Organizing household bills and financial statements can quickly become unwieldy. Plus, hanging on to all that paper eats up valuable storage space. The environmental impact of producing and mailing billions of bills and statements to consumers can also add up quickly.

So what’s the solution? It might be digital mail.

The facts

It’s true: Converting paper bills and statements to electronic documents can help reduce the strain on the environment. According to PayItGreen.org (a partnership between financial institutions and businesses that provides education on environmental impact of electronic statements), if just 20% of Americans switched to electronic bills and statements, paper consumption could drop by some 147 million pounds, while gas consumption could decline by nearly 15 million gallons.

To date, however, there hasn’t been an easy way for consumers to make the switch to electronic bills and statements. Current systems often require users to visit multiple websites to review and pay their bills — which means keeping track of multiple log-in names and user passwords.

What’s more, you may want the ability to print your bills and statements if needed. Not all electronic billing systems offer such capabilities. And some consumers are leery of giving up the ability to store copies of their financial records, either in paper or on their own computers.

Given the shortcomings of current systems, it’s not surprising that a 2011 study by NACHA (National Automated Clearing House Association) found that just 25% of consumer bills are sent electronically. This number may soon rise, however.

The solution

A handful of companies (see the sidebar “Digital mail providers”) are set to offer a new type of electronic billing and payment solution that’s being referred to as “digital mail.” It allows you to electronically receive, organize, act on and store your bills and statements. What’s more, the electronic statements have the same look of the paper ones you currently receive via the U.S. Postal Service, but you can access them from computers and mobile devices.

Because digital mail also offers a way to store and access records, you can review older bills to, for instance, check the amount you spent on medical expenses during the year before you meet with your tax advisor.

And, although no computer application can claim to be fail-safe, these systems have instituted bank-grade security and encryption systems to protect the data being transmitted and stored.

How it works

While all digital mail solutions offer the same general capabilities, you’ll find a few differences in how they operate. With some, incoming bills and statements are transmitted to a secure electronic mailbox that you access via a protected log-in. With others, the system “scrapes” your billing data from companies you’re connected to electronically and then presents this information to you in one place. Some systems even notify you of any new bills or other documents via e-mail or text.

Most solutions allow you to create backups of your digital mail on your own computer. Providers vary in the length of time that they’ll electronically store your documents. So make sure you’re comfortable with the provider’s storage policy before signing up.

At least for now, these services are generally free to consumers. Companies offering them make money by charging the vendors — such as utilities and credit card issuers — that send the bills. Typically, this charge is just a fraction of the cost of mailing paper statements, which is why it makes sense for these companies to pay for the privilege of sending the documents electronically.

The flip side

While digital mail solutions promise to make consumers’ lives easier, they have a few quirks you need to keep in mind. For starters, in order to receive a particular bill via a digital mail provider, the company sending it must be able to transmit it electronically. Smaller businesses may not have this capability yet. In addition, while digital mail providers are unlikely to shower you with electronic spam, some sites may allow companies to send you unwanted marketing materials.

With some providers, once you sign up with them, you’ll stop receiving paper bills altogether. Other providers strongly encourage the shift to electronic bills, but they’ll still allow you to receive paper bills — at least for a period of time.

The bottom line

While the above points are important to keep in mind, the digital mail solutions that are now entering the market promise convenience and the ability to save time. As a result, their use is expected to grow. A 2011 study by research firm InfoTrends estimates that digital mailbox services will deliver 2 billion documents to U.S. consumers by 2015, for a compound annual growth rate of more than 700%. •

Digital mail providers

If you’re interested in pursuing digital mail (see main article), make sure you thoroughly research the services offered by the various providers. Here are some you may want to check out:

doxo:  http://www.doxo.com

Manilla:  https://www.manilla.com

Volly:  https://www.volly.com

Digital Postal Mail:  https://www.zumbox.com