Online Bill Payments Surpass Checks for the First Time Among Internet- Connected Households

2007 Consumer Bill Payment Trends Survey: Volume of Electronic Bill

Payments Reach 39%; Check Bill Payments Decline to 34%

Record 74 Percent of U.S. Online Households Pay at Least One Bill Online

West Leads the Nation - Followed by the South - in Online Bill Payment


New Research Shows Electronic Bills Poised for Major Adoption Growth as

More Consumers Discover the Convenience and Environmental Benefits of

Receiving Paperless Bills at Bank Websites

Apr 12, 2007, 01:00 ET from CheckFree Corporation

    ATLANTA, April 12 /PRNewswire-FirstCall/ -- For the first time,
 consumers in Internet-connected households are paying more of their bills
 online than by paper check, according to a new study conducted by Harris
 Interactive and the Marketing Workshop.
     (Photo: )
     The 2007 Consumer Bill Payment Survey showed that, for the first time,
 online bill payments exceeded bill payments made by paper check among
 online households. Online payments made up 39 percent of the total volume
 of bill payments among online households, an increase of 4 percent over the
 previous December 2005 survey. In contrast, the volume of checks sent
 through the mail fell 4 percent to 34 percent of the overall volume.
     The Consumer Bill Payment Survey - the seventh conducted since 2002 and
 sponsored by CheckFree Corporation (Nasdaq:   CKFR) - highlights consumers'
 growing use of online banking and electronic billing and payment services
 to help them manage their household finances.
     The January 2007 survey polled 2,018 online respondents who were at
 least partly responsible for household bill payments. Respondents are
 representative of the estimated 82.5 million U.S. households using the
 Internet, and the margin of error is plus or minus 2 percent.
     The survey findings include:
     -- A growing number of consumers are turning to their computers, rather
        than their checkbooks, to pay household bills.
     -- Paying bills online has become a mainstream activity among U.S.
     -- Western states, followed by the South, have embraced online bill
        payment faster than other regions, which may be driven in part by
        higher broadband penetration rates and online banking use in these
     -- Paperless bills appear to be catching on as consumers recognize their
        convenience, security and environmental benefits.
     "The fact that online bill payment has overtaken paper checks shows
 that people feel secure managing their finances online," said Gwenn Bezard,
 research director with Aite Group. "Once considered a nice-to-have add-on,
 online bill payment is now the foundation of the Web banking user
 experience. I expect further growth in this area due to Generation Y's
 greater reliance on technology in their everyday lives as they move into
 early adulthood, and the increasing adoption of electronic bills,
 especially as the environment becomes a mainstream issue."
     West Leads Nation in Online Bill Payment, Followed by the South
     Nationwide, consumers paying at least one bill online per month rose to
 74 percent, compared to 69 percent of respondents in the previous December
 2005 survey. Consumer adoption of online bill payment has more than doubled
 since January 2002, when only 37 percent of online households reported
 paying at least one bill online.
     The West ranks first in overall adoption of electronic billing and
 payment, with 78 percent of online households paying their bills online,
 according to the survey. The South ranks second, with 76 percent. The
 Northeast ranked third in online bill payment, with 72 percent, and the
 Midwest trailed, with 71 percent.
     Factors helping drive regional differences included higher broadband
 penetration rates, greater online banking use and technology-savvy
 populations in the West and South.
     In the West, 80 percent of surveyed households receive their Internet
 service through a broadband connection and 83 percent use online banking to
 check their account activity or transfer funds. By contrast, the Midwest,
 which trailed in EBP adoption, 70 percent of households have broadband
 Internet connections and 76 percent use online banking, according to the
     Consumers in Western states also were more likely to pay bills at
 online banking sites (42 percent), than those in the South (38 percent),
 Northeast (37 percent) and Midwest (33 percent).
     Among the survey's six consumer bill-payer personality segments, there
 were more E-Savvy Planners living in the West (11 percent) and South (15
 percent) than in other regions. This consumer segment enjoys trying the
 latest technology products and using financial management tools to organize
 their finances. E-Savvy Planners pay bills online because it's safer than
