Newcomers in the bill-payment industry have strengthened their position against traditional banks in recent years, a new report suggests.
The report from Javelin Strategy & Research shows that while banks have benefited from their bill-pay services, others who offer such services are doing well in providing more flexibility to consumers.
Javelin's research may be onto something with these new startups that know what the Millennial generation is looking for, said a payments processing expert at US Dataworks.
That means more flexibility, because where a banking institution only offers bill payment from checking accounts, the newer models allow for payment from other sources, including credit cards.
The trend is important to banks, because the Javelin study showed that when customers use traditional banks for online bill payment, retention is high. And banks are in a good position for bill payment, offering security, convenience and control. They also offer mobile solutions at a time when many of the newcomers do not.
Source: American Banker, April 2012