Guest Opinion: Mobile Photo Bill Pay Offers New Revenue Stream
Nearly 90% of the U.S. adult population has a mobile phone and more than 108 million Americans have an Internet-enabled smartphone, according to a new Federal Reserve study, Consumers and Mobile Financial Services 2013.
For credit unions, providing new mobile banking services and in particular, alternative payment offerings such as mobile photo bill pay must be on their roadmap to ensure membership growth and increased revenue.
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Mobile photo bill pay uses the same underlying mobile imaging technology as mobile deposit, utilizing the smartphone camera to enable consumers to quickly and easily add a new bill payee and schedule or pay a bill by simply taking a picture of their bill or remittance coupon.
The technology extracts relevant information from the paper bill, auto-populates the fields required, verifies the user’s account information, adds the new payee and makes a mobile payment without the need for no manual typing or a computer. The user can then schedule the payment and click pay right from their mobile device.
Reaching the 100 million-plus 18-44 year old group of millennials is critical for banks and credit unions. Mobile services are a high priority for this demographic and research shows that if a credit union wants to successfully court and retain this customer base mobile photo bill pay can help. Why? Because mobile photo bill pay reduces friction, and quite simply, it’s fun.
Let me explain. Consumers have a strong dislike for laborious processes such as filling out forms or being forced to take multiple steps. This is often referred to as friction. Credit unions need to be focused on reducing friction such as the steps during the enrollment and transaction process. There are few bank transactions more important to consumers than getting their bills paid.
Additionally, customers love using their smartphone cameras at birthday parties, on vacation, and they especially think it’s cool that they can use them to enroll billers and pay bills quickly and easily. A credit union that looks upon this technology with only an return on investment focus misses this point: customers think this technology is fun.
So how big is this market? Many experts expect mobile photo bill pay to one day surpass mobile remote deposit capture. In a study conducted by Alix Partners LLP, mobile photo bill pay is forecasted to reach 33% of U.S. adult consumers by 2018 and result in 1.4 billion bills migrating to this channel.
Some of the additional benefits of mobile photo bill pay include convenience delivering customer satisfaction and loyalty. Services like mobile photo bill pay deliver an unparalleled convenience for customers. A recent survey by Harris Interactive and Yodlee reported that customers want convenience more than any other attribute from their banking experience. Additionally, the survey of 2,219 banking customers found that 63% of those surveyed said they stay with their current because of convenience.
Another benefit is being able to moving customers to the mobile channel. One of the biggest discussions among financial institutions is how to move customers from more expensive person-to-person service channels to less expensive digital ones. While some financial institutions have implemented things like fees to encourage customers to switch, mobile photo bill pay is a positive tool that can encourage customers to move to a credit union’s digital channels and mobile services.
Reaching a key demographic such as mobile users may also be beneficial. Research shows that mobile banking users are some of the industry’s most satisfied customers. Mobile photo bill pay provides an additional touch point to reach mobile users and keep them satisfied. Mobile users have high expectations in terms of usability and convenience. Continuing to deliver new and innovating mobile banking services such as mobile photo bill pay can keep this critical and growing customer base satisfied and loyal.
Credit union can also have a first-mover advantage. First movers for mobile RDC experienced some of the biggest benefits in terms of new customer acquisition and retention. With mobile photo bill pay poised to be even larger than mobile RDC, the time is right for credit unions to add the service to it pay capabilities.
James DeBello is president/CEO of Mitek. Contact 858-309-1700 or Pr@miteksystems.com