Though online bill payment is in its infancy in India, the average Indian household in the top 10 India cities pays up to 42 bills annually for a variety of services. As per a research conducted by Internet and Mobile Association of India (IAMAI), the number of Indians paying bills online is expected to increase from the current 0.3 million to 1.8 million by 2007-08.
The survey found that 83 per cent of those who paid bills online were male with 17 per cent being women. While 73 per cent were found to be paying their cellular phone bills regularly via Internet, almost equal (72 per cent) respondents paid telephone bills regularly.
Among other online payment preferences, 69 per cent paid credit card bills, 58 per cent paid electricity bills, 42 per cent paid insurance premiums, 36 per cent paid Internet access bills and 27 per cent paid magazine subscriptions online.
Among the top 10 states who have adopted online payment mode, 33.4 per cent comes from Maharashtra, 20.1 per cent from New Delhi, 9.9 per cent from Tamil Nadu and 5.4 per cent from Andhra Pradesh.
54 per cent cited convenience as the most important that induced them into paying bills online, while 35 per cent cited time saving as they could pay bills without having to stand in line at a counter or even go a bill payment centre. On average, customers saved 24 hours a year; paying bills online also reduced paperwork and was an easier way to manage bills. 5 per cent were attracted to online bill payment because they could pay multiple bills at the same time on the same site or on different sites.
31 per cent respondents said that they were being charged for paying bills online, while 69 per cent said they didn’t pay any fees. 79 per cent felt that they shouldn’t be charged for online bill payments, 9 per cent were willing to pay, while 12 per cent were noncommittal.
The biggest reason for not paying online is concerns about security, with 41 per cent of respondents indicating that they did not use the services because of it. 35 per cent of respondents preferred to pay bills at payment counters or drop cheques in drop boxes. 27 per cent of Netizens did not use online bill payment services as they ‘didn’t know how to pay bills online’ or due to fear of ‘technological failure’ during transactions. 14 per cent didn’t know whether their banks provided online bill payment services. 12 per cent of respondents didn't know whether their service providers offered online bill payment services. So there's a case for better communications and marketing.
On the question on what would induce them to pay bills online, 58 per cent of respondents felt that a guarantee that online bill payment services were safe and secure would encourage them to use them. 45 per cent said they would pay their bills online if they got receipts of payments made online. 45 per cent said they would pay bills online if it was free or if the charges were reduced. 34 per cent felt they might use the service if a clear demo of how to use it was provided. 30 per cent wanted an online customer support service, while 17 per cent said they would pay bills online if they could access the Internet more frequently and freely.
Answering to the query about how soon they would start paying online, 60 per cent of the respondents said they couldn't say when they were likely to start paying bills online. 31 per cent said they were likely to start within a year, while a substantial number, 16 per cent indicated that they would do it within a month. 9 per cent said they were likely to start using online bill payment services within 1-3 months, 4 per cent in 4-6 months, 3 per cent in 7-12 months and 3 per cent within 13 months.
The survey was mandated by IAMAI and was conducted by online research agency Cross Tab in December 2005. The target audience comprised Internet users with a sample size of 6,365 respondents.
Speaking about the opportunities that online bill payment may throw, Dr Subho Ray, President, IAMAI, said, “Online Bill Payment is a cost saver for billers and a great revenue opportunity for banks and third-party service providers. Banks are in a particularly good position to cash in because of their reputation as trusted companies and with an estimated 16+ million Indians using their Online Banking Services by 2007-08, they can further maximize their revenues on their e-infrastructure by promoting these services.”