9th Annual Online Banking and Bill Pay Forecast: Megabanks Dominate Moneyhawks™ While Paperless Adoption and Online Bill Pay Stall

9th Annual Online Banking and Bill Pay Forecast
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Online banking has clearly established itself as a vitally important selfservice channel. Yet Javelin’s five‐year forecasts suggest online banking has effectively hit its saturation level. Momentum for paying bills online also has flagged, contributing to Javelin’s forecasts for sluggish growth for the viewing and payment of bills through financial institutions and at biller websites. And although the financial services industry is making headway persuading consumers to turn off paper statements, it is clear that many Americans harbor practical concerns and doubts about the promise of paperless banking and billing. In addition, the nation’s four largest banks set the benchmark on the key fronts of online banking, bill pay, paper turnoff, and mobile banking. This is ratcheting up pressure on smaller rivals — particularly community banks — to invest in technology upgrades to satisfy the American consumer’s steadily increasing expectation for self‐service channels and services that provide control, convenience, and safety.

Primary Questions

  • Have adoption and active usage of online banking and bill payment crested?
  • What factors will fuel or hinder adoption of online banking and bill payment?
  • What transactions do consumers prefer to conduct online?
  • What would best motivate different segments of consumers to bank online?
  • Why do consumers prefer to pay bills through a financial institution vs. at a biller website vs. by mail?
  • What specific marketing messages and services can FIs and billers employ to reinvigorate online bill pay?
  • Which consumers are turning off paper statements — and what would spur more Americans to do so?
  • What are the chief obstacles keeping Americans from turning off paper statements?
  • Why are giant banks winning the race to cater to “Moneyhawk™” behavior with online banking, bill pay, and mobile banking?
  • What are the implications for regional banks, community banks, and credit unions — and why are community banks at the greatest risk?


This report is based on data collected online from 5,102 consumers who were primary or shared financial managers in March 2011. The margin of sampling error is ±1.37 percentage points at the 95% confidence level. The survey targeted respondents based on representative proportions of gender, age, income, and ethnicity compared to the overall U.S. online population.

Longitudinal comparisons are based on data collected online from random samples, with margins of error at the 95% confidence level, of:

  • 5,211 households in March 2010, with a margin of sampling error of ±1.36 percentage points.
  • 2,780 households in April 2009, with a margin of sampling error of ±1.86 percentage points.
  • 2,350 households in March 2008, with a margin of sampling error of ±2.02 percentage points.
  • 2,800 households in March 2007, with a margin of sampling error of ±1.85 percentage points.
  • 3,215 households in March 2006, with a margin of sampling error of ±1.73 percentage points. Data

Data measuring adoption of online banking by consumers is based on a telephone survey of a representative sample of 5,004 U.S. adults from Sept. 24 to Nov. 4, 2010, with a margin of sampling error of ±1.4 percentage points at the 95% confidence level.

Secondary data from public sources such as the U.S. Census Bureau and the Bureau of Labor Statistics was incorporated in the forecasts.

The majority of Javelin data for online banking and bill pay is based on “households” rather than on “individual consumers.” This is a typical way of presenting online banking and bill payment data because bills are normally paid on a per‐household basis. In 2011, the U.S. population is estimated to comprise 308 million people. That includes 237 million adults, 120 million households, and 88 million households that are online. On average, there are about 2.6 people per household. Javelin also collects online banking data using a base of all consumers for comparison purposes.

The analysis of financial institutions by size was based on where households maintain their primary banking relationship. Institutions were divided into four categories determined by total deposits as of Dec. 31, 2010, according to rankings by American Banker:

  • Giant national banks: Deposits greater than $750 billion (JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup).
  • Large regional banks: From $30 billion to $750 billion in deposits.
  • Small regional or community banks: Less than $30 billion in deposits.
  • Credit unions: All credit unions, except Navy Federal Credit Union, which was classified as a large regional based on deposits.

Companies Mentioned

AT&T Chase
Bank of America
Charge Smart
PG & E
Citi Group USAA
Comcast Verizon
Farmers Insurance Volly
HSBC Wells Fargo
Jack Henry & Associates Zumbox


The surveys targeted respondents in proportions of gender, age and income representative of the overall U.S. online population. According
to the U.S. Bureau of the Census, the projected 2011 U.S. population is estimated to be 312 million people.1

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