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BizReport : Internet : March 13, 2011

93% would stop using online bill pay services if charged

When Mintel asked consumers what they'd do if their financial institution started charging to use online bill pay services the reaction was overwhelming - they'd stop using them.

by Helen Leggatt

MINTELLOGO-b.jpgKeen to divert their customers to use online banking, many financial institutions charge for paper-based statements while keeping online services free.

Online banking is a win-win situation for all parties - the banks save money on the production of traditional paper-based mailed statements and consumers get a convenient and free way of managing their money.

But, what would consumers think if banks, already restricted by regulations that prohibit certain revenue-generating actions, decided to start charging a fee for online bill pay services?

According to Mintel, 79% of consumers visit their banks' online website on a daily or weekly basis. However, if a bank were to introduce a $5 monthly fee to use online bill pay services a whopping 93% would stop using that service.

Not surprisingly, the larger the fee proposition the larger the number of those who would stop using the service.

"Most consumers would be loathe to pay for an online bill pay service, simply because there are other services that are offered free of charge," said Susan Wolfe, vice president of financial services at Mintel Comperemedia.

"So if banks start charging for online bill pay, they run the risk that customers will use another payment mechanism or go to one of the free third party services."

The most popular method for paying bills is by check, found Mintel. Making payments through the billing company's website comes in second, followed by credit card. However, paying bills directly from a personal online banking account comes in fourth.

Tags: Internet banking, online banking

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  • Its is amazing that when consumers can actually save the financial institution money and lower the transaction costs for the f.i. that they want to charge the consumer for the service. Gotta wonder why the banks ever needed help from the government. Maybe if they just helped their customers that would discover the answer.



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