generally a slow process even if the reasons to do so are
compelling. This appears true of bill payments in the US where
despite the advent of direct electronic debits and more recently
online bill payment services the primary means of bill payment
remains the mail, reveals an analysis by the United States Postal
Service (USPS).
Based on 2007 survey data the USPS found that on average an
American household pays 12.1 bills per month of which 7.5 (61.9
percent of) are paid via the mail. Overall 92.4 percent of
households paid at least one bill via the mail each month, down
only marginally from 95 percent of households surveyed in
2004.
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In second and third positions, but well behind the mail, was the
internet at 1.9 bills per month (15.5 percent of all bills) and
direct cheque account debits at 1.4 bills per month (11.4
percent).
Undoubtedly online bill payments are making an inroad into the
USPS’ market, as in 2007 30.1 percent of households paid at least
one bill via the internet – a notable increase from the 22 percent
in 2004.
The pace of adoption of online bill payments did, however, show
signs of easing in 2007 following a rapid uptake between 2003 and
2006, a period during which most banks introduced free online bill
payment services. Notably between 2003 and 2006 the average number
of bills paid online increased from 0.7 to 1.6, a CAGR of 31.7
percent. In 2007 the rise to 1.9 bills paid online represented an
increase of 18.8 percent.
Growth in the use of direct debits to pay bills has slowed
appreciably in recent years. This follows a rapid uptake by
consumers between 1998 and 2002, a period that saw the average
number of bills paid via direct debit per month increase from 0.4
to 1, a CAGR of 25.7 percent.
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By GlobalDataBetween 2002 and 2007 the increase from 1 to 1.4 bills per month
represented a CAGR of 7 percent. Households making use of direct
debits increased slightly from about 50 percent in 2002 to 53
percent in 2007. USPS data reveals that scope undoubtedly exists
for a far more significant inroad into mail bill payments by online
and direct debit services.
In its study the USPS noted: “There has been little change in the
type of bills and the percentages paid by mail since 2005.” Of
significance in this statement are the types of bills paid via
mail. For example, the USPS found that in 2007 66 percent of
households paid their telephone bills by mail. The total number of
telephone bills paid was a staggering 2.11 billion. The situation
was similar in bills for utility services such as electricity,
water and sewerage where between 50 percent and 66 percent are paid
via mail. A total of 2.64 billion utility bills were paid in
2007.
Outdoing all these were credit card bills which represent the
largest number of any category. A total of 3.6 billion were paid in
2007 of which 62 percent were paid via mail, little changed from
the 65 percent in 2005.
