Bill Payment Trends Highlight Opportunity for Credit Unions

Member payment practices provide insight into important capabilities and better ways to market online bill pay service to non-users.


A survey of 14,687 online credit union members across the U.S. conducted by Callahan’s Internet Strategy Consortium shows a significant opportunity for credit unions to leverage member’s increasing familiarity with electronic payment methods to convince more members to adopt bill pay. Compared to a 2003 study, members are using more automated methods today.  Usage of the biller’s website and automated checking account payments has increased significantly among both bill payers and non-user segments.

The data shows that the experience gap between bill pay users and non-users is decreasing as members use a wider range of electronic payment options for bills and purchases.  Marketing messages for credit union bill pay will need to shift from explaining online payments and fee-free service to expressing the benefits of a consolidated service compared to other options. 

  • Online bill presentment is clearly becoming more common, as 55% of online members report receiving at least some of their bills online.  More bill pay users (66%) receive ebills but half of the non-users (50%) receive at least some ebills, indicating that overall usage of bills online is increasing.  However, few members are receiving all of their bills online, showing that there are still gains to be made for integrated bill presentment and payment. 
  • Growing user of biller-direct websites. Surprisingly, non-users (47%) and Bill Pay Users (44%) had similar usage of a biller’s website.  Biller-direct websites are a strong threat to usage of credit union bill pay services, as some provide same day or next day posting of transactions.

How can credit unions leverage these trends to encourage more members to use credit union bill pay services?

While trends are favorable, many banks and credit unions are struggling to increase member adoption.  Sometimes slow transaction posting and long payment lead times are an issue when trying to lure members from other payment methods.  Further enabling faster payments will help credit unions stay competitive with other electronic options.  

Member feedback reveals that another significant barrier is a lack of awareness and understanding of the basic features of bill pay programs. Within the Consortium, awareness responses ranged from 21% to 49%.  Members also indicated that they don’t understand the features (24%), have security concerns (24%), or don’t have enough bills to pay (12%). 

Security Concerns
While security concerns may be hardest to counteract, more detailed information about security, liability limits, and payment guarantees may help. Ironically, the rise of biller direct websites and use of online statements may push more consumers towards using a consolidated program for managing their payments.  Coping with a multitude of usernames and passwords and putting personal information online at different sites may heighten concerns about identity theft.  As credit unions put more stringent security measures such as multi-factor authentication in place, they should market this feature along with added convenience as a benefit of using their service. 

Another barrier is member concerns about bill pay fees.  Even for credit unions that no longer charge fees, members were unsure if there was a cost or not.  A recent CUNA Fees Survey reported that 33% of credit unions are still charging for bill pay.  This number is down dramatically from 62% in 2004, demonstrating that many credit unions see free bill pay as an important relationship product.

Members with Fewer Bills
Members with few bills may also be difficult to convert, but there are still benefits that may appeal to them.  Informing them about alert features may help, as 40% of members who have only 1 or 2 bills reported using at least one method to avoid a late payment. 

As financial institutions add more features such as customizable alerts and bill presentment, the barriers to switching for members increase even more.  Although bill pay vendors such as Yodlee are introducing a tool to automate the bill pay switching process, its impact is uncertain as consumer perceptual barriers will remain. Given that bill pay users tend to have greater satisfaction and service usage, there will always need to be a compelling reason to switch to another provider.

To gain more insight into credit union bill pay service, including member data, credit union success stories and marketing ideas join our webinar, “Just Press Pay: Attracting Members to Online Bill Payment, “ brought to you by Callahan & Associates and sponsored by Digital Insight.  For more information about the webinar or the Internet Strategy Consortium study, please contact Denise Senecal at 800-446-7453 or by email at




Jan. 8, 2007


  • One comment that I hear a lot is about the inconsistency of timing of bill pay. Members are getting frustrated that their bills are not being paid at the same time each month or that the transactions are not completed by the bill's due date -- depsite the fact that they authorized the payment well in advance. While the technology has come a long way, we still need to overcome any delays. The "same day or next day posting of transactions" offered by many biller websites is attractive, convenient, and offers a consitency that some bill pay programs do not have. THIS IS WHAT WE HAVE TO CORRECT in order to stay competitive.