New MasterCard Research Finds Consumers Like the Convenience of Online Bill Payment and Prefer Paying All Bills at a Single Location

Business Wire, March 18, 2003

Business Editors

PURCHASE, N.Y.--(BUSINESS WIRE)--March 18, 2003

MasterCard International, a global payments leader, today unveiled the results of a qualitative study about consumer attitudes and awareness of online bill payment services.

The research found that consumers favor paying multiple bills through a single location, such as their bank's website, as opposed to making individual payments directly at each biller's online site. The majority of those surveyed cited various key benefits including time-savings, better control over their finances and the ability to pay any service provider -- all at one source.

The key advantages of online bill payment versus paper checks, according to the majority of current users, were its ease and convenience of virtually anytime access via the Internet. The study also found that users preferred the speed and enhanced control of the point-and-click process to pay multiple bills on a single site. Additionally, research participants reacted positively to the benefit of an online payment history, as well as the ability to save money by reducing the need to buy stamps, envelopes and checks.

One of the most significant findings among non-users was overall confusion about the definition of online bill payment. In many instances, non-users grouped other bill payment alternatives, such as checking account direct-debit and direct bill payment at biller websites into their definition of online bill payment. Research participants also cited questions about the security and privacy of transactions, registration and set-up procedures, as well as reliability and costs of online bill payment versus paper checks, as barriers to adoption. Importantly, however, following a simple, step-by-step demonstration of the process, the interest level among survey participants rose substantially.

"Our research concludes that online bill payment is gaining traction among American consumers as they look to new technologies to streamline day-to-day finances and budgeting. We are encouraged by how favorably consumers, especially non-users, responded to the simplicity of an 'electronic checkbook' once we took them through the general service initiation processes," said Cathleen Conforti, senior vice president of MasterCard Remote Payment and Presentment Service (MasterCard RPPS). "The instances of consumer resistance are based largely on confusion about the process and service."

The study was conducted by MasterCard RPPS to help electronic bill payment and presentment (EBPP) service providers, such as banks and financial institutions, facilitate growing consumer interest in online bill payment services, as well as to assist providers with evaluating new ideas to overcome current barriers to mass adoption. Research and advisory firm TowerGroup estimates that approximately 13 percent of U.S. households use online bill payment services today, while only 2 percent of U.S. households used online bill payment in 1998.

According to TowerGroup, U.S. consumers substantially expanded their use of online bill payment services in 2002, a trend that is expected to continue. Independent research firms predict online bill payment will be the fastest growing online financial application in 2003 as consumers become more familiar with completing financial transactions online.

The study is the most recent component of a national campaign from MasterCard RPPS to enhance consumers' understanding of online bill payment services, which enable them to view and pay bills through the Internet -- quickly and efficiently. Participating consumers currently paying bills online said the greatest advantages include:

-- Saving time by using a simple point-and-click process to pay multiple bills at a single site, such as their bank's website

-- Saving money by reducing the need to buy stamps, envelopes and checks

-- The benefit of greater control over payment dates and account balances

About the MasterCard RPPS Study

The results of the MasterCard RPPS study were completed in January 2003. The research included a focus group of consumer bases in Atlanta, Chicago, and New Jersey, each including current online bill payers and another group consisting of consumers who had never attempted the service previously but were aware of online bill payment services. The survey also was weighted by age and income and each group included a diverse array of males and females between the ages of 25 to 45.

MasterCard RPPS will leverage the results of the new study, as well as the results of its 1995 study of Remote Banking Services to assess evolving consumer trends in both attitudes and awareness of online bill payment services and to assist participants in identifying innovative new methods of service initiation and deployment.

About MasterCard International

MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard, Cirrus and Maestro. With approximately 25,000 MasterCard, Cirrus and Maestro members worldwide, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. The MasterCard award-winning Priceless advertising campaign is now seen in 96 countries and in 45 languages, giving the MasterCard brand a truly global reach and scope. With more than 30 million acceptance locations including over 820,000 MasterCard/Maestro/Cirrus ATMs around the world, no payment card is more widely accepted globally than MasterCard. For the year ended December 31, 2002, gross dollar volume exceeded US$1.14 trillion. MasterCard can be reached through its website at www.mastercardinternational.com. 00 p