More than 50 percent: That’s the amount of U.S. bills paid online.
As eCommerce continues to rake in revenue — global sales volume topped $2.3 trillion in 2017, and that could nearly double by 2021 — online billing platforms are rushing to incorporate payment processing capabilities into their offerings. That’s according to the new “Payments Powering Platforms Tracker” from PYMNTS.
Younger consumers are leading the way when it comes to online bill payments, with 61 percent of those payments coming from millennials. Another online bill payment trend is a move away from banks for those transactions. According to a new report from Aite, 73 percent of U.S. online bill payments made by consumers in 2016 were conducted via biller-direct sites, up from 62 percent in 2010. That growth came, in part, at the expense of bill-paying sites and services operated by banks. They accounted for 27 percent of online bill payments in 2016, down from 38 percent in 2010.
Rent checks, though, continue to endure, according to the Payments Powering Platforms Tracker. It cites a figure from the Federal Reserve Bank of Boston that says more than 80 percent of rent payments are made via cash or paper checks. That’s despite the frictions that plague such payments, like slower transaction times and security flaws.
Companies active in the rental space are trying to push the move to digital. For instance, online real estate platform Zillow, as part of its effort to gain a larger foothold in rentals, has added rent payment processing features to its platform.
The Zillow platform enables renters to apply for multiple rentals with one application — including background checks and credit reports — along with paying rent. The features intend to help landlords avoid the time and hassle involved in screening potential tenants, and give time-strapped renters a competitive edge in the rental process.
Zillow faces increasing competition from other companies also offering online rental payments and related services. The PYMNTS tracker report includes an interview with Ryan Coon, Co-founder and COO and rent payment platform Avail. That company and others are, according to the tracker report, “hoping to eliminate not just paper rent checks, but also paper applications and legacy systems that slow down the rental process.”
The move from analog to digital — from paper to electronic payments — is an ongoing trend for a variety of industries, including construction and government. The rental industry could well be the next market to undergo that shift.