The volume of check payments sent through the mail has fallen 4 percent to 34 percent of overall volume, found the 2007 Consumer Bill Payment Survey, conducted in January this year. Of the 2,018 American online respondents, all of whom were at least party responsible for the payment of household bills, 39 percent now make payments online. That’s a rise of 4 percent since the previous survey conducted in December, 2005.

"Once considered a nice-to-have add-on, online bill payment is now the foundation of the Web banking user experience,” said Gwenn Bezard, research director with Aite Group. “I expect further growth in this area due to Generation Y's greater reliance on technology in their everyday lives as they move into early adulthood, and the increasing adoption of electronic bills, especially as the environment becomes a mainstream issue."

Cost savings, increasing confidence in online security and convenience are other key reasons for consumers switching from postal payments to online. Eighty-five percent of respondents said “paying online bills is faster” and 85 percent thought that “paying bills online saves the paper, stamp and the hassle of paying bills by check”. The majority of online banking services enable free online bill payments.

Paper bills are seen by many consumers as being environmentally unfriendly. Fifty-two percent of online bill payers cited "receiving bills in electronic form saves paper and energy, helping our nation's environment" as a major reason they chose to receive e-bills. Thirty-nine percent of those now using online billing have cancelled paper billing from their banks, says the report.

The 2007 Consumer Bill Payment Survey is the seventh undertaken since its inception in 2002. In the first survey, 61 percent of bills were paid using checks and just 13 percent of bills were paid online.