MUMBAI: Though online bill payment is in its infancy in India, the potential is staggering. The average Indian household in the top 10 Indian cities pays up to 42 bills annually for a variety of services. As per a research done by IAMAI (Internet and Mobile Association of India), the number of Indians paying bills online is expected to increase from the current 0.3 million in 2005-06 to 1.8 million by 2007-2008.
To facilitate and get a better understanding of the current online bill payment scenario in India, IAMAI mandated a study that was conducted online in December 2005. The target audience comprised internet users with a sample size of 6,365 respondents. The report on Online Bill Payment highlights the level of awareness of online bill payment services, the user’s aversion and preferences with regard to online bill payment, their propensity to start paying bills online and factors that would increase the usage of the service. The coverage cut across age, gender, educational and occupational biases.
IAMAI president Subho Ray said, “Offline bill payment is a time-consuming process, and doing it online not only benefits billers but consumers as well. It offers convenience, control, trust, privacy, and improved record-keeping; another plus factor is that they can depend on customer service for recourse.”
Facts of the online bill payment survey
46 per cent were in the 26-35 age group
83 per cent bill payers were male and 17 per cent female
Payment preferences:
73 per cent regularly paid cellular phone bills
72 per cent paid telephone bills
69 per cent paid credit card bills
58 per cent paid electricity bills
42 per cent paid insurance premiums
36 per cent paid Internet access bills
27 per cent paid for their magazine subscriptions online
Top 5 states:
33.4 per cent from Maharashtra
20.1 per cent from New Delhi
9.9 per cent from from Tamil Nadu
7.5 per cent from Karnataka
5.4 per cent from Andhra Pradesh
“Online Bill Payment is a cost saver for billers and a great revenue opportunity for banks and third-party service providers. Banks are in a particularly good position to cash in because of their reputation as trusted companies and with an estimated 16+ million Indians using their Online Banking Services by 2007-08, they can further maximize their revenues on their e-infrastructure by promoting these services,” he added.
The survey was mandated by the IAMAI to Cross Tab Marketing Services with the overall objective of obtaining data to understand and anticipate online bill payment trends. The report provides granular information to financial institutions so that they can cater to the unique characteristics of India’s online customers.
Some details of the research:
Important factors influencing online bill payments
Fifty four per cent cited convenience as the most important that induced them into paying bills online. Thirty five per cent cited time saving as they could pay bills without having to stand in line at a counter or even go a bill payment centre. On average, customers saved 24 hours a year; paying bills online also reduced paperwork and was an easier way to manage bills. Only five per cent were attracted to online bill payment because they could pay multiple bills at the same time on the same site or on different sites.
Types of bills paid by online bill payers
Seventy three per cent regularly paid cellular phone bills online, 72 per cent paid telephone bills, 69 per cent paid credit card bills, 58 per cent paid electricity bills, 42 per cent paid insurance premiums, 36 per cent paid Internet access bills, while 27 per cent paid for their magazine subscriptions online.
Site options for online bill payments
Consumers can use sites of utility companies, banks or third-party aggregators to pay bills online. Eighty three per cent used their bank’s bill payment services, 43 per cent paid on the site of the biller/ service provider and 21 per cent relied on a third-party site.
Awareness & communication about online bill payments
Fifty two per cent learned of online bill payment services on their own, whereas 41 per cent came to know about online bill payment through advertisements. Six per cent heard of it through internet ads. Thirty nine per cent came to know about online bill payment through a bank representative, 24 per cent heard of it through a biller email / advertisement, 20 per cent through friends/ peers, and 10 per cent through mobile and SMS alerts.
Online bill payments by number of months/years
Sixty four per cent had been paying bills online for more than a year, of which 35 per cent had done it for more than two years, which indicates a growing comfort with the internet. While 29 per cent had been using it for 13–24 months, 21 per cent used it for 7-12 months, 14 per cent for 2-6 months and two per cent for less than one month.
Internet access
While 71 per cent of online bill payers accessed the internet from home, 77 per cent did so from office and 32 per cent accessed the internet from cyber cafes. On the other hand, six per cent accessed it from a friend’s place and 16 per cent from the mobile.
Internet usage by years
Close to 99 per cent of online bill payers had used the internet for more than one, which means it’s a pedigreed audience that is well-versed in the nuances of the internet. On the other hand, 58 per cent had been using it for more than six years, 36 per cent for three – five years, four per cent for one – two years and one per cent for six – 11 months.
When asked whether they would recommend online bill payment services to their family and friends, 98 per cent said yes.
Deterrents to online payments
The biggest reason for not paying online is concerns about security, with 41 per cent of respondents indicating that they did not use the services because of them. Also, 35 per cent of respondents preferred to pay bills at payment counters or drop cheques in drop boxes, while 27 per cent of Netizens did not use online bill payment services as they ‘didn’t know how to pay bills online’ or due to fear of ‘technological failure’ during transactions.
Fourteen per cent didn’t know whether their banks provided online bill payment services, so there’s a case for better communications and marketing, while 12 per cent of respondents didn’t know whether their service providers offered online bill payment services.
When asked what would induce them to pay bills online, 58 per cent of respondents felt that a guarantee that online bill payment services were safe and secure would encourage them to use them. While 45 per cent said they would pay their bills online if they got receipts of payments made online; another 45 per cent said they would pay bills online if it was free or if the charges were reduced.
On the other hand, 34 per cent felt they might use the service if a clear demo of how to use it was provided and 30 per cent wanted an online customer support service, while 17 per cent said they would pay bills online if they could access the internet more frequently and freely.