 mailing a check, they regularly check their credit reports and are more
 likely to use online banking (94 percent) and online bill payment (91
 percent) services than other consumer segments. For more information on the
 six types of consumer bill payers, visit
     Rising Postal Rates Encouraging Consumers to Switch to Online Bill
     American consumers increasingly rely on online bill payment services to
 save time. Eighty-five percent of survey respondents said, "paying bills
 online is faster."
     But the rising cost of mailing paper checks to pay bills also may be
 helping fuel the trend. Some 85 percent of consumers surveyed said, "paying
 bills online saves the paper, stamps and the hassle of paying bills by
     A first-class stamp cost 37 cents in 2005, compared to the current
 price of 39 cents. An approved postal rate increase will bring the cost of
 a first- class stamp to 41 cents on May 14, 2007. In contrast, the vast
 majority of consumers - 93 percent - reported that they get the online bill
 payment service for free from their banks or credit unions.
     "Electronic bill payment is not only a great way for consumers to
 manage their cash flow and ensure on-time payments, but it is also an often
 overlooked way to maintain a tidier, more organized home or home office,"
 said Standolyn Robertson, president-elect of the National Association of
 Professional Organizers (NAPO), and founder of Things in Place, which
 provides professional organizing services to residents of the Greater
 Boston area. "By opting to receive electronic bills, rather than paper
 bills, consumers can reduce or eliminate those stacks of bills near the
 front door, on the kitchen table or at their desks, and there is no bill to
 misplace or drop behind the couch. By simply signing up at their local
 banks or portals, usually for free, consumers can give themselves the gift
 of time and the peace of mind that comes from organization."
     Convenient, Environmentally Friendly E-Bills Poised for Adoption Growth
     Paperless billing seems to be catching on as consumers become more
 aware of the environmental benefits of e-billing. Thirty-nine percent of
 consumers receiving electronic bills at bank websites said they no longer
 receive mailed copies of the bills.
     Other key findings related to e-bills included:
     -- Consumers paying bills at bank websites were more willing to stop
        receiving paper bills than those paying directly at biller sites.
        Eighty-four percent of e-bill users said they were willing to consider
        shutting off receipt of paper bills through the mail if offered the
        choice, compared to 69 percent of those paying at biller sites.
     -- Fifty-two percent of e-bill users cited "receiving bills in electronic
        form saves paper and energy, helping our nation's environment" as a
        major reason they chose to receive e-bills.
     -- Overall, the most appealing features of e-bills were convenience, due-
        date reminders and "assurance that bills are never late."
     -- Among the benefits for banks and billing organizations, consumers using
        e-bills also reported significantly greater satisfaction with their
        banking and biller relationships and were less likely to switch
        providers. Some 58 percent of e-bill users claimed they were less
        likely to switch banks as a result of receiving and paying bills
        through online banking sites, while 39 percent of e-bill users said
        they were less likely to switch to a competitor's service.
     -- Seventy-two percent of e-bill users said they were satisfied or very
        satisfied with their online banking experiences, compared to 52 percent
        for those who didn't use e-bills. More satisfaction also translated
        into word-of-mouth endorsements. E-bill users were 58 percent more
        likely to recommend their banks' online bill payment services to family
        members and friends.
     Online Bill Payment Adoption Climbs
     The average survey respondent paid 11.5 bills in a typical month, with
 approximately 39 percent of these, or 4.5 bills, paid online, and 34
 percent, or 3.9 bills, paid by paper check.
     Consumers who used online banking sites for paying bills reported
 paying more bills per month and paying far more of them online. These
 consumers paid 8.2 (63 percent) of their 13 monthly bills online, and just
 1.6 (12 percent) by paper check.
     The survey also showed growth in consumers' use of online banking sites
 to pay bills. In the latest survey, 38 percent of survey respondents said
 they paid at least one bill per month at an online banking site, compared
 to 33 percent in the December 2005 survey.
     An increasing number of online banking users are activating online bill
 payment services, further fueling EBP adoption. Forty-eight percent of
