With a remarkable 10-year history of double-digit growth, BPAY is continually looking for opportunities to increase its uptake as the preferred payment service beyond the framework of recurring household bills. Building BPAY usage in areas not yet associated with the brand will help drive its status as Australia's most popular bill payment option.

One such example is the superannuation industry. With legislative changes around super contributions in mid 2007, not surprisingly, BPAY experienced an impressive spike in payment volumes in May and June 2007.

The unexpected development, however, is its knock-on effect: The growth seen in 2007 has been carried into 2008, with a 25 per cent year-on-year growth in June.

The reasons are two-fold: More super funds are offering BPAY as a payment choice; and consumers are more frequently turning to BPAY as an easy way to make voluntary contributions.

The BPAY benefit for superannuation funds centres on a simplified reconciliation process. Superannuation providers use BPAY's Customer Reference Number (CRN) as a tool for tracking and allocating contributions made by its members to a specific fund within the company's portfolio.

Even more significantly, however, a customised CRN identifies the type of contribution being made, for instance a salary sacrifice or a spousal contribution.

Account Manager David D'Eramo of Westpac recently collaborated with Aviva Australia, which is part of the global financial services company, Aviva Group, to customise a BPAY solution for their business and customers. Using a modified CRN to identify the type of contribution being made provides the company and client with vital information, particularly in relation to tax obligations.

Live since April 2008, Aviva's BPAY solution runs on the Navigator superannuation platform, and involves customising the first two digits of the CRN to represent the different types of contributions.

If any Member is interested in learning more about how BPAY can help superannuation clients, please call the BPAY office (02 8252 0500).

Over the past decade, the number of students attending private schools has grown by more than 22 per cent¹. It is estimated that more than 30 per cent of NSW students now attend non-government schools¹.

As a consequence, schools are looking for ways to help parents manage the related financial obligations, such as tuition payments.

One option is BPAY. Its 2007 Usage & Attitudes study reported that 10 per cent of Australian bill payers made a school fee payment in the last month.

According to BPAY General Manager Andrew Arnott, the electronic bill payment service has proven attractive to both schools and parents because it offers a high degree of control.

"For schools, BPAY simplifies the reconciliation process, saving time and money. And parents have the flexibility to structure fee payments that can be made 24/7 from anywhere in the world," says Arnott.

One example of a successful BPAY roll-out is the Catholic Education Office (CEO) of the Archdiocese of Sydney.

The CEO is responsible for the leadership, efficient operation and management of the schools that educate almost 63,000 students in parish primary and regional secondary schools in the Archdiocese of Sydney.

Part of its role is to administer and process the collection of school fees on behalf of its 147 schools.

"We wanted to introduce BPAY for many years, however, we were unable to do so because of constraints with our existing software package, which had not been upgraded since 1989," said Terry Keogh, Director of Financial Services, Catholic Education Office Sydney.

"Once our new software package, SAS from Human Edge, was installed in 2004, we contacted the Catholic Development Fund (CDF) to determine how to implement BPAY in a way that would best service both the parents paying the school fees, as well as the individual schools receiving them."

All of the schools bank with the CDF, which accesses BPAY facilities through the Commonwealth Bank. The CDF accepts funds on deposit for schools, and operates within strict prudential guidelines and accounts.

In collaboration with the CDF, the CEO developed a system whereby its fee payers have an eleven digit account number that doubles as the BPAY reference number. The first five digits identify the diocese and school to which the fees are being paid, and the remaining digits identify the individual payer.

"In March 2005, we began trialing BPAY in six schools," said Mr Keogh. "From this limited successful trial, BPAY, in conjunction with the SAS rollout, was expanded to another 96 schools in 2005, and by June 2006 all of our schools were able to offer BPAY facilities."

For the CEO, the benefits of BPAY address the needs of all key stakeholders.

The individual schools:

• A streamlined bill collection process that allows each individual school to log into its BPAY transaction account to print out a list of payments from the previous day and receipt them according to their account number.
• The increase in BPAY has resulted in a significant decrease in cash receipts, reducing school risks and streamlining the bank deposit process.
• The receipt number that is automatically generated with each BPAY transaction serves as proof of payment, so the schools do not need to prepare and print a school receipt for the parents, saving time and paper.
• BPAY transactions are less expensive than EFTPOS transactions since BPAY does not require the purchase or hire of any additional equipment.

The parents:

• Parents have a sense of control, giving them the option of paying their fees 24 hours a day, seven days a week – whenever it is convenient.
• BPAY allows parents to structure their fee payments on regular schedule, for instance weekly, fortnightly or monthly, spreading their financial commitments throughout the entire year.
• BPAY has also reduced the need for parents to go to the school and wait in a queue to pay fees.

"When parents schedule regular BPAY payments throughout the calendar year, they actually begin to pre-pay their fees, giving them a sense of security and confidence," says Mr Keogh.

"Parents are definitely meeting their financial commitments better, and we have observed a reduction in account arrears."

Every day, more and more people are opting to pay their fees via BPAY and in just over a year, this payment option is the preferred method by both parents and schools, accounting for a greater percentage of all school fee payments.

"We plan to develop more of our administration processes online," said Mr Keogh. "As a service to our parents, we will start to automatically upload the BPAY receipts electronically. Administratively, we are creating a daily bank deposit for BPAY that routinely matches up in the bank reconciliation process."

The Catholic Education Office, Sydney was one of the first dioceses in New South Wales to offer the BPAY bill payment option to its schools and their parents.

