The Ever Changing Landscape of Electronic Bill Payment. WPTA Annual Conference April 12 14, 2017

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1 The Ever Changing Landscape f Electrnic Bill Payment WPTA Annual Cnference April 12 14, 2017

2 Disclaimer This dcument is designed t prvide general infrmatin nly and is nt cmprehensive nr is it legal advice. In prviding this infrmatin, neither KeyBank nr its affiliates are acting as yur agent, brker, advisr, r fiduciary, r is ffering any tax, accunting, r legal advice regarding these instruments r transactins. If legal advice r ther expert assistance is required, the services f a cmpetent prfessinal shuld be sught. KeyBank des nt make any warranties regarding the results btained frm the use f this infrmatin KeyCrp. KeyBank is Member FDIC

3 Presenter Infrmatin David Ptasznik Sr. Prduct Manager Enterprise Cmmercial Payments grup Based in Cleveland, Ohi. Over 20 years f payments experience with the past 14 years at KeyBank in varius rles. Certified Treasury Prfessinal (CTP) and was the past president f the Nrthern Ohi AFP chapter. Undergraduate degree frm Jhn Carrll University and MBA frm Baldwin Wallace University. 2 2

4 Agenda and Objectives Agenda Objectives Overview C2B Trends Industry Update Benefits t Payers and Billers Current and Future Trends Discussin Takeaways Discuss the trends, needs and challenges f billers and payers in the bill payment space, and current and future slutins in the future 3 3

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6 Overview Technlgical advances ver the past five t ten years have increased the number f electrnic bill payment ptins fr billers and cnsumer/business payers. We will examine the trends f the bill payment landscape, needs f billers and payers, ways t increase paper t electrnic adptin, current slutins available and emerging functinality/technlgies in 2017 and beynd. 5 5

7 U.S Cnsumer Bill Payment Trends In 2016, U.S cnsumers paid, 14.7 Billin bills, spending $3.9 Trillin 10 Billin are ne-time Payments 4.7 Billin are recurring Over 50% f thse bills were fr Credit Cards TV / Cable & Internet 6.8+ Billin made via ACH Surce: Q Aite Grup survey 2.5 Billin made via Check 2.2 Billin 2.2 Billin Debit Card Payments Credit Card Payments Generatin Trends 44% Cell Phnes f millennials use biller websites, cmpared t 19% f Senirs 6 6

8 Millennial Payers Millennials will becme the payers f tmrrw Birth years f millennial generatin 80 millin Ppulatin f U.S. millennials 34 Age f ldest millennial in

9 Millennial Payers Millennials heavy reliance n mbile devices 89% 55% f year lds check their mbile phnes within 15 minutes f waking f students reprted strng negative feelings when separated frm their mbile fr 24 hurs 8 8

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11 Mbile Payments Surce: Eighth Annual Billing Husehld Survey, Fiserv,

12 The Bill Payment Industry Surveys 2016 U.S. Bill Payment Vlume One-Time Payment Vlume by Channel Payment Vlume by Methd Biller's website 3,567.2 ACH 6,801.3 Mail 2,407.7 Check 2,538.7 In persn 1,417.5 Debit card 2,246.8 Bank's website 1,267.5 Credit card 2,223.1 Direct debit Cash Phne Mney rder Third-party website 39.1 Prepaid debit card Numbers f bills in millins; n=188,653 bills Numbers f bills in millins; n=285,382 bills Percentage f Online Bill Vlume by Type f Site 0% 2% 0.5% 38% 30% 27% Third-party website Bank website Biller website 62% 69% 73% 2010 (n=225,310 bills) 2013 (n=3,566 bill types) 2016 (n=162,265 bills) Surce: Aite Grup surveys f 2,429 U.S. cnsumers in Q3 2016, 1,107 cnsumers in Q2 2013, and 4,696 cnsumers in Q

13 Survey Results Prperty Tax Payments One-Time Payments 3% 16% 7% Payment Surce Breakdwn 6% Mail In Persn 43% Biller's website Bank's website Phne Other 25% Biller s Website Payment Methds 1% 26% ACH 47% Credit Card Debit Card Other 26% Surce: Aite Grup survey f 2,429 U.S. cnsumers, 1,885 ne-time bills fr prperty taxes, Q Recurring Payments Payment Surce Breakdwn Biller s Website Payment Methds 3% 24% 30% 43% Biller's website Bank's website Mail r Phne Other 16% 11% 4% ACH 69% Credit Card Debit Card Prepaid Debit Card Surce: Aite Grup survey f 2,429 U.S. cnsumers, 946 recurring bills fr prperty taxes, Q

14 Survey Results Water/Sewer Payments One-Time Payments Payment Surce Breakdwn Biller s Website Payment Methds 6% 5% 28% Biller's website 13% Mail In Persn Bank's website Direct Debit 20% Phne 28% 40% 1% 26% 33% ACH Credit Card Debit Card Other Surce: Aite Grup survey f 2,429 U.S. cnsumers, 11,749 ne-time bills fr water/sewer, Q Recurring Payments 2% Payment Surce Breakdwn Biller s Website Payment Methds 20% Biller's website 10% 1% ACH 30% 48% Mail r Phne Bank's website Other 19% 70% Credit Card Debit Card Prepaid Debit Card Surce: Aite Grup survey f 2,429 U.S. cnsumers, 4,178 recurring bills fr water/sewer, Q

15 Discussin Are the survey results cnsistent with yur receivables activity? If nt, what are sme factrs that may result in different numbers? Hw has the changing demgraphics f yur cnstituents changed the mix f payment types and methds? 14 14

16 Receivables Industry Landscape Paper t Electrnic Trend Shifting away frm paper invices, remittances r payments will cntain cst and prmte efficiency within the rder-t-cash cycle. Issues Barriers t entry int the electrnic payment space cntinue due t resurce cnstraints and electrnificatin f check payments

17 A Biller s Viewpint Agent Mbile Cnsumer Bill Payments A Biller s Perspective Web IVR Biller Aggregatrs Walk In Bank Bill Pay Checks Biller Benefits t Online Payment Channels Reduce Csts All channels integrated Lwer cst f billing Lwer cst per transactin Flexibility & Cntrl Gain cntrl f payment peratins Imprve Operatinal Efficiency Reduce time spent n payment research Eliminate manual psting f payments Real-time fraud/risk management Enhance Custmer Service Marketing Deliver cnsistent experience t custmers acrss all channels Imprve custmer retentin Increase custmer adptin f nline payments Crss sell new prducts and services Drive custmers t lwer cst channels 16 16

18 Online Payment Optins Hw will they impact bill payments? Cnvenient Mbile E-Cmmerce Optins Real Time and Same Day Payments Blckchain Chatbt Online Payment Channel Integratin 17 17

19 Discussin Current Landscape and Trends Is the cnsumer viewpint cnsistent with yur view f payment channels and ptins t pay? If accepting nline payments nw, are all f yur needs and challenges being met and addressed? The ways cnsumers pay is evlving, are yu evlving? 18 18

20 Key Takeaways Cnsumer payments cntinues t evlve and will cntinue as the demgraphics change Review yur metrics. Hw d the survey results stack up t yur cllectin mix? Internally, are all stakehlders n-bard with the cllectin prcess and future strategies t meet custmer demand fr emerging payment ptins Althugh trendy, des it make sense t pursue the latest and greatest payment ptins 19 19

21 Questins Cntact Inf David Ptasznik KeyBank Enterprise Cmmercial Payments Sr. Prduct Manager