 online banking customers pay bills online, compared to 37 percent at the
 end of 2003.
     Those who pay bills at online banking websites reported using more of
 their banks' financial services overall than non-EBP users, including
 automatic teller machines, demand deposit accounts and loans. Online bill
 payment customers also tap into more online banking features such as
 electronic statements, online account transfers and check imaging services.
     Biller Sites Growing Steadily
     Meanwhile, consumers' use of biller websites to pay bills continues to
 grow, though at a slower rate than in the past. Fifty-five percent of 2007
 survey respondents made a payment directly at a biller's website, up from
 53 percent in the December 2005 survey.
     Consumers with household incomes of less than $50,000 were more likely
 to pay their bills at biller websites, while higher-income groups -
 particularly those earning more than $100,000 - were more likely to pay
 their bills at online banking sites.
     Consumers cited "faster," "saves paper, stamps and hassle" and
 "provides more control over payment timing" as the top three benefits of
 paying bills at online banking sites, according to the survey. Non-users
 cited "don't know enough" as the leading reason why they don't pay bills at
 their banks'
     websites. Concerns about online security were cited by only 13 percent
 of respondents, compared to 20 percent in the December 2005 survey.
     CheckFree Electronic Commerce Division provides electronic billing and
 payment services that enable more than 2,000 financial services
 organizations to achieve their customer acquisition, retention and
 optimization goals through secure online channels. In fiscal 2006,
 CheckFree processed 1.13 billion transactions and distributed 184.6 million
 electronic bills. CheckFree Electronic Commerce solutions include online
 integrated personal finance management, online account opening, funding and
 transfer; electronic billing and payment for consumers; electronic invoice
 presentment, payment and receivables solutions for small business banking
 customers; mobile payment solutions; flexible Web services technology for
 electronic billing and payment; and payment fraud detection and prevention.
     About CheckFree (
     Founded in 1981, CheckFree Corporation (Nasdaq:   CKFR) provides
 financial electronic commerce services and products to organizations around
 the world. CheckFree Electronic Commerce solutions enable thousands of
 financial services providers and billers to offer the convenience of
 receiving and paying household bills online, via phone or in person through
 retail outlets. CheckFree Investment Services provides a broad range of
 investment management solutions and outsourced services to hundreds of
 financial services organizations, which manage about $1.7 trillion in
 assets. CheckFree Software develops, markets and supports payment
 processing solutions that are used by financial institutions to process
 more than two-thirds of the 14 billion Automated Clearing House
 transactions in the United States, and supports reconciliation, exception
 management, risk management, transaction process management, corporate
 actions processing, and compliance within thousands of organizations
     Certain of the Company's statements in this press release are not
 purely historical, and as such are "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995. These
 include statements regarding management's intentions, plans, beliefs,
 expectations or projections of the future. Forward-looking statements
 involve risks and uncertainties, including without limitation, the various
 risks inherent in the Company's business, and other risks and uncertainties
 detailed from time to time in the Company's periodic reports filed with the
 Securities and Exchange Commission, including the Company's Annual Report
 on Form 10-K for the year ended June 30, 2006 (filed September 8, 2006),
 Form 10-Q for the quarter ended September 30, 2006 (filed November 8, 2006)
 and Form 10-Q for the quarter ending December 31, 2006 (filed February 8,
 2007). One or more of these factors have affected, and could in the future
 affect the Company's business and financial results in future periods, and
 could cause actual results to differ materially from plans and projections.
 There can be no assurance that the forward-looking statements made in this
 press release will prove to be accurate, and issuance of such
 forward-looking statements should not be regarded as a representation by
 the Company, or any other person, that the objectives and plans of the
 Company will be achieved. All forward-looking statements made in this press
 release are based on information presently available to management, and the
 Company assumes no obligation to update any forward-looking statements.

SOURCE CheckFree Corporation