SAN FRANCISCO-- Building a freemium service? You might want to pay attention to this tidbit: The mobile bill-payment service PageOnce is dropping its $4.99 subscription fee and going to an a la carte model.
PageOnce CEO Guy Goldstein told me at the Future of Money conference that the company has been testing different price points for its paid service. While getting financial account data and seeing bills remains free, helping users pay bills is where the company makes money. To date, PageOnce has charged $4.99 a month for this. Starting in early May, the per-month fee will be replaced by an a la carte per-bill fee, from 25 cents to $1.00. The company is still doing trials to determine the optimal price point.
Goldstein says that currently, with the subscription model, PageOnce is processing about $40 million of bills a year. Early tests show that moving to the pay-as-you-go model will take that to $200 million. Goldstein previously told me that the annual U.S. cashflow through consumer bills is $3.7 trillion, so he's still got some headroom in the business.
PageOnce is bucking conventional wisdom, which is that subscription fees are the way to go if you can get them at all. But, Goldstein says, "$5 is a barrier." He recognizes that some users will end up paying more for his service. Many users will pay less, too. Overall, he says, he'll have more users.
Goldstein says that in financial services, transparency has value, and the pay-per-service model resonates with users. Especially, he says, when his service is compared to other financial products where fees are obscure or buried.
However, the promotional materials on the PageOnce Web site don't make it very clear the the bill pay service costs money at all. The site pitches the "free" signup to the service. Searching for "How much does PageOnce cost?" yields a FAQ answer that says, "Bill Pay is included as a feature in Pageonce Gold," without a link to information on PageOnce Gold