Mastercard debuted a new service, Bill Pay Exchange, that facilitates bank-based real-time bill payments.
The offering will be white-labeled into Mastercard issuers’ apps and will leverage infrastructure from The Clearing House (TCH) so that users can pay bills to over 135,000 billers in real time. It also includes some digital money management features, enabling users to see overhead views of all their bills in one place and receive notifications when bills are due. The service will begin testing in Q1 2019 and go live the following quarter.
Digital bill pay is rising, but consumers don’t like to pay through issuers. The share of bills paid digitally should rise from 56% in 2016 to 77% in 2022 — much faster than overall bill pay market growth — marking a major opportunity for payees, according to Business Insider Intelligence estimates. But when users are making digital bill payments, they typically favor biller websites — which represent over one-third of bill pay volume and value — over issuers, which only hold about 13% of the market. And issuers fare even worse among younger generations, which could make it harder for banks to grab share as millennials gain spending power.
Mastercard’s solution could help change that for a few key reasons.
By growing engagement with its bill pay network, the move could also be a strategic play for Mastercard. Mastercard is amid a period of strong growth. But as the payments landscape shifts, the network has been working to broaden its sources of volume by investing in more bank-based or direct debit payments in the wake of its Vocalink acquisition, business-to-business (B2B) payments, and other sources. The US bill pay market is worth over $4 trillion annually, so bringing even a small fraction of that toward issuers could give Mastercard a meaningful boost and help it meet its growth goals.
Article by [author-name] (c) Finance - Read full story here.