When First Financial Bankshares, Inc. was the first in the nation to launch mobile photo bill pay in 2012, they proved that the leading innovators of the financial industry are not always the big banks.
Today, customers of First Financial Bank who use Picture Pay log in to their bank app 20% more often than those who don’t use the product. Plus, mobile photo bill pay users make nearly 100% more billing transactions than online bill pay customers – the average Picture Pay user does 13 transactions per month, while the average online bill pay user does seven.
“We’re happy with the usage we’re seeing,” said Jeff Casey, Senior Vice President of Alternate Delivery Channels at First Financial, based in Abilene, Texas. “It’s not a channel that’s going to overtake the online option in the near future, but it creates very loyal customers who are wonderful evangelists for the products.”
Strength in Numbers
Customers using First Financial’s Picture Pay can simply snap a photo of a bill with their phone, leaving the app to do the rest of the work to gather the correct information and send the payment. It’s hassle free for the customer because a team of players — First Financial, Malauzai Software, Inc., Allied Payment Network and Mitek Systems — all work in sync to maintain high accuracy rates and shield the customer from any additional labor.
Even before the launch of Picture Pay in 2012, Casey and the First Financial team recognized mobile as a strategic channel and knew they didn’t want to force customers into the online channel to do anything they couldn’t do from their phone.
“We had the idea of mobile-only customers from the get-go,” said Casey. “The part of our offering we were missing was photo bill pay capability.”
But simply taking the online experience and moving it into a mobile experience wasn’t a practical option. Manually adding a biller’s name, address and account number would be a time consuming, complex process, which would have to be done on a small device, bringing the likely opportunity for mistakes.
That’s where Malauzai became not only their mobile provider, but partners in innovation. Also seated at the table to create the mobile bill pay solution — Mitek, bringing in photo recognition software as well as Allied Payments, who would develop Picture Pay as the leading mobile photo bill pay solution for banks and credit unions.
Ralph Marcuccilli, President and CEO of Allied, previously spent 20 years as a bank CIO and recognized the cost of bill pay as one of the highest line item costs for a bank.
“Our bank had its own bill pay, and our cost was just a fraction of what I knew everyone else was paying,” said Marcuccilli. “Bill pay companies were getting $0.75 or even $1 for every one of these payments, even though they’re mostly electronic and therefore only cost pennies.”
Thus, led by Marcuccilli, Allied Payments was born, setting out to make bill pay more efficient and affordable for banks. By 2012, Allied hit the same intersection as First Financial — build for mobile, as it’s quickly becoming the biggest game changer in banking.
“We agreed that we would all get together and develop the mobile photo bill pay solution and try to move it to market quickly,” said Casey. “I tried to get the project approved three times and finally got it approved on the third time, really based on the fact that for a relatively low cost to implement and from the marketing value alone, we could see some substantial returns.”
In a period of about three months, the bank signed the agreement with the vendors and rolled out Picture Pay in January of 2013, making it the first bank in the nation to introduce that feature and beating U.S. Bank to the punch by about a month.
“Community banks can out-innovate and can be first to market,” said Robb Gaynor, Chief Product Officer at Malauzai. “And we can get a lot of features out before the big banks even catch up.”
“We were excited,” said Casey. “Again, it matched up with our strategic roadmap to offer a mobile-only solution to our customers and just made sense with how we wanted to position ourselves as innovators in the mobile space.”
Today, nearly one-third of First Financial’s mobile banking customers are mobile-only customers – they never do any of their banking online.
The bank has about 60,000 registered mobile banking users and 100,000 online banking users. There are 11,000 total active customers on online bill pay and 1,300 customers using mobile photo bill pay. Of the total bill pay transaction volume, about 16% of total money moved is through the mobile bill pay option.
The average age of First Financial’s Picture Pay user is 44 years old, compared to an average of 52 for online bill pay customers. The most active age group is 50-60 year olds, who have almost twice as many transactions per customer than any other age group.
Advertising Gets Educational
As advertising began rolling out for Picture Pay, customers began trying the functionality and the bank immediately saw an uptick of about 12% in mobile adoption.
Mobile Bill Pay Commercial
Today, the majority of First Financial’s advertising around mobile is in the digital space, including YouTube, social media, landing pages within the bank’s site and search engine marketing, with less heavy traditional campaigns and no direct mail built around mobile. The switch to primarily digital also comes with a shift in the theme and focus within the bank’s marketing strategy — a shift to education centered about mobile banking and its features.
