E-billing may not yet be in the category of death and taxes, but it's not too far away from becoming a business...
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That is the consensus of several industry observers. They point out that electronic bill presentment and presentation (EBPP) has been going on in various forms for almost 20 years. It dates back to the advent of Electronic Data Interchange (EDI) and then, later on, to private corporate networks.
In fact, the majority of large companies already use e-billing in some form, particularly in the business-to-business (B2B) space. According to Avi Greenfield, an analyst with independent consultancy Doculabs Inc. in Chicago, some 65% of large and medium-sized companies present at least some of their invoices electronically, and 59% make some of their payments electronically. Key segments already enmeshed in the technology include utilities, telecommunications companies and financial services firms, he adds.
What is new is that the Internet will no doubt replace the two earlier venues as the most popular means for e-billing, most agree. And as that happens, they say it's only a matter of time before individual consumers start using the technology en masse.
"It's all about convenience for the customer," says Rick Edwards, assistant vice president at the Amica Companies, which is based in Lincoln, R.I. and is the nation's oldest mutual insurer of autos. "We're a service organization, and that means we want to transact business in the medium of the customer's choice."
Amica has been presenting bills to customers and accepting payment over the Internet for about two years, and before that the company accepted electronic wire transfers through other means.
Although fewer than 10% of customers' payments come in via the Internet, Edwards says he's not worried about ROI or other issues.
"It continues to grow every month, and I expect it to continue to increase," he said. "We look at this as a service we offer to customers to make it easier and more convenient for them to pay their bill."
Further, he says, as people become more comfortable doing business over the Net, the numbers will grow even higher.
According to a recent study by Gartner Inc. of 100 large companies, about 20% of all B2B invoicing is electronic, taking place mostly through EDI. The firm expects e-billing over the Internet to outgrow and eventually outpace the older technologies. Avivah Litan, a vice president and research director at Gartner, says, "The whole pie of e-transactions is growing, but the Net is increasing in proportion to the others."
There are different options for getting started, but they won't be cheap. Litan counsels newcomers to expect to pay between $200,000 and $400,000 for hardware, software, labor and implementation services -- and that's not even for the highest-end systems, which can cost more than $1 million.
A number of software vendors exist to help businesses Web-enable their bills. Key players here include CheckFree Corp. in Norcross, Ga., edocs Inc. in Natick, Mass., and Avolent Inc. in San Francisco. There are also service providers like Princeton eCom Corp. in Princeton, N.J., which will create and host your e-billing system based on its own software.
On the consumer side, there's a burgeoning number of so-called aggregator sites like CheckFree, AOL and Yahoo. These sites do deals with individual vendors -- credit card companies, mortgage firms and other kinds of companies that most consumers need to deal with. The consumer then goes to one site to sign up to receive e-bills and pay them automatically via credit card, rather than having to face the alternative: going to each of his vendor's sites, signing up on all of them and then returning each month to multiple sites to pay his bills.
To get started, Gartner's Litan suggests that companies XML-enable their existing billing applications, so the option exists to transmit them over the Web if desired. Also, a company will need to create an electronic trading hub with their customers and partners -- an extranet, for instance. Finally, she suggests not neglecting other important features: dispute management, reconciliation to be able to track all the transactions flying back and forth, workflow and routing of payments.
Amica's Edwards says it's possible to begin with baby steps. It may even be preferable, in fact, to separate the bill presentation from the payment options. You can e-mail customers to let them know their bills are ready, and then direct them to a secure, password-protected part of your corporate Web site, for instance. They can then find out when their next payment is due, and for how much, and the total amount still outstanding. Perhaps they then write a check for the amount and send it in via snail-mail or pay by credit card over the phone.
Once the electronic billing presentation system is working well, then perhaps it's time to offer e-payments, Edwards suggests -- or vice versa. Amica started by accepting e-payments first, then expanded to allow customers to view their bills online.
Interestingly, his company receives more e-payments online than it sends out e-bills.
"Some customers like to get the paper bill, but when it comes time to pay they go online," he said.
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