Wednesday, June 2, 2010
Alternatives to Online Bill Payment May Drive Stronger Engagement
To try to simplify the signing up for online bill pay (and reduce first year attrition), some banks have moved to promoting the payment of bills using debit and credit cards. In the case of using a debit card, the payment still is taken from a customer's checking account and the process for signing up can actually be easier than with a traditional biller. In addition, using a debit card for bill payment can generate interchange income for the bank, rewards for the customer, and if the payment is recurring, it will not be subject to the new Reg E stipulations.
Chase Bank has done an excellent job of promoting bill payment using debit and credit cards through an online tool called Chase Payee Directory. With this tool, a customer can select the company they want to pay with an interactive directory.
With the goal of getting new and existing checking customers to use their checking account becoming as important as retaining the customer, these forms of moderate innovation will certainly become more commonplace.