Paper-based cheque payment for consumer bills remains high, despite a steady increase in electronic bill payment (EBP) adoption, according to a new study by ESP Consulting.
The report, "Consumer Billing & Payment Practices," shows cheques account for 75% of total annual household bill payment volume, down from 79% in 1998, a decline in share of 6%. Over that same period, however, the volume of cheques written for bill payments rose by 25%.
Leon Majors, ESP Consulting president, notes: "There are more households and more bills per household than there were three years ago...all forms of payments have increased in absolute numbers."
Results of the study show, in comparison, electronic payments account for eight per cent of total annual household bill payment volume. Cash still is used to pay six per cent of household bills, while credit cards and money orders each account for another two per cent of payment volume.
Cheque share of bill payments varies by the type of bill being paid, but it continues to decline in all categories. Credit card bills are most likely to be paid by cheque (88%), followed by utility bills (80%), communications bills (77%) and contributions (76%). Insurance bill payments (50%) are least likely to be paid by cheque.
Just over half (52%) of households use some type of electronic bill payment method to pay at least one of their monthly bills. There is little difference in EBP usage by age, but use increases as income and associated household bill volume increase. Just two-fifths (40%) of households with annual income below $35,000 use EBP, compared to two-thirds (67%) of households with incomes of $75,000 or more.
Of the 52% of households that use some type of electronic bill payment, 81% use ACH payments. This means that 42% of all households make at least one monthly bill payment through the ACH. First Class Mail (87%) continues to deliver more household bills than any other method, accounting for some 11.6 billion household bills annually.
PC-based bill presentment is used by just 4% of households accounting for an estimated 13.4 million bills or barely 1% of the total volume of bills that are not delivered by post.
"Three-quarters of those that receive bills via PC are having them sent by email while 15% are going to their biller's Web site. If those getting email bills are having them sent by the biller, then 90% of the households currently using electronic bill presentment are not using an EBPP service," says Major.
The study reveals that just 30% of the households that are receiving bills by PC are also paying these same bills online.