Aite Group estimates that 25% of small businesses will adopt Electronic Invoice Presentment and Payment (EIPP) over the next few years. By year-end 2010, this service could generate more than US$705 million in additional fee-based revenues for banks...

Boston, MA, December 11, 2006 – In a new report, Small-Business Banking: The Value Proposition for Banks to Offer Small-Business EIPP, Aite Group evaluates the size of the EIPP opportunity for U.S. banks and builds a case for banks to offer the service. EIPP has the potential to help banks in their pursuit to deepen small-business relationships, generate fee-based revenues, differentiate themselves, and acquire new customers. The report is based, in part, on the results of Aite Group's omnibus survey of 278 U.S. small businesses, in which 67% of respondents expressed some level of interest in the service.

Banks have not traditionally offered EIPP to this customer segment. In fact, Bank of America was the first U.S. bank to offer such a service in June 2006. Other banks are likely to follow, however, as winning the wallets of small-business customers has become a top priority for most U.S. banks. Offering the service will create a paradigm shift for the industry; those banks that do not offer it risk losing not only additional revenues, but also market share to non-financial entities that are increasingly offering bank-like products.

"Banks need to set aside their previous misperceptions about small businesses and begin to view these customers as important potential revenue generators," notes Christine Barry, Research Director with Aite Group and author of the report. "Small businesses already spend approximately US$353 billion on financial products. By cross-selling additional services like EIPP, banks will not only increase that spend, but they will better meet the needs of this important customer segment."

The report also includes a short case study on Bank of America's recently launched EIPP product offering, as well as brief descriptions about some of the current and proposed offerings of leading vendors such as CashEdge, CheckFree, PayPal, Transcepta and Yodlee.

This 32-page Impact Report contains 13 Figures and 1 Table. Clients of Aite Group's Wholesale Banking Service can download the report by clicking on the icon to the right

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