New Javelin Study - 2008 Expedited Payments Forecast

“Most consumers currently initiate expedited bill payments directly with the biller versus their financial institution,” said James Van Dyke, president of Javelin Strategy & Research. “However, financial institutions have the opportunity to directly offer expedited payment services, reaping fees and strengthening their payments franchise.”

Javelin research reveals how consumer usage of online bill payment services can include expedited payments fees as a revenue source for financial institutions. Nearly 32 million consumers are active users of online banking bill payment in the U.S., and the volume of expedited bill payments will reach as high as 400 million transactions by 2013.

The report also highlights the implications for mobile expedited payments, citing that currently 45% of existing mobile bankers use expedited payments at least once a month and certain age groups are poised to drive mobile channel growth.

Report author Bruce Cundiff, director of payments research and consulting at Javelin comments, “While the online channel is primarily used for expedited payments, mobile could represent incremental value to banking and bill pay customers. Using mobile alerts to advise customers of upcoming payments would raise awareness of the bank’s ability to offer same day payments—building greater customer loyalty—while increasing bank revenues.”

As expected, the current economy motivates consumers to accept higher fees associated with expediting bill payments in lieu of facing costly late payment charges. Javelin forecasts that cash-strapped consumers using expedited payments as a way to hold onto bill payments longer could face a doubling in the price of expedited payments over the next five years, from $8 on average to $16 in 2013.