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Commentary & Analysis

Snail Mail Pales: Paying For Paper Reserving


By WhatTheyThink Staff
Published: June 16, 2003

By: Frank J. Romano June 16, 2003 -- Monthly bills in your mailbox could become as rare as gas attendants. In a move to cut administrative costs and save on paper and postage, some companies have started billing customers for paper statements. Companies like Primus, MetroPCS, State Farm, USAA, American Express, NetBank, and Ameritrade have begun charging for them. Only a year ago, one credit card company offered me a $5 credit if I opted out of a printed bill. That will not happen again. Consumers argue that charging for paper bills punishes people who are not comfortable handling finances online. Not everyone owns a computer or has a fast Internet connection; although, 60% of American households have a computer at home and Internet access. It has been said that those people who are online are the people who matter—in terms of income level and credit worthiness. Though many people can use a computer with a fast link at the office, employers frown on personal use of the system. You have to pay $8 a month to receive paper invoices for loans from USAA. Online statements and automatic payments are free. Ameritrade charges $2 for every mailing. NetBank has no branches; it once sent paper statements but now charges $3 for each. Verizon, AT&T, Sprint, and some energy companies automatically stop paper statements after customers opt to pay online. American Express gives you an option to receive one or both versions. Most companies send an e-mail notice that your online bill is ready. Most online customers who want to continue receiving paper bills must request them. Some companies, like America Online, refuse to even offer paper bills. Bills for fixed installments are the most likely to disappear from the mailbox. Consumers are used to coupon books with reminders to pay their mortgages and other routine loans. State Farm said that those customers would have to pay $1 for such paper statements. Company representatives say that they need to cut costs and that consumers need to adapt. That is awfully cheeky of them. We should have the choice, and there should be no penalty for that choice. The average company saves about $1 a bill by moving from a paper-based system to an electronic system. With a million users, that could add up to a CEO’s bar tab. We can only chuckle when we see consultants and informal working groups of vendors predict the growth of transaction printing (monthly bills and statements) in color. What transaction printing? There will still be the need to print these items for those consumers who do not choose to go online. The problem is what those giant credit card, insurance, utility, and financial services companies do when the digital print volume no longer supports an internal capability. We think they will farm it out to commercial printers. It will be harder and harder for some companies to justify their own digital printing in-house. We think this will become an opportunity for commercial printers to offer the service. Some are doing it now.



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