Processors Begin to Respond to Real-Time Bill-Payment Trend

More and more consumers now expect their last-minute bill payments to be credited to their accounts with near instantaneous effect. And, increasingly, billers and processors are meeting that expectation?or at least laying plans to. “The trend is toward real-time [bill payment],” says Dave Fortney, senior vice president for electronic presentment and payment at Milwaukee-based Metavante Corp. “That's a key customer requirement that'll have to be met in the future.” Pushing the trend is the increasing migration of consumers to Web-based bill payment, a tool that was once reserved for upper-income consumers who felt less pressured to make last-minute payments, sometimes called convenience payments. Now, says Fortney, that Internet demographic “has shifted, it's totally mainstream.” Also, in the walk-in and phone channels for bill payment, consumers have adopted convenience pay and are now seeking even faster account updates?sometimes faster than same day?to avoid service interruptions. “There's an expectation by consumers that they can make a last-minute convenience payment in real time,” Fortney says. Finally, the spread of convenience pay for bill payment also meant the spread of credit card payment, which has been seen as the most efficient?if not least expensive?means of guaranteeing expedited transactions for billers. Now, says Fortney, consumers are looking more and more to use cards for bill payments. And, if they use a card, they see the transaction as a real-time update. “The consumer's expectation is if they're paying with a card, it's a real-time event,” he says. “Billers have to be very specific” if they're not prepared to offer instantaneous account updates. Processors like Metavante and Online Resources Inc., Chantilly, Va., have begun to respond to this trend. Metavante, which supports online bill payment for 2,700 financial institutions, last month rolled out a convenience-pay product that offers real-time account integration for billers and supports payments via card, PIN-less debit, and the automated clearing house. Online Resources plans to introduce a real-time service early next year that will build on the base of some 1,600 biller clients it has taken on with is acquisition of Princeton eCom Corp. (Digital Transactions News, July 27). Those 1,600 biller connections, which Online Resources says is the largest such base in the market, could give the company an advantage in real-time payments. Fortney refuses to say how many such links Metavante has. “We're quite happy with our positioning in the market,” he says. “We feel we have everything we need to compete.” One advantage he claims for Metavante is the company's ability to cross-sell convenience pay to clients using the company's check-imaging and image-exchange products. “That's a big piece of our overall corporate strategy,” he says. “We have more than enough biller relationships.” At the same time, Metavante offers PIN-less debit for expedited payment, a service that has turned hot over the past 12 months as billers respond to its cost advantages over credit and signature-debit card acceptance. Indeed, Fortney says the absence of PIN-less debit would be a deal-killer with some biller clients. “There are some utilities out there who would not be interested in our product if PIN-less debit weren't part of it,” he says. With PIN-less debit, consumers pay their bills online by entering their debit card account numbers but not their PINs. The transactions flow through electronic funds transfer networks and carry PIN debit interchange. EFT networks have approved the application, however, for only a select number of low-risk biller categories, including utility companies and secured lenders. Metavante controls the NYCE EFT network, which it acquired in 2004, and through NYCE has connections to Star and Pulse, the other national systems.