San Diego (May 8, 2006) – An extensive, new study into the habits of consumer bill payers has revealed both compelling evidence and confirmation that consumers are increasingly turning to electronic methods to pay their bills and prefer to make those payments directly with their biller. The study also shows that consumers are turning to expedited payments to pay their many bills as close to the actual due date as possible and they have a variety of preferences for making those payments.  For example, while payment by phone is still the principal method of expedited payment, a growing number of consumers prefer to use the biller’s direct web site to make payments. These are some of the pivotal findings of Fort Knox National Company’s second annual consumer preference study. The findings of this new study are being presented today at the NACHA Payments 2006 Conference in San Diego.

Fort Knox National Company, a leading provider of electronic payment solutions, commissioned their second annual Bill Payments and Expedited Payments Survey from Crone Consulting and Javelin Strategy & Research. The intent of the study was to identify key motivations and trends in the use of electronic payment services.

“Do not underestimate the value perceived by consumers in a biller direct solution.  Consumers are expressing clear preferences for how they want to pay their bills.  By understanding payer behaviors, companies can develop strategies that support their overall profitability and customer relationship management objectives,” said Paul Flanigan, Fort Knox National Company’s chief marketing officer.  “Although bank-based consolidator and biller direct payment channels are both high in preference, when you combine all the biller direct payment options, it is a compelling element that two-thirds of bill payments are going through billers’ channels.”

The study also points to an increase in expedited (last minute) bill payment.  “We are seeing the impact of cycle billing in the survey results,” said Richard Crone of Crone Consulting. “Cycle billing complicates personal finances by spreading payment due dates over the course of the month. The date on which consumers pay their bills has become a critical personal financial management issue.”  According to the study, cash flow has become a factor of greater importance in the timing of payments, growing from 48 percent to 54 percent year-over-year. Consumers are turning to expedited payments in direct correlation to cash flow.

The study divulged a number of explanations for the consumer trend toward utilizing expedited payments to pay billers directly. Avoiding “late fees” was again the top overall reason cited for using expedited payments, increasing from 64 percent to 72 percent year over year. Consumers also indicated a strong desire to preserve credit ratings. The widespread and long-time use of late fees by billers has established a fundamental demand and value proposition for expedited payments and associated convenience fees. Billers are motivated by these indicators to provide relief through the option of expedited payments. Another very significant point brought to view by the study was the high percentage of consumers indicating that they are willing to pay a convenience fee of $1.00 to $5.00 in order to avoid a late fee or any potential negative impact to their credit rating.

Demonstrating that a majority of consumers are now embracing technology to make expedited payments, 44 percent were shown to be made by phone, while Internet usage increased from 31 percent to 40 percent, according to the research findings. Looking at the entire body of research, only eight percent of those making expedited payments do so by rush delivery or overnight mail; only six percent use walk-up money transfer and/or wire services.