Consumers who caught on fast to the convenience of using their smartphone cameras to deposit checks remotely likely will be among the first to try a similar technology for paying monthly household bills.
Mitek Systems Inc.’s early market research suggests its new mobile-imaging bill-pay technology will cause the number of consumers paying bills by mail or in person to shrink dramatically within two years as more consumers simply capture images of bills they want to pay using their phones’ cameras.
A proprietary study AlixPartners LLC conducted for Mitek suggests that 33% of U.S. consumers will be using mobile-imaging bill-payment services by 2013.
And though banks will provide the vast majority of such services via their mobile-banking apps, unbanked consumers are also ripe for using the technology through alternative and prepaid channels, Mitek executives predict, making it a hot commodity to retain tech-savvy customers.
Mitek’s mobile bill-payment technology automatically captures the relevant details from paper-based bill coupons. The technology automatically extracts relevant data, such as the customer’s account number and payment amount. The customer then schedules the payment and clicks to pay it using his mobile banking app.
Consumers testing San Diego-based Mitek’s mobile-imaging bill-payment technology “instantly get the concept” of an app capturing an image of the remittance portion of a bill and retrieving the relevant data, including the amount due and the payee details, Diane Morgan, a Mitek product marketing manager, tells PaymentsSource.
Banks offering the service will enable customers’ bill payments through online-banking channels, typically debiting consumer accounts as automated clearinghouse transactions, she says.
But doing it via mobile-imaging channels saves steps, which has a powerful appeal to consumers.
“Mobile photo bill-pay is much faster than manually filling in the fields through online-banking platforms or ordinary mobile-banking apps,” Morgan says.
Consumers may designate when they want to pay bills using Mitek’s mobile imaging bill-pay technology, and they may opt to designate bill images they capture as recurring or one-time payments, based on their banks’ offerings, Morgan says.
Six large U.S. banks are piloting Mitek’s mobile imaging bill-pay service, and the firm expects to roll out commercially during the second quarter of this year.
Available for Apple Inc. iPhones, handsets that use Google Inc.’s Android operating system or Research in Motion Ltd. BlackBerry smartphones, Mitek’s mobile imaging bill-payment technology quickly could outpace mobile remote check deposit because consumers typically pay about a dozen household bills each month, Morgan suggests.
And that will be a plus for banks looking to find more ways to get consumers to stick around, Morgan says.
“One of the things that deters consumers now from adding more payees to their online banking setup is the manual effort required, but the mobile-photo element makes it much easier,” she says.
U.S. consumers pay about 20 billion household bills annually, or about 12 to 14 per household monthly, according to research AlixPartners LLC conducted on Mitek’s behalf.
Consumers will continue to use a mix of payment channels for household bills, but 1.4 billion, or 12%, of all household bills consumers send by mail today will migrate to mobile-imaging bill-pay technology by 2018, AlixPartners predicts, citing forecasts of smartphone penetration increasing from 22% of all U.S. mobiles phones in use in 2010 to 73% within six years.
“Over the next few years, we expect mobile photo bill-pay will become the dominant approach consumers will use, especially when adding a new payee,” Morgan said, noting bills already paid automatically by credit or debit card may not migrate to mobile-imaging bill-payment channels.
The biggest displacement will come from bills consumers are mailing or walking in to pay, Morgan says.
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