US online bill payment to penetrate 63 million homes by 2014 - Forrester
16 June 2009 | 7422 views | 0
The number of US households paying bills online will grow from 48 million this year to 63 million by 2014, driven by consolidator sites like Yodlee, according to Forrester Research.
Forrester says that while the 5.4% compound annual growth rate is slowing, the market is still far from saturated.
The firm foresees a shift in the market as more consumers turn to banks and bill payment consolidators like Yodlee and Corillian. This will be driven by several factors, including the convenience of having multiple bills aggregated at a single Web site and the elimination of fees.
By 2012, consolidators' share of the online bill payment market will surpass direct billing by merchants for the first time, says Forrester.
Young consumers - who so far have shown less interest in using aggregators such as banks - will be a key battleground among financial services firms as the market matures.
Edward Kountz, senior analyst, Forrester, says: "To strengthen their position and better support these customers, banks need to add more payment options, deploy online and mobile alerts with greater visibility, and continue to hammer home the message that online bill payment is free."
A study earlier this year from fintech vendor Fiserv found that bank customers who pay bills online are over 15% more profitable and 76% more loyal than those that don't.
However, the provision of free online bill payment services to retail banking customers is also expensive, and will cost the US financial services industry $1 billion by 2010, according to research published by TowerGroup last August.