Ask anyone on the street, and they’ll probably tell you that using electronic, or paperless, billing and statements is a good thing. When introduced more than a decade ago, paperless billing was touted as an environmental savior; by driving more customers online to receive and pay their bills, fewer natural resources are used and less waste is introduced into the environment. However, beyond this initial adoption from customers who want to “go green,” e-billing as the singular way of receiving a bill or statement from financial institutions, healthcare organizations, telecom providers and other billers has remained stagnant, with growth virtually unchanged over the last few years, according to recent research from InfoTrends.
In a separate report, research firm Javelin says the number of consumers who receive both a paper and a digital statement also remained steady from 2010 to 2015; nearly 1 in 4 financial institution customers and bill payers still receive both online and paper statements each month. These “double dippers” want the convenience and reminder of a paper bill, but oftentimes choose to pay their bills online rather than respond in kind with a mailed payment. Javelin calls this disparity—the gap between customers who received paper bills and subsequently pay them online—the “Digital Communications Gap.” And that percentage of users—34 percent in 2014 and 2015—actually shows a slight increase over the previous three years. Closing that gap could mean a savings of $2.2 billion over the next five years, Javelin reports.
So why are customers increasingly paying their bills online (an 18 percent increase in online bill paying from 2010 to 2015), but not choosing to receive their bills only by electronic means as well? According to InfoTrends, the reasons is two-fold:
1) Consumers want the hard copy of bills and statements for their records (53 percent of respondents)—and as a reminder that their bills are due (45 percent).
2) Today’s digital experience is not consumer-friendly—Customers need to remember multiple user IDs and passwords, and use websites with different navigations and document retention timelines.
At the same time, the marketing strategy to drive further adoption of paperless transactions remains largely unchanged, as companies continue to push the environmental benefits and “clutter reduction” of online bill payments instead of attempting a transformational strategy to encourage adoption. Ironically, companies are continually optimistic about growth in e-billing—year after year predicting increases in adoption—without making any changes to their processes.
More than an estimated 500 billion bills are sent annually and the rate is increasing by 2-3 percent a year, according to research group Billentis, so the problem is only going to get worse. When asked by InfoTrends about the various reasons why they have not adopted paperless billing and statements, 21 percent of customers surveyed said their provider did not offer the option, 11 percent cited that their providers did not incent them enough to stop receiving paper bills, and 10 percent said their providers make it too difficult to switch. These are relatively low percentages, compared to some of the top answers cited above, which in addition to wanting hard copies and a reminder to pay, also prefer hard copies as a security precaution (24 percent).
Clearly, there’s a disconnect between senders and recipients. If the solution is not to make it easier for customers to sign up to go paperless (as only 10 percent cited this as a reason), what will cause significant uptake in paperless billing that puts companies on the same page with their customers?
It’s a business problem and requires a business solution—one that takes a much firmer stand on the benefits for both sides in going paperless. According to InfoTrends, a transformative approach is needed to see real results—one that goes beyond the “green” aspect of paperless billing.
This may include:
- Making paperless the default for new or double dipping customers, and requiring them to opt back in to receive paper bills.
- Updating policies to include charging a service fee for paper-based bills
- Providing the option to consolidate their paper (or paperless) bills under a single provider, such as a bank or other source
- Offering loyalty points or other incentives for paperless customers
Overall, companies need to provide more options across the company to deliver a better digital experience across all the communications they send to customers—not just bills or statements, as according to the Billentis report, companies send more than five to 15 times the volume of “invoice-like documents and messages” than they do actual bills. These options also need to include the expansion of secure electronic document delivery so that customers can easily receive their sensitive documents encrypted from the company directly from their inbox.
Will the industry ever go completely paperless? Probably not, unless these transformative changes are implemented quickly. But the rewards are there for companies that do take the transformation process seriously: closing the Digital Commitment Gap could mean an industry-wide savings of $2.2 billion over the next five years.
Billentis: E-Invoicing /E-Billing: Entering a new era
Infotrends: Transactional Communications Market Survey
Javelin: Paperless Banking and Billing 2015: Closing the Digital Commitment Gap