Online Resources, a US online payments
specialist, is banking on a fresh new revenue source from the
national launch of its integrated expedited payments service.
specialist, is banking on a fresh new revenue source from the
national launch of its integrated expedited payments service.
The service, first piloted in 2007, is now
fully available through more than 500 bank and credit union
clients. The service enables consumer and small business end-users
to make guaranteed same-day payments in return for a service fee
paid to their bank or credit union.
fully available through more than 500 bank and credit union
clients. The service enables consumer and small business end-users
to make guaranteed same-day payments in return for a service fee
paid to their bank or credit union.
Now that consumers have grown quite comfortable
with free regular electronic bill presentment and payment,
expedited payments are the only fee-based payment service on the
horizon, and Online Resources foresees a robust market for
last-minute payments now that its service is national in scope. The
slumping US economy has many consumers struggling to pay their
bills on time so, sad as it is to say, the launch was timed
perfectly. The company cites a Crone Consulting research study that
found that 65 percent of US consumers made five or more expedited
payments a year.
with free regular electronic bill presentment and payment,
expedited payments are the only fee-based payment service on the
horizon, and Online Resources foresees a robust market for
last-minute payments now that its service is national in scope. The
slumping US economy has many consumers struggling to pay their
bills on time so, sad as it is to say, the launch was timed
perfectly. The company cites a Crone Consulting research study that
found that 65 percent of US consumers made five or more expedited
payments a year.
Expedited payments are processed through Online
Resource’s end-to-end payments network, which links its proprietary
financial institution gateway with its extensive biller network.
The service is integrated into the financial institution’s banking
and bill pay application, providing ease of use and greater
consumer adoption.
Resource’s end-to-end payments network, which links its proprietary
financial institution gateway with its extensive biller network.
The service is integrated into the financial institution’s banking
and bill pay application, providing ease of use and greater
consumer adoption.
“Online Resources continues to be a key
strategic partner, offering a new value-added service that provides
customers the flexibility to manage their last minute payments with
total peace of mind,” said Paula Lechlitner, vice-president for
Internet Banking Services at AmTrust Bank, a $16 billion asset bank
with branches throughout Florida, Ohio and Arizona, in a release.
“We believe adding this feature to our online banking and bill pay
suite will make paying bills online even more attractive to our
retail and small business customers.”
strategic partner, offering a new value-added service that provides
customers the flexibility to manage their last minute payments with
total peace of mind,” said Paula Lechlitner, vice-president for
Internet Banking Services at AmTrust Bank, a $16 billion asset bank
with branches throughout Florida, Ohio and Arizona, in a release.
“We believe adding this feature to our online banking and bill pay
suite will make paying bills online even more attractive to our
retail and small business customers.”
To make expedited payments, consumers simply
log on to their financial institution’s web site to make a payment
in the same manner as usual. Within the bill payment application
however, consumers will see speed of delivery options for payments
to eligible payees.
log on to their financial institution’s web site to make a payment
in the same manner as usual. Within the bill payment application
however, consumers will see speed of delivery options for payments
to eligible payees.
“This service enables our financial institution
clients to generate fee income from the growing market for last
minute payments, as more consumers rely on expedited payment
services,” Sheila Narayan, executive vice-president and general
manager of Banking Payments Services for Online Resources told EPI.
“It also benefits our biller clients with faster, guaranteed
funding of payments debited from consumers’ checking accounts using
Online Resources’ patented debit technology.”
clients to generate fee income from the growing market for last
minute payments, as more consumers rely on expedited payment
services,” Sheila Narayan, executive vice-president and general
manager of Banking Payments Services for Online Resources told EPI.
“It also benefits our biller clients with faster, guaranteed
funding of payments debited from consumers’ checking accounts using
Online Resources’ patented debit technology.”
Narayan said that Online Resources was able to
build a robust expedited payments service because of its extensive
biller network as well as its platform for bill payment.
build a robust expedited payments service because of its extensive
biller network as well as its platform for bill payment.
“It was offered as a product enhancement to our
financial institutions, so for them it was literally no effort at
all,” she said. “Our banks are looking hard for fees, and this is
that rare fee that saves the consumer from a much higher
fee.”
financial institutions, so for them it was literally no effort at
all,” she said. “Our banks are looking hard for fees, and this is
that rare fee that saves the consumer from a much higher
fee.”
