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With a number of startup companies now offering bill-pay capability based on smart phones, old-line payments companies are starting to respond with services of their own, relying on their reputations as established players in electronic payments.
One of the first is The Western Union Co., which this week introduced a version of its Speedpay bill-payment service for Android, BlackBerry, iPhone, and iPad devices. The service will let consumers receive bills as encrypted e-mail attachments prepared by Striata, an e-bill presentment provider that has worked with Western Union for several years. Consumers can open and pay the bills with a couple of clicks, with payments processed by Western Union as automated clearing house credits or credit or debit card transactions.
Western Union will not disclose how many billers use Speedpay, but it is approaching clients now to go live with the mobile version. David Shapiro, senior vice president for payments at the Englewood, Colo.-based company, says he hasn’t made any projections for how many will sign up. “The honest answer is, we don’t know, but we’re bullish on the opportunity,” he tells Digital Transactions News. Integration work for billers is minimal, Shapiro says, with most of it concentrated on formatting billing data for the attachments delivered to customers.
Western Union has offered Speedpay as an online service for years, but decided to add the smart-phone capability as it saw more and more consumers using the devices. “We did it as a response to the growth of smart phones and the growth of Gen Y consumers,” Shapiro notes.
The benefit for billers could be faster cash flow as well as lower costs in preparing and serving bills. Experts say mobile bill presentment and payment speeds up payment, as handset users tend to pay bills much sooner than those who get bills through the mail or online. “If you see a bill on a mobile device, you’ll say, ‘Oh, let’s pay this right now rather than wait until the day it’s due,’” says Mark Schwanhausser, senior analyst for multichannel financial services at Javelin Strategy & Research, Pleasanton, Calif. Doxo Inc., a Seattle-based startup that in May added a mobile app for bill presentment and payment to its online document-management service, says mobile users are paying bills on average 10 days sooner than they do with bills received through the mail.
Doxo is one of several startups, including companies like Palo Alto, Calif.-based Pageonce Inc. and New York City-based Manilla Inc., that have introduced mobile bill-presentment and payment services since last fall. Individual billers, too, are iintroducing the capability. Schwanhausser says more such services are likely to emerge. “This is where things will be going,” he says. “We’re seeing billers using smart-phone or table apps to let people pay.”
Shapiro won’t comment on any competitor. But in a reference to the startup status of entrants so far, he notes Western Union’s tenure in the payments business. “Both [Western Union and Striata] have significant scale and capability,” he says.
“Billers are looking for established track records.”
The mobile bill-pay feature is the second new payment service Western Union has introduced in recent months. In March, it rolled out WU Pay, a service that allows consumers to pay e-commerce merchants through their online-banking portals or by paying in cash at Western Union locations. The service is based on technology developed by eBillme, which Western Union acquired in October.
