As the volume of electronic bills climbs from one per cent of all bills in 2000 to 14% in 2004, offering electronic bill presentment and payment (EBPP) services will soon become a competitive necessity for banks, says research house IDC.
"Financial service companies in general are under siege from pure Internet businesses trying to encroach on their customer relationships by offering lower-cost products or by offering innovative value-added services," says Ian Rubin, director of IDC's ebusiness advisory research. "As more banks offer online services and the adoption of online banking grows, banks will need to offer electronic bill present and payment to remain competitive. This type of offering will solidify relationships with both bill-issuing and bill-paying customers."
IDC forecasts that by 2004, 40% of US banks with $3 - 9.9 billion in assets will offer EBPP, and among banks with more assets, this percentage rises dramatically.