Super Simple with BPAY (September 2008)
With a remarkable 10-year history of double-digit growth, BPAY is continually looking for new opportunities to increase its uptake beyond the framework of recurring household bills such as utilities and telephone.
According to the 2008 Usage & Attitudes Study, BPAY is now also the number one choice for payments such as body corporate fees and tax, and increasingly consumers are using it to invest in shares or managed funds, pay membership fees or top up their super.
The upswing in super payments was largely driven by legislative changes that came into effect in mid 2007. These changes prompted a significant increase in the number of voluntary contributions being made by fund holders, and resulted in a subsequent spike in BPAY payment volumes in May and June 2007. The flow on effect on payment volumes carried over 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.
"Our research indicates that customers are looking for convenient and simple payment choices - and this means an electronic option," says BPAY General Manager, Andrew Arnott. "This consumer trend is particularly relevant to superannuation funds that want to encourage their members to make additional 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, a customised CRN identifies the type of contribution being made, for instance a salary sacrifice or a spousal contribution.
REST is one of 263 different super funds currently offering the BPAY service, 18 of which are also included in BPAY’s Top 500 Biller list. The typically youth focussed super fund is successfully taking advantage of BPAY’s online functionality to engage with its typically younger audience base that has grown up with the Internet.
"Convenience and access are the drivers that encourage our members to connect with us," says REST CEO Damian Hill. "BPAY offers the simplicity and immediacy that facilitates individual member payments, which is particularly important for those who benefit from the government’s co-contribution program."
In 2007, REST implemented a member competition to promote BPAY as its preferred payment method. BPAY payments by individual members rose significantly during this four-month marketing period, a level that has grown even more post-competition. This competition was conducted again in 2008, and achieved further success. BPAY payments made to the super fund increased by 39% over the 2008 campaign period – an increase which has continued since the end of the promotion.
The increase in voluntary contributions achieved through government incentives and individual provider marketing campaigns has seen super make a significant contribution to the overall growth of BPAY.
In the first quarter of 2009 alone, more than 320,000 voluntary super contributions were made to 13 key Australian super funds via BPAY. This equates to an overall value of over $252 million in just three months.
Further growth in the sector is predicted as an increasing number of Australians look to take advantage of the benefits of long term financial planning.