar on effective bill pay strategy.
Of course when you offer a service for free, more people will sign up for it and use it. I was hoping the article would go in to the cost to the credit union. Now, instead of generating approximately $3,700 in income to pay for the service, the credit union is having to pay about 3 times that dollar amount to manage those who are enrolled. (Depending on what their Bill Payer provider charges them per user per month.) How can this be a good thing? More information should have been provided to look at both sides of the issue.
What was the cost to use the on-line banking system? If they were giving that away free also, what was the increase in cost to the Credit Union of the total on-line channel? Did that outweigh the benifit?
Consumer Sentiments And Employee Insight...
What’s In Store For 2017?
Removing Barriers to Your Online Bill Pa...
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