Expedited bill payments offered to increase revenue

A research conducted by TowerGroup shows that if financial institutions implement expedite payments at the expense of speeding the posting time of bill payment transactions it will create a new revenue stream for them.

According to TowerGroup there are about 24 million consumers in the US who are using online banking bill payment at the moment and the volume of online bill payments is forecasted to reach 3.87 billion transactions by 2012. Still the convenience featuring online bill pay results in increased delivery and support costs for financial services institutions.

TowerGroup estimates that offering free online bill payment solutions to retail banking customers will cost the financial services industry $1 billion (USD) by 2010. Previously financial institutions traditionally accepted this expense as a cost of doing business but now the poor revenue associated with online bill pay no longer compensates for the "hard" dollars institutions must spend to facilitate it.

Yet TowerGroup believes that today's economic climate and credit-score focused consumers will welcome expediting payments. In TowerGroup’s view cooperation of online bill payment processors and online bill payment solution providers may make expedited payments to become a source of sustainable recurring revenue.