Sep 22, 2016
We are now just one month away from Money20/20, a conference and trade show billed as “the world’s largest payments & financial services innovation event.” Now in its fourth year, the show has grown to more than 10,000 attendees, 500+ exhibitors and about 125 educational sessions. This will be my third year presenting and moderating at the event, with our research helping to cover the household bill pay component of the broader payments market that will be on exhibit.
This year, I will be hosting a session entitled Transforming the Bill Consolidation Market: Research & New Entrants. The term “bill consolidation” is descriptive of the process of bringing recurring bills (delivered digitally) together in one location. The primary way that consumers are doing this today is via bank bill pay services, but we have also been tracking non-bank consolidation services (sometimes referred to as digital mailbox services) and their efforts to solve for the consumer desire to have a better centralized digital location to review and pay bills.
In anticipation of this year’s event, I reached out to past panelists to get their perspectives on the state of this market niche, as well as the developments within the broader household bill payments space. Here is what they had to say:
“In our biller conversations, the primary shift we’ve seen is from document-centered thinking towards payments. Documents, especially e-docs, are becoming—and should be—free. So if you’re serving this market and still trying to make your money on documents, you’re dead. Our energy and innovation with billers is on improving key payment metrics: much higher mobile payment, accelerated collections, much higher auto-pay, eliminating customer support events. We’re driving incentive models that change consumer behavior to reduce payment cost per customer. Over 500,000 billers serve the U.S. market, but still less than 5% are reachable today on any of the existing electronic payment networks. That’s crazy. That’s what we’re solving. doxo’s focus is on bill pay innovation smaller billers can’t otherwise afford on their own, and that most larger billers don’t get around to.”
– Steve Shivers, Co-founder and CEO, doxo
“Card funded bill payments is growing significantly as overall consumer payment preferences and practices have swiftly shifted to plastic. This trend has put significant cost pressure on billers to absorb interchange costs. Meanwhile, the bill payments category is being ever more viewed as a strategic, recurring revenue touchpoint that has a measurable impact on customer satisfaction. Billers are trying to balance and manage payment costs with customer preferences in this new payment mix. Working through this has become the primary conversation we are having with billers. This will continue as consumers have become more concerned about bill payment security and feel cards are the safest payment method.”
– Eric Leiserson, Director of Market Insights & Research, Fiserv
“Millennials are in the driver seat now and they see the Digital Mailbox as an extension of their personal finances; however, receiving bills and documents is not enough anymore. They are looking for a single place to get their bills, real-time account balances and transactions, cash flow monitoring, and the ability to pay bills using their bank or credit card accounts. We are delivering on this vision today by implementing Finovera Bill Management Solution in banks and credit unions across the country.”
– Purna Pareek, Founder and CEO, Finovera
“In the past couple years, so much has changed and at the same time, so much hasn’t. A couple years ago, we were talking about the importance of multi-channel document distribution, the need for a simplified paperless process, the obstacles consumers face in turning off paper and the challenges that billers battle internally to make real change happen. That all still holds true today. But now we’re on the edge of seeing a real shift in the way billers communicate with their customers. It takes a major disruption, some key players to really move an industry forward. The way we do business is going to change. We’re seeing billers innovate and embrace the notion that their brand has to live everywhere and be accessible, 24/7. It’s not just about pulling them to your website or app anymore, it’s about meeting them and pushing your information to the channels they frequent and trust. That’s the vision we’re delivering with Inlet.”
– Chuck Cordray, CEO, Inlet
“Despite the proliferation of online bill payment solutions, Americans continue to struggle to pay bills on time. We collectively pay more than $26 billion in overdraft fees annually. During the first half of 2016, 18 percent of Mint users incurred a late payment fee on at least one credit card, costing millions. What’s surprising is that Mint customers who had late or missed payments had the money to pay but didn’t, often because they simply forgot. This underscores the fact that the fundamental challenge of effortless bill payment has not been met. Missed payments and late fees continue to have a real and substantive impact on our ability to achieve our financial dreams and current solutions are not meeting people’s needs. At Mint, we’re focused on delivering solutions tied to how people actually manage their financial life to solve this challenge so people never have to worry about a bill.”
– Al Ko, General Manager, Intuit Mint
“Bank provided bill pay functionality continues to be one of the most important features of digital banking to drive customer satisfaction, digital platform utilization, and retention. This relative importance of this feature has only grown as the Client base expands with millennial clientele that are more comfortable in digital banking. The need for banks to work with bill pay providers to offer an increasingly simple user experience is accelerating. The user experience and ease of use is particularly important as non-traditional mega-tech companies have jumped into the bill pay business within the past few months. To ensure a competitive client experience, it is important for the banking industry to move away from offering bill pay as a feature within digital banking, and integrate it as part of a broader financial ecosystem that works in synchrony with other digital financial services to meet every individual client’s needs.”
– John Ballantyne, VP, Product Development Manager, Treasury & Payment Solutions, SunTrust
Great insights from our past panelists. I look forward to continuing the discussion in Las Vegas on October 25th. See you there!
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InfoTrends is a leading market research and consulting firm that tracks the household bill payments market within its Transactional Communications & Payments advisory service.
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