On the Rise, Mobile Bill Pay Could Spur More E-Bill Presentment, Card Usage

U.S. consumers are rapidly turning to mobile devices to pay bills, and that trend in turn is likely to encourage more card usage for bill payment and more electronic bill presentment, according to a study released this week.

Some 8% of households with an Internet connection paid at least one bill with a mobile device last year, up from 6% in 2011, according to the “Billing Household Survey,” sponsored by Fiserv Inc. While still a relatively small number, the 33% increase is significant, says Eric Leiserson, senior research analyst at Fiserv. Saving time appears to be the biggest reason for using mobile for bill payment, with 50% of users citing this reason in the survey. Moreover, the smart phone is turning out to be the dominant device for mobile bill payment, with 12% of users paying bills with the device, up 41% from 2011. “That’s where the traction is,” notes Leiserson.

Tablet usage, too, is on the rise. Tablet ownership in the survey, which is the fifth annual study Fiserv has conducted, rose to 41% of respondents from 19% in 2011. Of the tablet owners, one-fifth had received from or paid a bill at a bank bill-pay site. Almost as many–19%–had paid a bill at a biller site.

By contrast, feature-phone usage appears to be losing prominence for bill payment. Nearly two-thirds of bill payers who used a mobile device relied on their browser, while another 18% used apps. Only 13% used text messages, and that number represented a decline. “Text-to-pay has actually dropped off compared to the mobile browser,” Leiserson says.

Whether by smart phone or feature phone, the rise of mobile bill payment could have significant implications for card payments and e-bills, according to Leiserson. It could also open up non-Internet households for the first time to electronic bill payments, Leiserson says. “That’s going to be something special,” he says. “[These households] now can be connected to the Internet in their pocket. It opens up to billers new incremental electronic transactions.”

At the same time, the ability for billers and financial institutions to send alerts to customers’ mobile phones could encourage more acceptance e-bills. So-called electronic bill presentment, in which consumers receive bills via e-mail rather than through the mail, has struggled over the years to win consumer adoption. Major efforts such as the Electronic Billing Information Delivery Service (EBIDS) from NACHA, the regulatory body for the automated clearing house, have tried to solve this issue by combining secure electronic bill payment with bill delivery.

But now, with more consumers carrying mobile devices and using them to pay bills, mobile alerts about bills that are nearly overdue could spur users to retrieve the bill or sign up e-bill presentment to avoid late charges, Leiserson reasons. In Fiserv’s survey, some 71% of consumers indicated receiving a bill-due alert would raise the odds they would sign up for e-bill presentment. “It’s a reminder to pay that’s actionable wherever you are,” he notes, adding that such alerts could be a “game-changer” for e-bills.

Mobile could also lead to more credit and debit card usage to pay bills, as well, since most on-the-go consumers aren’t likely to have a checkbook or checking-account details with them when they pay. “Now that we’re in the mobile age, how are people going to pay for things if they don’t carry a checkbook around?” Leiserson asks. Some 55% of consumers either don’t carry a checkbook or seldom do, according to the survey. Leiserson says such consumers are likely to use a card for bill payments. “It puts the credit card front and center,” he says.

Fiserv conducted the survey in May of last year. Some 1,600 respondents completed an online questionnaire, while another 400 were surveyed by phone.