The accounting industry has changed dramatically with the advent of online banking. And with each day more and more individuals are migrating to the Internet to bank. In fact, more Americans than ever, an estimated 63.1 million households or three-fourth of those online, are paying their bills online rather than writing checks, according to a survey by CheckFree. This means that you, as an accountant, will have to have a firm foundational knowledge of online banking across various mediums.
The survey mentioned above indicates that consumers are more confident about online security as more Americans are gaining experience in using Internet services, making security concerns less of a barrier to online bill payment adoption than in the past. In the latest survey, only 13 percent of respondents cited online security as the top reason for not using the online bill payment service, down from 17 percent in the 2007 survey. Overall, online security ranked third among barriers to online bill payment adoption this year, compared to its number-one ranking in 2007. The primary barrier (15%) in the new study was “I don’t know enough about how it works.”
An estimated 31 million households are using online banking websites to pay bills, 47.9 million households are using biller websites and 16 million are using both online banking and biller sites to receive and pay bills. Approximately 63.1 million of Internet-using households pay at least one bill online in an average month, up from 61 million in the 2007 survey. These households collectively paid 934 million bills in a typical month, according to the survey results.
Online bill payments continued to outpace check bill payments for the second consecutive year. Online bill payments made at both bank and biller websites rose to 42 percent of the total volume of household bill payments made each month, up from 39 percent in the 2007 survey. Online bill payment adoption has significantly grown since the 2002 survey, when only 14 percent reported paying their bills online.
Check payments among survey respondents who use the Internet fell to their lowest level in six years, accounting for only 31 percent of the total volume of household bill payments – down from the 34 percent recorded in the 2007 survey. Check bill payments have fallen by half on a percentage basis since January 2002, when Internet-connected Americans made 61 percent of their bill payments by check. Still, 59 million online households pay at least one of their household bills each month by check.
“As more consumers gain experience and become more comfortable using the Internet, their confidence in online security grows and we see an increase in the adoption of online banking and bill payment services,” said Todd Lesher, division president, CheckFree electronic Banking Services, now part of Fiserv. “For a minority of users who haven’t used the Web as long, we see that security concerns remain a significant barrier to online banking and bill payment adoption. We continue to work closely with our financial institution customers on joint programs that help educate consumers that online financial services are safer and more convenient than traditional, paper-based methods.”
Survey findings include:
- Internet-using households pay an average of 11 bills per month. Consumers use an average of three different ways to pay bills, with online, check, automatic debit and in-person topping the list of popular bill payment methods. Online bill payments at bank and biller websites comprised 42 percent of total monthly payments, followed by 31 percent of bills paid by check. [See Chart, “How Consumers are Making Their Monthly Bill Payments.”]
- Fifty-one percent of survey respondents cited the environment as a reason why they chose to view and pay bills online. Of these, 72 percent identified paper and clutter reduction as chief benefits, followed by tree conservation (19 percent) and reduction in gas consumption (16 percent).
- Saving time and gaining control over their finances were major online bill payment benefits cited by 44 percent of respondents. Consumers surveyed also cited other important reasons for paying bills online, including eliminating the hassle of writing checks, enabling them to pay all bills in one step and saving the cost of stamps.
Tags: accountants, Accounting, accounting services, americans, banks, bill payment service, business finance, certified public accountants, checkfree, consumers, CPA's, financial findings, harris interactive, households, liz roz, online banking, online security, paper checks, pay bills online, paying bills, personal finance, research report, survey, Vcorp, vcorp services
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