MM Money

Check It Out: Incentives to Pay Bills Online

Financial institutions, eager to get more consumers to pay their bills online, are offering a new incentive: cash.

Citigroup Inc.'s Citibank introduced a promotion in October offering as much as $200 to new online bill-paying customers, depending on the number of bills they pay electronically. The promotion runs until the end of the year.

At Wells Fargo & Co., customers in certain markets who are new to the service can get $10 if they pay at least one bill online by January. E*Trade Financial Corp. is paying $25 to customers who pay at least two bills online and hold specific types of accounts. Last month, J.P. Morgan Chase & Co. ran a sweepstakes where customers in select markets received a chance to win a grand prize of $5,000 if they paid bills electronically. Online bill-pay services allow individuals to transfer funds electronically from their accounts directly to a biller.

The cash incentives are the latest effort by banks to build their online business, which many see as key to cutting costs and to retaining customers over the long term. Financial institutions face growing competition from the Web sites of billing companies, such as utilities, that offer online bill-pay at no charge. In response, many institutions have eliminated fees for their bill-paying services. But as free bill paying has become the norm, banks and credit unions have had to find other ways to spur use of their services.