E-Bill Payment: Is the Check Really in the Mail?

Online bill payment is catching on with the public, even though some of us are realizing some of our greatest fears. That is, bills that don't get paid after we go through all of the required electronic motions.

It happened to me recently when I discovered my telephone bill had not been paid. After checking my records, retracing my steps and ensuring I had done everything right electronically, I dropped the bank an e-mail.

Several days went by without a reply. When I contacted the help line by telephone, the customer service representative said that records indicated the bill had been paid. A three-way call to the phone company revealed the payment had never been received, and of course, no one could explain why my e-mail inquiry went unanswered.

The Trust Factor

In the end, the bank straightened out the error with the phone company, and so far, we've all lived happily ever after. But it brings the issue of consumer trust clearly into focus.

I have paid my bills online for well over a year now with minimal problems. But it only takes one important unpaid bill to turn me into a relative skeptic.

My bills are paid through the Web site of one of the largest banks in the U.S. That the bank would always uphold its end of the electronic bill paying agreement should be a given.

Whatever happened with this one bill will not cause me to go back to writing checks, but it does give me reason to question the system.

That brings us to the real problem: What about consumers who have not tried online banking because they're afraid their bill payments will get lost in cyberspace?

The Convenience Factor

Many of them are dragging their feet in moving their bill paying activity online. Since the terrorist attacks in September, a number of major banks have reported little measurable growth in customer acquisitions for new online bill payments.

In addition to a lack of trust, the system has yet to integrate itself to a point where consumers can go to a central location to see the majority of their bills. According to Jupiter Research, American bill payers want to be able to see at least five of their monthly bills online. The current average is about three.

The 9/11 Factor

While businesses have to exercise caution right now in even the appearance of capitalizing upon the tragedy of September 11th, this is nevertheless a time when online billers could be gaining countless new converts.

With the biological threats of the past few months still looming large, 32 percent of respondents to a Dove Consulting survey last month said they would consider viewing statements and paying monthly bills online.

Of those, 50 percent said the main reason for considering online bill payment was their lack of trust in the U.S. mail system to get their payments in on time.

Further, despite the slow growth in new customer acquisition among major players, Dove Consulting found 7 percent of Americans have started paying bills online or increased online bill paying activity since the terrorist attacks.

Converting the Masses

So how will online billing break into the mainstream?

First, mistakes such as the glitch with my telephone bill have to be eliminated. Or at least the customer service response to such mistakes will have to take some of the burden of handling the problem away from the consumer.

Second, major billers, banks and creditors need to somehow integrate their efforts so consumers can easily click into one site to view statements and pay bills. That site needs to be clean, user-friendly and fast.

Above all, online bill paying services need to be ready for an onslaught of new customers if that happens. According to the Yankee Group, the anthrax scare will result in a 20 percent increase in enrollment by this spring.

But if online payment sites cause consumers to get nasty notices from the phone company, consumers are likely to retreat.

What do you think? Let's talk about it.