August 14, 2013 •Brian Watson
Paperless billing -- viewing invoices and statements online, instead of via a traditional print and mail channel -- has always been a pretty easy concept to sell to revenue cycle professionals.
Delivery happens in seconds, not days. Costly print and mail overhead is eliminated entirely. It’s fast, it’s automated, and it’s environmentally friendly. From the perspective of a group responsible for quickly, efficiently collecting from customers, what’s not to like?
There’s just one hang-up: many consumers still aren’t entirely convinced just yet. And, as one half of the billing/payment dynamic that generates the revenue that funds your bottom line, their opinions on bill delivery channels and payment technology are, well, pretty much essential.
What’s the Matter with Paperless Billing?
The good news is that consumer apathy towards paperless billing doesn’t reflect how people view online billing and payment technology as a whole. To the contrary, web-based bill payment is approaching a real critical mass, with more Americans choosing to pay online than ever before.
For example, the 2012 Fiserv Billing Household Survey reports that nearly 3 of every 4 U.S. consumers pay at least one bill a month online. That’s echoed by a Western Union report from earlier this year, which found that over 68% of all bills are now paid using online websites, mobile phones, or through auto deductions or recurring payments.
Unfortunately, consumer preference for online payment hasn’t extended to paperless billing.
That same Fiserv survey reports that only 48% of U.S. consumers receive at least one bill electronically each month. And research from sustainability non-profit Two Sides found that nearly half of consumers (44% to be precise) still prefer to receive bills by postal mail only.
Perhaps most damning, The Electronic Payments Association (NACHA) reported in 2011 that only 26% of all bills are delivered via electronic channels. So despite all the time and marketing dollars spent in support of increasing customer eStatement awareness and adoption, only an underwhelming one-in-four bills are delivered online.
And even that figure is a little overinflated when you consider the “double-dippers” – consumers that have signed up for online bill delivery and payment services, but still elect to receive a traditional paper statement at the same time. NACHA’s most recent PayItGreen survey pegs the number of eBill adopters that also double-dip with paper delivery at a robust 30%.
What Does Slow Adoption Mean For Your Billing Strategy?
Clearly, there’s a disconnect between online payments and bill presentment. While consumers have accepted the inherent value of web payment (it’s faster and more convenient than paying by phone or mail) and changed behavior accordingly, the benefits of paperless billing have yet to move the proverbial meter.
Despite environmental benefits, 24/7 statement access, and time-saving online customer service tools, three out of every four bills are still delivered by mail.
Okay, so we’ve established that paperless billing has been, to this point, less than the resounding success envisioned by many EBPP advocates. But what does that mean for your customer billing and payment program? For your online billing and payment strategy?
Paper Statement Quality Still Matters
While EBPP might get the lion’s share of headlines and attention, paperless billing’s adoption issues underscore the importance of paper statement processing. In short, statement print and mail isn’t going anywhere any time soon.
Because three-quarters of all bills delivered to customers are still of the paper variety, it pays to spend a little time and attention improve the quality of your statement offering. That goes for everything from statement design and copy, to print and mail practices, to your return mail program. After all, if statement processing is going to be your primary delivery channel for the foreseeable future, you might as well make sure it’s operating at peak performance.
Online Payment Is a Must-Have
Several years ago, ePayment was in roughly the same position as paperless billing is today.
Early adopters had bought into the technology; others dabbled, paying a bill here and there when the notion (or more likely the threat of late payment) arose. But adoption was still at a “fringe” level, and the costs were still imposing enough that billers had a built-in reason for putting off implementation.
Sure, it sped receivables, and reduced collection costs by automating common posting and reporting tasks. But was the audience there to justify the investment?
Today, the answer to that question is a resounding “YES”. Only 20% of bills are paid by mail-in payment. Eight percent are paid in-person. Three percent are paid via landline phone. The point is that, whether via biller direct or using a bank-affiliated bill payment website, online payment is now the go-to payment channel for a majority of U.S. consumers
There’s no need to spend tons of time and money educating and convincing consumers that ePayment is right for them. The demand is already there.
Paperless Billing Will Be Too… Some Day
Despite disappointing usage data, no one is suggesting that you jump off the paperless billing bandwagon any time soon.
Every new technology has to struggle through an adoption curve. And, with clear advantages over print-and-mail delivery, paperless billing is likely to eventually reach usage levels similar to online payment.
For example: that NACHA study which pegged paperless billing at just 26% of the total number of bills delivered in 2011? It also found that 82% of study respondents also experienced an increase in year-over-year eBilling adoption.
While eStatements has strong potential for growth, building customer adoption levels will require a patient, long-term approach. Paperless billing simply isn’t the slam-dunk choice that online payment is for web-savvy consumers. Some people still really appreciate receiving a hard-copy paper billing reminder every month.
Whether that's for record-keeping or to avoid missing an email notification in a crowded inbox, to convince them to make the switch, you'll need a marketing strategy with the right mix of education and incentives. And, after they’ve decided to take the paperless plunge, a web presentment system that’s easy to sign-up for, access, and use.
Looking to jump-start paperless adoption and use? Consider the following best-practices:
• Support online bill presentment with a persistent (but customer-friendly) email notification system. Consumers tend to struggle remembering to pay their bill without receiving a paper statement each month (at least initially). So offer multiple email reminders spread strategically throughout the billing period.
• Ensure your email arrives safely in each customer’s inbox by incorporating a mandatory email link during the signup process. That keeps emails from accidentally being flagged as spam.
• Incorporate mobile into your billing toolset, including SMS text message or IVR voice notification when a new bill is available online, and a simple, smartphone-optimized version of your web payment platform.
• Consider making eStatement delivery the default option for new customers.
• Quickly increase adoption by targeting customers that are most likely to make the switch to paperless billing, including groups that already use online payment and younger demographics.
• Educating customers by going beyond the obvious “green” benefits to focus instead on convenience and the value-added online billing tools you offer.
• Incentivizing sign-up with discounts, rewards, and special promotions.
Have you had success converting ePayment customers to paperless billing users? Tell us how in the comments section below.
