Study Says 2016 Is the “Tipping Point” for eBill Usage

HERNDON, Va., February 3, 2011 – When will eBills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.

The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the eBill market, indicating that a total of 5.1 billion eBills were delivered in 2010 alone. However, some consumers are moving to adopt eBills more slowly than anticipated.

“After easily converting the ‘early adopters’ to eBills, billers are realizing that the second and third tiers of consumers will take more time to convince,” said Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see eBill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”

Nine of ten of the companies surveyed rate eBill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said eBill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.

“eBills have not reached their full potential, but they’re gaining momentum,” said Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”

Of those surveyed, universities had the most successful eBilling programs by far. Most universities can mandate eBilling for their students or use a customer opt-out approach rather than an opt-in approach.

“Most billers ask their customers to opt-in to the eBilling program,” said Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”

Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.

“Once customers truly understand eBilling, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for eBill adoption.”

  • Jack

    Another nail in our coffin.

  • M. Jamison

    No, not another nail. Anyone who has been paying attention realizes that electronic diversion of payment mail was inevitable. That doesn’t have to mean the end of the Postal Service provided someone realizes that the network itself is an asset. As bill presentment subsides last mile delivery will increase. As bill presentment becomes electronic there is a significant opportunity to use our data network capacity to accept and process bills from the significant segment of the public who will be late adopters.
    Understanding that the network is an asset, not a burden, will allow us to envision a whole range of utility that doesn’t compete but facilitates. Those who see the Postal Service as simply a competing business entity fail to grasp the understanding of the Founders, who saw the need for communications infrastructure that binds the nation together. They envisioned the Postal Service as infrastructure, similar in purpose and design as roads and canals as a means of facilitating commerce. That vision is just as valid today. There is a place for a healthy Postal Service well into this century, the key is putting aside a limited model that never fit or worked very well.

  • Mailer

    An e-mail too easily gets glanced at, forgotten about and migrates off the top of the inbox.

    I pay most bills online (no shenanigans with delaying my checks to generate late fees) but prefer paper statements despite efforts to get me to “go green” and “save trees” (when they really mean “save us FCM postage”; if they could save five bucks per customer per year but had to wipe out an acre of rainforest daily, drown puppies or club baby seals they’d do it in an instant).

  • Jack

    The network theorum is valid so long as you cede all of the profitable areas to be served to competitors. Last mile delivery will be available solely because it is not profitable for private industry to provide. So the last mile providers will need to be much fewer in numbers with much reduced compensation and benefits to be attractive to those needing such services. They would close the post office rather than hook them back into government appropriations to operate. Rural carriers may survive in some subsidized manner but not too much else I would imagine.

  • Ben F.

    Jamison says it well. There are 151,000 routes that serve 150 million delivery points each day, and they could provide all sorts of services while on the route – delivering mail, last mile for UPS and FedEx low priority packages, auto-reading utility meters, checking on Grandma for a monthly fee, etc. A great use of the most trusted guy in the neighborhood. The problem is that the 2006 PAEA Act prohibits USPS from doing anything that does not involve direct paper mail. So most of those ideas – which have been proposed by many folks for years – won’t fly until Congress authorizes it with additional legislation. And Congress won’t move a muscle until USPS, big mailers, unions, and other large stakeholders all agree on what to do. That’s the nature of Congress – won’t do something that aggravates big groups like above. But the crisis is coming as costs don’t drop as fast as revenue.