Although a large percentage of Americans still favor paper statements and prefer to pay their bills via traditional mail, the adoption of e-billing solutions is on the rise. According to the NACHA-The Electronic Payments Association, the number of direct payments increased to 2.75 billion in 2008, an increase of almost 5%. Additionally, more than half of all U.S. households use direct payment for at least one recurring payment.

One reason consumers are turning to online payment methods is to protect them from fraud, misuse of personal information, and identify theft. Many of today's electronic billing solution providers offer a number of security features including data confidentiality, biller authentication, and non-repudiation of bills. Another motivation is that receiving e-statements and other electronic communication provides customers the convenience of accessing their accounts 24/7. Having the ability to monitor their transaction activity, and set up automatic transfers or transfer funds between accounts any time of day plays a large role in the growing popularity of e-billing options.

Businesses also reap rewards from implementing electronic billing solutions or choosing a third-party service provider to offer this service. More credit unions are offering incentives to their members to encourage the adoption of electronic solutions because of the many benefits it provides, including:

• Improved cash flow. Electronic billing eliminates the need for human processors to process payments. It also helps reduce costs of material such as paper and service costs, postage, and printing.

• An increase in profitability. Small to mid-sized billers may currently spend hundreds of thousands of dollars per month on bill generation, paper, postage, processing, and billing customer service. These organizations would see a significant cost savings if even only a small segment of their customers were to convert to electronic billing.

• Enhanced customer relations. Credit unions are able to regularly communicate with members without being intrusive and use these communications to build loyalty and encourage member feedback. In some instances, it possible to utilize customized one-to-one marketing promotions based on known member data.

• Promotion of Environmental Awareness. By encouraging green business practices, you reduce paper waste, printing costs, and greenhouse gas emissions from mail delivery trucks. Implementing green initiatives also promotes corporate social responsibility and concern for the environment.

CUs Still Must Be Ready To Deal With Paper

While implementing electronic billing is favorable for numerous reasons and will meet the demands of many, it is also important to continue meeting the preferences of those who favor paper statements. To satisfy all members, businesses are offering online payment options while sending paper bills to members who indicate conventional mail as their preferred method.

As the online channel continues to grow in importance and popularity to consumers, CUs should not overlook the importance of this trend. Having the ability to handle and deliver customer data, loan payments, or share certificate renewals through multiple delivery channels ensures you are meeting the needs of each individual customer.

The demand for e-statements will only grow, and offering options to help simplify your members' lifestyles will play a vital role in their decision to stay with or join your credit union. Living in an age of speed and technology, it is important we stay on top of consumer trends and behaviors. Continually educating customers on the benefits of electronic billing solutions and increasing the adoption of online payment plays a large role in improving cash flow, ROI, and is a source for adding value.

Harry Stephens is President/CEO, and founder of DATAMATX, a provider of printed and electronic billing solutions. Mr. Stephens can be reached at