Only $36 Billion of $2.1 Trillion Bill-Payment Market Paid Via Mobile Devices

The impact of tablets and smart phones on payments is largely unfelt in bill payment with only $36 billion of the $2.1 trillion in annual bill payments made by these mobile devices, finds a new report from consultancy Javelin Strategy & Research. That equates to about 5% of U.S. consumers.

The seven most common bills are mortgages, utilities, credit cards, vehicle loans, mobile phone, student loans, and store-branded credit cards.

The most popular method to pay bills is on the biller’s site, the Javelin research finds. In the survey of more than 5,600 consumers in March, 37% of them turned to biller Web sites followed by 31% sending a check in the mail, 25% using their the bill-pay service from their primary financial institution, 22% visiting the biller’s location, 10% using their secondary financial institution’s bill pay service, 8% using a telephone, 4% using a third-party bill pay service and 2% selecting another method.

Particularly revealing is just how reliant consumers have become on using their mobile devices as money- management aids. The survey found that 39% manage financial tasks on smart phones in 2013 compared with 22% in 2012.

Getting more consumers to use their smart phones to make bill payment rests on ensuring consumers understand their payments will be recorded and documented properly, Javelin says. That could mean alleviating anxiety over the security of mobile bill payment, which at 43% is the top reason consumers cite for not paying a bill on a mobile device.

Javelin says early-adopting consumers use mobile bill pay now, representing 37 million, or 26.4%, of the 140 million U.S. consumers that Javelin calls “critical early targets” for mobile bill pay. These consumers bank online, use mobile banking, and use their primary financial institution to make bill payments.

A set of 11 million, 7.9%, bank online and use mobile banking, but do not pay their bills through their banks. Javelin says this group is often unclear about the benefits of bill-pay services through their banks.

Another group of 55 million, 39.3%, bank online and pay bills via their banks, but do not use mobile banking. “Teaching them the benefits of paying bills on a mobile device could be a catalyst to try mobile banking,” the report states.

The last group, the underbanked, consists of 37 million, or 26.4%, of consumers. This group could be motivated to bank by mobile phone because they want safer and more convenient ways to pay bills than by doing so in person in cash.