Picture Pay Commercial
“The whole purpose of the videos is to show how easy it is to use,” said Michele Stevens, Sr. Vice President at First Financial. “And just general awareness. A lot of people might assume that a non-mega bank might not have this service, so we want the awareness level to be very high and want customers to know and believe that we are a technologically savvy company, and we’ll stay on top of the latest and greatest for them.”
These types of educational videos are now being tested as television spots in the Abilene, Texas market, but unlike digital advertising, such as with landing pages and keywords, TV ads are harder to track true response rates.
“Based on our initial results with search engine marketing, we will never leave that arena in terms of mobile,” said Stevens. “You have to stay out there, have your keywords right and have to manage that heavily. It sure pays off in your click through rates and your adoption.”
For digital marketing focused on driving traffic to First Financial’s mobile banking landing page in March, the bank had 773 clicks, 54,000 impressions and 1.32 click through rates.
“We changed some key words, changed some things on the landing page and went from 264 in February to 773 in March, with the same dollar spent,” said Stevens. “It’s neat stuff, and we’re continuously testing and gathering intelligence to determine the best driver of adoption and make sure we’re continuing to trend up.”
The Mobile Advantage
“If we set up a process that’s so quick and easy and also very intuitive for the customer to snap a photo of the bill, without having to worry about writing down the address or the account number, it can become their default method for paying bills,” said Casey. “In some cases, they pretty much forgo the use of online bill payment.”
Malauzai now has 19 banks and credit unions live with Picture Pay. “The single biggest and easiest proof point is usage,” said Gaynor. “Somewhere between 10 and 12 percent of active users are using Picture Pay.”
Allied also has about a dozen additional mobile banking partners and is approaching 60 total financial institutions supporting Picture Pay. Other well-known banks to offer mobile Picture Pay are U.S. Bank, BBVA Compass and FirstBank, based in Lakewood, Colorado.
“What most have done, including U.S. Bank and BBVA Compass, is they use it as an add payee function,” said Marcuccilli.
But users of Picture Pay aren’t required to set up payees in order to pay bills. In fact, two-thirds of the time, people opt to pay with only a picture, rather than scrolling through a list of payees. There is also a higher percentage of one-time payments, such as medical bills, since users don’t have to go through the trouble of setting up a new payee and instead, can just snap a picture to pay the bill.
“It becomes a difference in philosophy,” said Marcuccilli. “We try to design around what people do, which is pay bills. They’ve only been forced to think about payees.” And because the app stores a picture of the bill, customers no longer have to keep paper copies of their bills, since the app already does that for them.
“Customers told us, ‘I take a picture because you keep a copy for me,’” said Marcuccilli. “Wow, what a great benefit that we really hadn’t even thought about.” That picture is also sent along with the payment to the payee, an extra security feature that traditional bill pay doesn’t have.
“99.4 percent of time in last 12 months, we were able to complete the payment without the user doing anything other than taking the picture,” said Marcuccilli. “In the end, simplicity always wins and always has higher adoption and more people. That’s really what we’re about. We’re using innovation to make peoples’ lives simpler, and we know we’re going to have happier customers because of it.”
Of all Picture Pay users, 50% of them were not users of bill pay through their bank — they were paying their bills through another method such as the biller’s website or automatic payments, so the feature is engaging customers who probably wouldn’t have been engaged with bill pay.
So why haven’t more banks employed the technology? It likely comes down to having the photo bill pay capabilities available from the bank’s mobile provider. And outside of Allied’s Picture Pay, most other bill pay companies don’t have a mobile option available. Plus, some banks are concerned that having two systems could create customer service issues, since Allied processes the payments for Picture Pay and other providers manage the payments for online bill pay.
“It’s not an issue of confusion like some might think,” said Marcuccilli. “It’s easy to figure out by simply asking if the bill was paid from their phone or from their computer.”
Allied and the teams of people who are delivering this technology recognized how paying a bill, a function that is central to the banking experience, can be dramatically simplified for any customer seeking an easier approach to managing finances. “Our core belief is that we can deliver leading edge technology to community banks, ahead of the large national banks,” said Marcuccilli. “Community banks don’t need to have huge technology budgets to deliver the latest technology to their customers.”
Sicily Axton is the communications manager for StrategyCorps, a Nashville-based company that works with financial institutions nationwide to deliver mobile and online consumer checking solutions that enhance customer engagement and increase fee income.