Aite Group Evaluates Bank Opportunities for Card-based Online Bill Payment

30 September 2008

A new report from Aite Group, LLC evaluates the opportunity for banks to reach customers via card-based bill payment over the online channel. The report reveals demographic characteristics of those most likely to pay bills with credit and debit cards, and identifies the benefits banks will experience and the impediments banks will face in promoting card-based online bill payments.

As the growth rate for traditional online bill payment slows, Aite Group believes that banks will find their highest rate of growth in online bill pay from card-based payers. More than two-thirds of online consumers currently pay a portion of their monthly bills with a credit or debit card, and according to Aite Group forecasts, electronic card-based payments will account for 10% of all consumer payments by 2012 - double its percentage from 2007. However, while the demographic most apt to pay with cards is an attractive group to banks, there are challenges to overcome to convince the group to use their card to pay bills online. "Aite Group believes that the benefits of enabling card-based payments outweigh the negatives for both banks and billers," says Ron Shevlin, senior analyst with Aite Group and author of this report. "The business case for card-based bill payment lies in the opportunity for banks to attract and interact with an attractive set of consumers - consumers that are young, relatively affluent, and (most importantly) actively involved and engaged with the firms with which they do business."

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