Is Online Bill Pay Working for You?

Active online bill pay customers are 98 percent more profitable than the offline user. More online bill pay customers translates into increased profit for your credit union.

 

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Does your credit union adequately address your members’ online security concerns? Is your staff personally using bill pay? Are your marketing campaigns effective? Do you offer free bill pay services? If you answered “no” to any of these questions, then check out the tips below to improve your bill pay program.

According to Boston Consulting Group, active online bill pay customers are 98 percent more profitable than the average offline customer. But what does that mean for credit unions with less-than-desired bill pay adoption rates?

There are several key elements every credit union should address in order to help drive bill pay:

Openly address online security fears.

One of the biggest objections people have to paying bills online is security. Many consumers fear entering personal information online. What consumers don’t realize is that online bill pay is actually MORE secure than physically paying bills. According to Javelin Strategy, security experts actually recommend consumers pay their bills online; as well as shred monthly invoices that come in the mail as a precaution.

It’s important for members to understand that when they log in to their accounts, they are in a secure area. Actions made, even if just checking which items have cleared, are encrypted. Along with an Internet browser that uses 128-bit encryption, this is far more secure than putting a paper check in a mailbox.

However, most members don’t understand this, which is why it’s so important for credit unions to openly address any security concerns. Credit unions that proactively educate members on the security benefits of online bill payment see results in the form of new enrollments.

It’s important for staff to use online bill payment. If they understand it, they can sell it.

Studies show that if a credit union’s branch staff personally uses online bill pay, they are far more effective at selling it. If your branch staff is not comfortable enough with online bill payment to effectively articulate it to your members, they won’t be successful at selling it.

Offering promotions and giveaways, while hardly revolutionary, is effective in driving staff bill pay usage. For instance, offer a bill pay promotion where branch staff members receive one entry to win an iPod for each bill paid online.

Offer multi-faceted marketing programs, don’t just send statement inserts.

It’s critical to combine multiple strategies when marketing bill pay, in order to achieve maximum effectiveness. Combining a bill payment sweepstakes with statement inserts, an online campaign and branch posters will make the results of the initial sweepstakes far more effective. A recent study by MasterCard RPPS, focused on quantifying the effectiveness of enhanced consumer awareness in driving online bill pay adoption, showed that “a well-focused consumer marketing initiative with repeat communications” is effective in moving consumers toward adoption. Indeed, one financial institution conducted a bill pay awareness campaign prior to the multi-faceted marketing campaign, and saw an amazing 81 percent of online users enroll in the service.

Move away from charging.

According to a study by Online Resources, bill payment adoption for financial institutions offering the service free of charge is 80 percent higher than those charging $5 or less, and 190 percent higher than those charging more than $5. Considering the statistics from Boston Consulting Group, it’s more evident than ever – credit unions must offer free bill pay service in order to appeal to members.

According to a Forrester study, the projected growth rate for Gen-Y users is higher than that of any other age group. The study projects the number of Gen-Y’ers (defined by Forrester as those born from 1976 to 1990) paying bills online will grow 219 percent by 2010. Though baby boomers find online bill payment a service worth paying for, Gen-Y’ers, who have fewer bills to pay, find paying any fee for the service onerous. It’s more important than ever to communicate to Gen-Y users the benefits of bill pay, focusing on its time-saving convenience and ease of use.

 

 

December 5, 2005


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