Today’s American Banker tells of AmEx’s plans to force electronic statements on an undisclosed portion of its corporate cardholder base, said to number more than 7 million accounts worldwide (note 1). This is probably a bit of an exaggeration, as it’s more likely that paper statements are being eliminated as a standard account benefit and must be negotiated separately for an additional fee. The company admitted there would be exceptions for those without Internet access or those that still required paper for customer billings.
But it’s still a watershed moment. Today, paper statements are a standard feature of most banking and credit card relationships. In a study last year (note 2), Javelin Research found that only 15% of customers had given up paper statements entirely on their primary credit card.
Currently, the burden falls on the financial institutions to beg, trick, incent, or “green” their customers into giving up paper (see inset above from Texans Credit Union). For example, Citibank frequently uses an interstitial (splash screen) after login that encourages estatements (screenshot below). See our previous posts on those efforts.
The tables are about to turn. With severe profit pressure on most big banks and card issuers, most (all?) will soon adopt the American Express approach and offer electronic statements free of charge, with paper available for an extra charge. This is how checking-account pricing has evolved over the past two decades as banks migrated customers to check truncation as the standard, with paper checks returned for an extra fee (note 3).
Interstitial displayed after logging in to Citibank’s online banking
(9 April 2009, note 4)
Notes:
1. This decision will impact less than 10% of American Express cardholders, which number 92 million worldwide as of 31 March 2009, up 4% from 88 million cards a year ago.
2. Javelin survey of 2,500 consumer head of households in 2008.
3. For no valid reason any more, checks are still returned on my U.S. Bank “free” small business checking account for a $10 monthly fee.
4. Example from our latest Online Banking Report: Selling Behind the Password.