E-Payment Rate Approaching 50%.

WESTLAKE VILLAGE, CA -- A study of mortgage borrowers found that nearly half of them now pay their monthly bill electronically, up from just 34% two years ago.

Moreover, electronic payment - whether through automated bank account debits or through online bill paying - results in higher customer satisfaction, according to a survey done by J.D. Power and Associates. (See related story, this page.)

Rockwell Clancy, executive director of the banking and mortgage practice at J.D. Power, said that electronic billing and payment results in more consistent and accurate loan servicing, which boosts customer satisfaction with their servicer.

Satisfied customers require less contact with their lender's customer service agents, resulting in lower servicing costs as well, he noted.

Mr. Clancy told MSN that the more payments are on autopilot, usually through automated clearinghouse payments but also through website payments, the less friction there is in the process, reducing payment and billing mistakes.

The significance of the trend toward electronic payment is that it boosts customer satisfaction while helping lenders control costs, he said. Mr. Clancy said lenders should promote electronic billing and payment as a result.

"It speaks to this idea that the customers themselves are seeking that option not only because they can but also because they find it is a better experience," he said. "The happier customers are, the less costly it is to service them."