Online Resources also offers a same-day and
next-day payment service available through thousands of walk-in
bill payment providers, as well as an expedited payment real-time
application programming interface that ties to financial
institutions’ existing banking and payments platforms.
next-day payment service available through thousands of walk-in
bill payment providers, as well as an expedited payment real-time
application programming interface that ties to financial
institutions’ existing banking and payments platforms.
The company serves more than 10 million
end-users and processes over $100 billion in bill payments
annually, Narayan said.
end-users and processes over $100 billion in bill payments
annually, Narayan said.
While a number of vendors have long discussed
expedited payments, only a few have rolled out services and just a
handful of banks were offering them to customers until the broader
launch of the Online Resources product. The belief is that
consumers are more than willing to pay for same-day payment if it
will help them avoid a far larger late fee.
expedited payments, only a few have rolled out services and just a
handful of banks were offering them to customers until the broader
launch of the Online Resources product. The belief is that
consumers are more than willing to pay for same-day payment if it
will help them avoid a far larger late fee.
Online Resource’s in-house research has shown
that 72 percent of consumers seek expedited payments to avoid late
fees, while 48 percent sought to avoid damage to their credit
rating and another 25 percent said they wanted to avoid disruption
of service to their account.
that 72 percent of consumers seek expedited payments to avoid late
fees, while 48 percent sought to avoid damage to their credit
rating and another 25 percent said they wanted to avoid disruption
of service to their account.
“This is a great new product opportunity,”
Narayan said. “The consumer response is very positive – it’s viewed
as very useful tool, and it really eases the minds of the consumers
when they know they have this option.”
Narayan said. “The consumer response is very positive – it’s viewed
as very useful tool, and it really eases the minds of the consumers
when they know they have this option.”
Online Resources’ completely electronic
expedited payments service will compete with several other
offerings, including Metavante and JPMorgan Chase, which offer
expedited payments but use an overnight courier service to deliver
paper cheques to billers.
expedited payments service will compete with several other
offerings, including Metavante and JPMorgan Chase, which offer
expedited payments but use an overnight courier service to deliver
paper cheques to billers.
Yodlee has added expedited payments to its bill
payment service through a deal with Western Union, in a model
similar in practice.
payment service through a deal with Western Union, in a model
similar in practice.
The differentiator, from Narayan’s perspective,
is the network of financial institutions and walk-up locations
offering Online Resources’ solution.
is the network of financial institutions and walk-up locations
offering Online Resources’ solution.
“Everything we can measure tells us that this
is an application that bill payers really want, and that people are
really feeling the heat,” she said.
is an application that bill payers really want, and that people are
really feeling the heat,” she said.
Online Resources’ latest survey of US
households and how their bill payment patterns are being affected
by the economy showed that Americans’ personal financial stability
continues to decrease as the mortgage crunch, rising energy costs
and a decreasing savings rate hit more households.
households and how their bill payment patterns are being affected
by the economy showed that Americans’ personal financial stability
continues to decrease as the mortgage crunch, rising energy costs
and a decreasing savings rate hit more households.
The mortgage still ranks first as the bill that
households are most likely to pay, although the percentage of
households who reported being delinquent with their mortgage
payments has increased sharply, rising by 8 percent year-on-year in
May 2008 alone.
households are most likely to pay, although the percentage of
households who reported being delinquent with their mortgage
payments has increased sharply, rising by 8 percent year-on-year in
May 2008 alone.
Some 52 percent of households report that it is
harder to meet their financial obligations, an increase from 43
percent six months ago, and more than half of households reported
taking money out of savings, including retirement accounts, to pay
for necessary living expenses or their household bills.
harder to meet their financial obligations, an increase from 43
percent six months ago, and more than half of households reported
taking money out of savings, including retirement accounts, to pay
for necessary living expenses or their household bills.
More ominously, the survey showed that no
demographic is immune from delinquency: 14 percent of households
with an income greater than $100,000 reported being delinquent and
13 percent of households whose mortgage is paid off also have at
least one bill 30 or more days overdue.
demographic is immune from delinquency: 14 percent of households
with an income greater than $100,000 reported being delinquent and
13 percent of households whose mortgage is paid off also have at
least one bill 30 or more days overdue.
“The message is that you can avoid being hit
with the fees, and that we’ve all been there – we’ve all had that
bill that needs paying right now,” Narayan said. “It’s something
we’d all like to avoid, but it happens.”
with the fees, and that we’ve all been there – we’ve all had that
bill that needs paying right now,” Narayan said. “It’s something
we’d all like to avoid, but it happens.”
Charles Davis
