America Online has launched a new service designed to simplify and streamline online bill paying for its members.
AOL Bill Pay, offered to members at no extra charge, is provided through an AOL alliance with Yodlee.com, a company specializing in online personal finance services.
AOL members who sign up for AOL Bill Pay will receive summaries of their online bills through AOL e-mail messages, from where they can link directly to the vendor Web sites to make the payments, AOL says in a statement.
AOL Bill Pay consolidates log-in and password information into a single sign-on process through AOL, the company says.
More Secure
The service can also be configured to provide alerts to remind users of due dates or of credit card transactions that exceed a certain amount, which could indicate fraud, AOL says. AOL Bill Pay also stores expenses information, allowing users to track their spending history.
The security alerts are customizable and can be delivered in a variety of ways: via e-mail, instant messaging, or as a text-based message in a cell phone, says Andrew Weinstein, an AOL spokesperson. AOL Bill Pay triggers an alert as soon as a pre-set threshold is crossed, such as a bank account falling below a certain point, Weinstein says.
The e-mail messages AOL generates for this service use special security technology that makes them impossible to spoof, so users know that the messages aren't fraudulent, says Billy Kenny, another AOL spokesperson. The link on the body of e-mail messages take users directly to the Web page where the payment is made, saving users time and increasing the convenience, he says.
AOL Bill Pay can connect directly to over 2500 biller Web sites, he says. If a user has an account with a vendor that isn't part of the AOL Bill Pay list, AOL has the ability to add that vendor as long as it has the capacity to accept online payments, Kenny says.
New and Improved
AOL offered a similar but less comprehensive online bill paying service to its members, but discontinued it after its partner in the venture stopped offering it, Kenny says. AOL Bill Pay is available to AOL's U.S. subscribers, and there are no current plans to offer it outside of the U.S. for now, Kenny says.
AOL estimates that 60 percent of its members pay at least some of their bills online, and of those about 67 percent pay them at multiple biller Web sites, AOL says in its statement.
Some users might be hesitant to create a single sign-on to their online billing accounts, because, while convenient, it also creates a single point of failure should the information fall into the wrong hands, says Patrick Mahoney, an analyst with The Yankee Group. "Some people may prefer going to the individual Web sites instead of having the one password access to everything."
Still, AOL has a secure platform and a good online and e-mail safety record, so the service will seem attractive to many users and help AOL address its problem of subscriber defections, he says. "A service that simplifies online bill payment will be of interest to consumers," he says.
Although some companies provide this type of service, the market isn't crowded and existing offerings haven't been highly publicized, he says. "It's not like AOL is coming into a market with a lot of competition," Mahoney says.
"AOL is looking at this as a retention tool, to make it harder for subscribers to leave. AOL is losing a lot of subscribers quarterly as people go to broadband and drop AOL," Mahoney says. "They're trying to entice subscribers to stay through these sticky services. It's a very good idea."
AOL in January 2004 reported having 24.3 million subscribers in the U.S. as of December 31, 2003, down 2.2 million from year-end 2002, primarily because Internet users are moving from slow dial-up connections to faster broadband connections, such as DSL and cable modem. AOL doesn't offer those types of fast connections, only the slower dial-up kind.
To attract broadband users and hang on to existing subscribers who are signing up with a broadband provider, AOL offers a plan called AOL for Broadband. Through it, AOL provides AOL services and content for $14.95. It's targeted at people who subscribe to a broadband service and thus wouldn't be interested in AOL's traditional $23.90 package of an unlimited dial-up connection and content and services.
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