The Changing Face of Electronic Bill Pay

It’s not just for select members anymore. Once thought to be a service targeted only at affluent or technology savvy consumers, electronic bill payment is quickly becoming a mainstream financial solution for individuals of varying demographics and technological orientation.




It’s not just for select members anymore. Once thought to be a service targeted only at affluent or technology savvy consumers, electronic bill payment is quickly becoming a mainstream financial solution for individuals of varying demographics and technological orientation.

According to Credit Union National Association (CUNA), the number of Internet users in the United States has exceeded 150 million, seven times the number of users recorded in 1996. And with more online users comes an increased demand for online services, including bill pay. According to a report by TowerGroup, about a third of all households bank online, and one in six is paying bills electronically.

With statistics pointing toward mainstream use, credit unions continue to look for creative ways to increase bill pay use with members. A study by The Ohio State University found that marketing, not demographics, is the key to increased adoption of Web-based banking technologies.

The study examined the role that factors such as age, income and education play in the adoption of online banking and found that people who believed the service was useful, reliable, secure and easy-to-use were more likely to try it, regardless of age or background. Researchers found that people who believe in the security of electronic banking are more willing to try it.

And according to a Callahan & Associates survey of 26,724 members, half of credit union members who don’t currently use online bill payment said they were unfamiliar with the features and benefits of using this type of service.

Mutual Security Credit Union in Wilton, Conn. offers electronic bill payment to its members, and has developed multiple marketing activities to increase usage and help its members understand electronic bill pay to take full advantage of the service.

“Electronic bill pay offers a number of benefits to our members, including convenience,” said Larry Holderman, president and CEO of Mutual Security. “Electronic bill pay is a key feature that credit unions should offer to members in order to stay competitive with other financial institutions.”

Mutual Security launched its bill pay service, named WebLine MemberPay, which has a complete marketing campaign including direct mail, statement inserts, newsletter articles, brochures, Web site marketing, and user guides to help educate their members about the convenience and security of using bill pay. In addition, the credit union implemented a cross-selling program for its staff to encourage bill pay adoption.

The credit union obtained MemberPay® through its corporate credit union, Constitution Corporate Credit Union, and Corporate Network eCom, LLC. With this program, Mutual Security maintains control over their member data, enabling them to proactively monitor changes in member statistics and evaluate the effectiveness of marketing campaigns. This bill pay system gives the credit union access to proven marketing techniques, standard templates and assistance in planning marketing promotions.

To meet the growing needs of their members, credit unions are extending their Internet banking options, and communicating how those options benefit their members. The results of these efforts are clear in the rising adoption of online services.

A survey polling 3,000 U.S. adult Internet users showed that the median income of online bankers fell 18 percent from $62,500 in 2000 to $51,500 in 2002. This is a good indication that online banking is going mainstream.

Thomas Miller, senior consultant for The Dieringer Research Group, the firm conducting the study stated, “Personal banking is the most popular financial activity, and bill payment is the fastest growing sector within online banking.”

With the changing profile of electronic bill pay users and increasing adoption, it becomes more important for credit unions to offer and communicate the benefits of electronic bill pay. As members become more and more familiar with the service, they will continue to seek it from their financial institution.

MemberPay is part of the MemberStreet® line of electronic products. If you are interested in learning more about the MemberStreet solution for credit unions, please contact Michelle Young (888) 872-0440, ext. 6088.


April 12, 2004


  • I found this very interesting. We've had billpay for about a year and havae about 400 members signed up. However, we are charging a monthly fee after the first 90 days. It would be great to know if the financial institutions are charging for the bill pay product.
  • I would be interested in finding out more about how credit unions determine the monthly fee for this service.
  • Callahans also did a webinar broadcast on Bill Pay strategies (available as a webcast now on cd-rom). One of the speakers was Schools Financial Credit Union (CA) that made the decision to not charge members last August. Their presentation outlined their justification, strategy, goals, and results.

    Also, you should check out the Bill Pay category in the Info Center for all the related articles and resources on this important subject.
  • We are a medium sized credit union. Looking at Free vs. Fee Bill-Pay, I see there is a significant savings for larger institutions (economies of scale) on a per member basis. Are there any medium or small credit unions that offer this service for free? What is your experience and has it been a proverbial "moneypit"?
  • We currently charge for bill pay but may offer free in the very near future. Does anyone have any criteria for "free" such as comination of deposits or loans, etc?
  • We are going to put bill payer on our site and we would like to charge for it as it does add to the value of our otherwise fee site. We are thinking of 4.99 to 6.99 after and introduction period of maybe up to 90 days.
  • I have noticed the bank's in our area started charging a few years ago or maybe offered a few months free but now several have taken this as a cross-sell opprtunity and are offering it free - curious what you have found.
  • I am a former corporate CU employee who now consults for credit unions needing secondary research. For a bill pay assessment, I recently looked at 30 California banks' web sites examining their bill pay options. Twenty-three offer free bill pay (10-20 bills free per month). Seven charge $2.95 -$6.95 per month. Eleven restict free BP to customers with an account relationship (e.g., high balances of $5,000+ but CDs not included--or direct deposit). Five imposed inactivity fees ($5.00 or so) for no BP activity ranging from one to 12 months.