By Patti Murphy
ProScribes Inc.
Earth Day came in April during NACHA Payments 2013, an annual conference that brings together key players in the movement from paper to electronic payments. I found it a bit ironic because several years ago, when the economy was bustling, NACHA - The Electronic Payments Association launched a campaign called PayItGreen to promote the notion that electronic payments were good for the environment.
Today the PayItGreen campaign is moribund, the victim of budget cuts at sponsoring organizations and a leadership change at NACHA. But that's OK because the migration to electronic billing and payments appears to be getting a kick start, this time from the mobile revolution.
Surveys recently completed on behalf of the banking technology company Fiserv Inc. show significant inroads have been made getting billers and consumers to adopt paperless billing and collections.
The company also reported last month that in a two-year period, it has seen a tripling of transactions through its biller-direct solutions and its own consumer bill payment portal, MyCheckFree. Biller-direct programs allow consumers to receive from and pay bills to multiple companies through a single bill-payment website, such as MyCheckFree.
Separately, the Federal Reserve reported in 2012 that 62 percent of underbanked mobile-phone owners have paid bills using their mobile devices, compared with 47 percent of all mobile-phone owners. What we're witnessing is an "intersection between mobile and billing," Eric Leiserson, Senior Market Analyst at Fiserv, said during an interview at the NACHA show.
"The rapid growth of mobile bill payments is having a significant impact on billers," was how Gwenn Bezard, Research Director at the consultancy Aite Group LLC, described the situation in a recent press statement.
"Billers of all sizes and across all verticals are responding to deliver better mobile bill payment capabilities, as consumers turn to their smart phones and tablets to conduct financial transactions," he added.
A cessation by the U.S. Postal Service of Saturday deliveries (something it has suggested) could provide additional momentum, Leiserson said. Any delay in the receipt of mailed payments is a concern to billers, as it hampers cash flow and distracts call center personnel from other more productive functions, he noted.
Fiserv informally surveyed bankers, billers and vendors recently and found 59 percent agreed with this assessment; 41 percent expect the loss of Saturday postal deliveries to result in more customer service calls concerning late payments.
Meanwhile, other surveys point to consumer adoption of mobile devices increasing across all demographic segments. Eight percent of households that lacked any type of access to the Internet in 2012 are now online, according to TechNet. TechNet is a bipartisan political network of senior executives from major companies (like Visa Inc. and Microsoft Corp.) focused on promoting technology initiatives.
In a research paper titled Mobile Bill Presentment and Payment: Creating Value for Billers and Consumers, Fiserv points to a noteworthy increase in consumer interest in the mobile channel for electronic billing and payments: about one-third of nonusers said they were interested in receiving billing statements via their smart phones.
The top reasons consumers gave for favoring the idea of mobile bill presentment were time savings (50 percent); anytime, anywhere access (44 percent); and convenience (43 percent).
"In the past year alone, bill payment via mobile devices among smart-phone users increased 41 percent, and this growth is expected to continue with the fast pace of technology adoption and feature enhancements," Fiserv wrote.
From a biller's point of view, the key motivations for going mobile are to enhance and extend customer service, which topped the list with 94 percent of those surveyed for Fiserv's Biller Mobile Bill Pay Benchmark Study. Rounding out the top four reasons billers gave for going electronic were increasing paperless billing (82 percent), increasing customer self-service (76 percent), and meeting customer demand (74 percent).
Of course millions of billers are still wed to paper billing statements. Now, there's a way around that: get customers to use the photo function on their smart phones. It's an offshoot of the mobile check deposit movement.
Mobile Photo Bill Pay, developed by Mitek Systems Inc., a San Diego-based firm that specializes in mobile imaging solutions, has developed a smart-phone app consumers use to set up electronic payments through their banks. This is just the latest innovation utilizing the patented technologies that underlie Mitek's mobile remote check deposit solution. The company held demonstrations at this year's NACHA Payments.
After signing up with their financial institutions for online bill payment, customers (consumers or businesses) can now simply snap photos of the bills they want to pay, verify the payment information and click the app's "Pay" button.
The Mobile Photo Bill Pay app eliminates the need to set up individual payee information, as Mitek's technology extracts data from each photo image and automatically provides that to the financial institution's bill-processing system in the format required.
In addition, Mobile Photo Bill Pay is template free, which means it supports a range of biller formats and makes it a turnkey solution for banks. Mike Strange, the company's Chief Technology Officer, noted that Mitek's "secret sauce" is the math behind data extraction techniques.
"In an era being defined by the intimacy and utility of smart phones, we see Mobile Photo Bill Pay as a major convenience for users and one more way for financial institutions to strengthen bonds with their customers and ultimately increase loyalty," Jim DeBello, Mitek's Chief Executive Officer, said in a statement announcing the product. In an early May 2013 presentation to analysts, DeBello suggested numerous other potential applications, including taking a photo of a credit card statement to initiate a balance transfer.
Three banks already have launched Mobile Photo Bill Pay: U.S. Bank, City Bank Texas, and First Financial Bank based in Abilene, Texas.
Allied Payment Network Inc., a bank services company, also has integrated the technology with its mobile bill payment services, according to Mitek. "We believe Mobile Photo Bill Pay will be key to a bank's digital strategies," DeBello told analysts.
So forget about just making payments "green." All the real action (and traction) is in mobile, as in mobile billing and payments, which is more about being cool than being green.
Patti Murphy is Senior Editor of The Green Sheet and President of ProScribes Inc. She is also the founder of InsideMicrofinance.com. Email her at patti@greensheet.com.
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