The transaction mail market is currently undergoing significant changes. Within the USPS, transaction mail volume experienced a 3.7% decline between 2007 and 2008, then declined further during 2009. USPS mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020, and First-Class Mail alone is expected to decline by 37%. Bill and statement providers are exploring ways to simply “turn print off” by using either positive incentives (e.g., “go green” contests) or negative incentives (e.g., pay-for-print fees). InfoTrends is launching a study to explore the future of transaction print and electronic bill presentment and payment (EBPP) this year, but in the meantime, let’s consider both sides of the print versus electronic discussion.
The Electronic Push
PayItGreen.org, a coalition led by the Electronic Payments Association (NACHA), is a Web site for businesses and consumers that promotes electronic billing, paperless statements, and direct deposit to eliminate paper checks. Its mission is to reduce paper's impact on the environment. The Web site also offers resources to help businesses and customers make the electronic switch and eliminate paper bills, payments, and statements. A listing of some NACHA “Green Facts” is provided below.
In a typical year, switching from paper to electronic billing, statements, and payments would enable the average American household to:
· Save 6.6 pounds of paper
· Eliminate the production of 171 pounds of greenhouse gas emissions—the equivalent of:
o The emissions eliminated by not driving 169 miles
o Not consuming 8.8 gallons of gasoline
o Planting 2 tree seedlings and allowing them to grow for 10 years
o Preserving 24 square feet of forestland
· Prevent releasing 63 gallons of wastewater into the environment
· Prevent the use of 4.5 gallons of gasoline to mail paper items
If only 20% of American households switched from paper to electronic bills, statements, and payments each year, the collective impact would:
· Save 150,939, 615 pounds of paper
· Save 1,811,275 trees
· Prevent the production of almost 2 million tons of greenhouse gases
· Eliminate creating over a billion gallons of wastewater during paper production
· Save over 100 million gallons of gas used to mail payments
Beyond the environmental benefits that are published on the NACHA Web site, the Figure below shows a company graphic that states “by turning off the paper, we also clear the clutter, improve account security, and save time and money.”
Figure 1: What is PayItGreen?
Ironically, mailed bills and statements are the one type of mail that actually cuts through the clutter. InfoTrends’ recent research in North America showed that over 95% of bills and statements are opened and read. A similar study that InfoTrends conducted in Western Europe showed that over 98% of bills and statements received via mail were opened and read. The clutter of the mail stream is not created by these transaction documents—instead, it is due to direct mail that some of these same companies are sending as separate initiatives. Think about the credit card offers that consumers receive daily—InfoTrends’ research shows that over 70% of those mailings are discarded without being opened or read.
The Need for Co-Existence
While there is certainly a growing interest in electronic bill presentment and payment, this is not a move that should be taken lightly. Not all consumers are ready to give up printed transactions. When it comes down to it, the best procedure is not an “either/or” approach, but a combined method. InfoTrends’ research has shown that consumers prefer multiple delivery methods—print, electronic, and a combination of the two.
As outlined in the Figure below, respondents to a Web-deployed survey in North America preferred print, whereas the respondents in six economies in Western Europe (i.e., Belgium, France, Germany, Italy, Sweden, and the U.K.) skewed slightly toward electronic delivery. Overall, 22% of North American respondents and 18% of Western European respondents preferred to receive printed and electronic communications. Ultimately, the research reinforced the need for bill and statement providers to consider the consumer’s perspective before deciding which delivery channels to support. This view is supported by both sides of the delivery discussion.
Figure 2: Preferred Delivery Method
Source: Trans Meets Promo…Is It More Than Market Hype?, InfoTrends, 2008
Source: Trans Meets Promo: A European Perspective, InfoTrends, 2009
The Bottom Line
The message is clear—today’s consumers expect to have a choice between printed and electronic transactional communications. In some cases, they expect to be able to receive both. Before moving to a fully paperless approach to transactional communications, bill and statement providers must consider the repercussions of their actions. Otherwise, they run the risk of upsetting and losing customers, while also removing a highly-valued opportunity to interact with them. Remember, over 95% of bills and statements received in the mail in North America and across Western Europe are opened and read. There is a place for electronic presentment and payment, but this is not the time to completely turn off print.
InfoTrends plans to further explore the future of electronic bill presentment and payment in a Multi-Client study to be launched later this year. Contact the study’s project manager directly at matt_swain@infotrends.com for information about how you can be a part of this research!