The under-served biller market: Identifying and serving the hidden market in consumer-to-business bill payments

Billions of regularly occurring bill payments take place on the edges of consumers’ lives, including personal and household service, dependent care and tithing. While most banking bill pay services will allow a consumer to make many of these payments, they are almost always done by the bank cutting and mailing a paper cheque, which does little more than shift an inefficient method of payment from the consumer to the bank. At the same time, an opportunity market for migrating service-related consumer-to-business (C-to-B) payments from cheques and cash to electronic, card-based payment forms is quickly emerging in the US, spurred on by smart-phone adoption and app-based technology. For financial institutions, the under-served C-to-B bill payment segment represents one of the final hurdles in removing cash and cheque payments from the market. In an increasingly competitive electronic payment market, filling this need has not gone unnoticed and, as a result, these payments may find a home in the person-to-person market, thereby cutting one more line to financial services delivered through traditional financial institutions. This paper, which is an expansion of a brief entitled ‘The Under-Billed Market: It’s the Little Payments that Mean A Lot’, will examine the dynamics taking place in the payments market around this segment, estimate the addressable opportunity, and discuss ways in which financial institutions can build share in the under-served biller market.