Bills increase turns consumers on to online and telephone banking

Making payments through online and telephone banking is becoming increasingly popular, according to a new report from UK payments association Apacs.



The organisation found that between 2000 and 2005 the number of bill payments made this way more than trebled from 36.7 million to 118.1 million. Nearly 17 million people now bank online, a figure that Apacs expects to increase.

One reason that more people could be banking online and by telephone is that the number of bills we pay is also rising - from 159 bill payments per household in 2000 to 166 in 2005.

At the same time, the number of payments made by cash or cheque has been falling, with regular payments made by cash dropping by nine per cent since 2000. The number of bill payments made by cheque has seen a 26 per cent decline over the same period.

"People today have more bills coming through the door than ever before, so it's no surprise that many bill-payers are finding more sophisticated payment methods that allow them to be more organised in their repayments - whether it is through online banking or by setting up a direct debit," commented director of communications at Apacs Sandra Quinn.

Internet banking was found to be particularly popular among younger people and top earners, with 55 per cent of households with a combined income over £50,000 per year and 41 per cent of 25 to 34-year-olds paying some bills online.

Online accounts 'offer direct banking experience'

More customers in the UK want their banking experience to be direct and simple, an expert has claimed.

Head of Sainsbury's Savings Peter Wood said that people have been gaining trust in online banking accounts, as well as becoming more savvy about using them.

"It's so easy now to transfer money. Within … a few seconds, you can go on and move your money around and it's just so much simpler and quicker," he said.

This kind of direct banking appeals to people who are confident about using the internet - and this number is growing, he added.

Mr Wood said that his bank had reviewed the customer experience of using the internet for banking transactions and was trying to offer savings accounts with as few "tie-ins and restrictions" as possible.

He explains the Sainsbury's Bank offers a savings account which pays above the base rate and also does not have any restrictions or short-term bonuses, which he hopes will help the account "continue to be very straightforward".

Regarding other offers which are more complicated or change their rules over time, Mr Wood cautioned: "Customers need to go into these accounts with their eyes open."

© See Terms and Conditions