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Boston, MA, September 22, 2008 –A new report from Aite Group, LLC reviews trends in consumer bill payment and presentment methods and channels, decrypts the changing online banking bill payment competitive landscape, and unravels myths surrounding cost recouping.
While most banks see strong value in offering bill pay and e-bills, various factors - including the deterioration of new online banking users' profiles, a downward trend on the average number of payments made at consolidator sites, and a greater tendency by consumers to optimize their payments - are prompting banks to focus more on recouping their bill payment costs. Banks are moving away from hoping to reduce their bill pay cost by engaging in insourcing initiatives, or so-called, or so-called "least-cost routing approaches." Instead, they are emphasizing fee-driven payment services to recoup the cost of offering bill pay.
Even so, the report finds that banks hoping to recoup a significant portion of their bill payment costs by introducing expedited bill payment will be in for a big disappointment, as expedited bill pay will recoup no more than 3% to 5% of banks' costs of offering free online bill payment by 2012.
"Banks should bet more chips on enhancing their online marketing capabilities than on cost-recouping initiatives," says Gwenn Bézard, research director with Aite Group and author of this report. "Banks have plenty of room, for instance, to make a better use of their bill pay data for marketing purposes."
Companies mentioned in the report include: Alacriti, Bank of America, BNY Mellon, ChoicePay, Digital Insight, Discover Financial Services, First Data, Fiserv, Fidelity Information Services, Fort Knox National Company, FSV Payment Systems, Harland Financial Solutions, iPay Technologies, JPMorgan Chase, Kubra, MasterCard RPPS, Metavante, Online Resources, Public Service Credit Union, TSYS, US Bank, Visa, Western Union, and Yodlee.
This 47-page Impact Report contains 42 figures and one table. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right. 
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