Using The Web For Online Credit Card Collections

The study shows an upward trend in usage of web-based collections by delinquent account holders, as well as higher payment rates by account holders who hold higher balances than others at the creditor, highlighting the effectiveness of online collections in preserving valuable account relationships.

This benchmark study was conducted over a six month period, and affirms the results of the 2005 Online Resources study which showed the loss reduction benefits of utilizing the Internet channel for online collections. Some key results of the six month benchmark study:

• Adoption of web-based collections by delinquent account holders is increasing as users become more comfortable remitting payments online. The overall payment rate as a percentage of logins (which tracks how many site visitors make a payment during an individual web session) increased by 426 basis points on average since the 2005 study. This is consistent with the trends in online banking and bill payment.
• More than 80% of accounts that self-cured on the collections sites during the six month period studied paid the minimum amount due or greater, and nearly 60% paid the total due or greater.
• The collections sites are attracting higher than average balance accounts. Site visitors' balances were 20% greater than that portfolio's average delinquent and those with over-the-limit accounts had balances nearly 33% greater than the creditor's portfolio average.
• Account holders who make a promise-to-pay during a web session keep the promises-the average payment commitment experienced a 94% keep rate.
• A key benefit to web-based collections is convenience - 22% of logins occurred on Saturday or Sunday, or during off-hours when regulations or hours of operation prevent contact by creditors or traditional collection agencies.