¹ Australian Bureau of Statistics

For the first time, the qualitative portion of the 2007 Usage & Attitudes Study directed several questions to the 18-25 year old demographic to better understand these first time bill payers.

It quickly became clear from this initial glance that there is an opportunity for BPAY to communicate specific messages to this group around bill payment choices, and by doing so, potentially expand its number of users.

More recent proprietary research, completed in August and conducted by TNS, further revealed critical information about this demographic. Specific questions around bill payment and BPAY were directed to a group of 16-25 year olds.

Awareness of BPAY as a bill payment method, although lower than the general public, was higher than expected with 76 per cent of this age group familiar with the brand. Other frequently identified options included paying in person at Australia Post (69%) and direct debit (54%).

Once young people started paying bills, the number they are responsible for soon adds up. Of those who are paying bills (88%), they pay or contribute to an average of 6.3 bills, with the older half of the age range citing even more bills. Not surprisingly, mobile phone ranked as the most common payment, followed by Internet connection, car registration, electricity, telephone, car/general insurance and rent.

The Internet is used for a range of activities by this group, with almost three quarters (74%) banking online, 71 per cent using it for social networking, and two thirds (67%) shopping online.

Peer influence (10%) did not score highly in how young people decide to pay bills. Instead the options listed on the back of a bill (56%) and parents (47%) had the greatest impact.

BPAY was cited as the main method of bill payment (47%). In person at Australia Post (17%) and direct debit (8%) trailed significantly further behind.

Using these insights as a guide into this youth area, BPAY is currently developing several tactical initiatives.

The first project is a collaboration with My Diary, a school diary that is distributed to approximately 60,000 secondary and tertiary students nationally. The 2009 edition will include a full-page BPAY 101 tutorial – basically how to sign up for Internet Banking and start using the BPAY service.

This fundamental and straight forward information will also form the basis of a youth brochure, which will be distributed in several ways. It will debut at O Week when BPAY partners with CBA to communicate the BPAY message to more than 30,000 university students.

Additionally, BPAY has identified a youth program called SOAR! that is part of School's Out Youth Services. SOAR! prepares young people between the ages of 16-21 for issues and situations in 'real life', including managing finances. BPAY plans on making its youth brochure available to this organisation.

In an effort to continually refine our communications efforts with this increasingly important market, the 2008 Usage and Attitude Study, which gets underway later in the year, will expand its demographic to include people 16 years and up.

If any BPAY biller is interested in BPAY's youth research or would like to collaborate on a youth initiative, please contact BPAY's Marketing department at marketing@bpay.com.au.

In March 2007, BPAY expanded its membership base to include the Payer Institution Member (PIM). PIMs are not necessarily ADIs, but organisations such as church development funds, that maintain value accounts for customers. As the name implies, a PIM can only act as a Payer Institution.

Since the launch of this new membership class 18 months ago, BPAY has welcomed 13 PIMs to the Scheme, more than double its forecast of six PIMs in the first two years.

GE Money Home Lending and Lombard Finance are the two most recent recruits, among a spectrum of personal finance and credit providers.

Servicing Programme Manager, Darren Boddington from GE Money Home Lending (GEMHL) said their aim is to provide borrowers with the BPAY functionality so that their mortgage can be used as a centrepiece of personal finance.

Viewed as a competitive edge, BPAY enhances GEMHL's product offering, giving customers a simpler option to manage their finances.

GEMHL borrowers have been informed of the BPAY option via their statements and information on their Internet banking site, with BPAY volumes already exceeding next year's targets.

According to BPAY Operations Manager Keith Brown, there has been impressive volume generated from these limited number of new Members. And, the average transaction value of $880 far exceeds the average BPAY payment of $630.

"This new membership class was designed to give people broader access to BPAY at a time when electronic banking was reaching critical mass," said Brown. "The ongoing successful recruitment of PIMs, and the acceptance of BPAY by its customers, illustrate the continued appeal of this payment option."

In 2007, the majority of BPAY payments – 83 per cent – were made via the Internet. This is an increase of 21 per cent from five years ago – a clear indication that online banking plays a critical role for Australian bill payers.

BPAY enjoyed a thriving 07/08, with continued impressive growth across all performance indicators, re-affirming its pioneering position as an electronic bill payment option a decade after its launch.

The value and volume of BPAY payments both posted a 14 per cent year-on-year increase. Almost 21 million BPAY payments were made in July 2008 representing more than $15 billion dollars.

There was also a steady growth in new billers joining the Scheme last year with the list expanding from 15,236 organisations in July 2007 to 15,893 in July 2008.

One of the reasons for BPAY's popularity is the consistently positive consumer experience with the service, which includes the standardised way BPAY is presented on a company's bill.

Whether delivered electronically or on paper, a bill must clearly and prominently display three specific elements:

1. BPAY logo
2. Customer reference box (including the CRN and Biller Code)
3. Payment method advice

The vertical BPAY logo appearing on a bill must be at least 11 millimetres in height. If there are space restrictions, a biller may use the horizontal logo with a minimum height of seven millimetres.

The box containing the Customer Reference Number must be aligned with and the same height as the BPAY logo.

Logically, the payment advice section must be close to the BPAY logo and Customer Reference Number box. The payment advice sections vary, depending on if a biller accepts BPAY payments from a credit card.

For alternate bill configurations due to space constraints, billers are requested to consult with their Financial Institution. And prior to printing any invoice template, billers must seek approval from their Financial Institution.

A complete list of the brand guidelines and the artwork for the BPAY logo, Customer Reference Number box and payment advice sections can be downloaded from the BPAY website (www.bpay.com.au).