After a 19 percent year-over-year increase in 2010, the growth of the US online bill pay market slowed but still experienced a 2 percentage point increase in 2011, with nearly 66 percent of US bank customers currently using online bill pay, a recent study has revealed.

The study has shown that, although online bill pay usage continues to grow, most US consumers still have not consolidated their bill pay at a single institution. Thus, US bank customers setting up automatic/recurring bill payments were found to choose banks and third-party providers (21 percent) over credit card issuers (16 percent).

Insofar as overall bill payment is concerned, banks were found to rank first in consumers’ preferences (56 percent), followed by credit card issuers (51 percent) and third-party providers (44 percent). However, 13 percent of consumers that use their bank to pay bills also use their credit card sites, 4 percent use their bank and a third party provider site and 9 percent use credit card websites along with third party provider sites when paying their bills. On top of all that, 29 percent of US bill payers pay bills across all three categories of providers.

Furthermore, the study has found that, while 60 percent of US customers use some form of bill pay across the different providers, there remains a large group that has not yet adopted the service due to different obstacles. US bank customers have cited the following barriers to online bill pay payments in 2011: security concerns (43 percent), the preference for a monthly reminder of the bill (25 percent), them not being a primary bill payer (13 percent), concerns about available funds (13 percent), the process being too complicated (11 percent), the existence of bill pay fees (10 percent), long account setup (8 percent), bills not being supported by financial institutions (5 percent) and transaction processing time (3 percent).

Moreover, the study has revealed that awareness of advanced bill pay services such as e-bills and Same Day Payments is notable with the exception of Person-to-Person Payments. While more than 40 percent of US online bankers were aware of e-bills and Same Day Payment services, only 26 percent were aware of Person-to-Person Payments. According to the survey, user satisfaction was highest with Same Day Payments (72 percent) followed by e-bills (70 percent) and P2P payments (66 percent). Additionally, all three bill pay services enjoyed a relatively high rate of adoption of at least 44 percent among US bank customers aware of these services.

Finally, the report has found that security remains an important element of financial institutions’ digital strategy. Education is a strong influencer, with 23 percent of respondents finding comfort in information provided by the FIs about their security policies. Additionally, 41 percent of US bank customers have cited security upgrades and improvements to authentication processes as having the greatest impact on improving consumer sentiment.

The report titled “2011 State of Online and Mobile Banking” has been issued by market research firm comScore.