Electronic bill presentation has been slow to take off, especially in the public sector. But signs indicate it may finally be ready to get off the ground. Segments of the private sector have begun to embrace the concept, and the U.S. Postal Service recently unveiled an electronic bill delivery and payment service that could help pave the way for state and local governments to follow.
Not far behind is the state of Washington, which has targeted electronic bill presentation as a goal for more than a year. The state hopes to implement the technology and take advantage of the benefits, which include cost savings and a better level of service for businesses and citizens.
"I think the marketplace is much more ready to accept this now than it would have been a couple of years ago," said Linda Jo Demery, strategic initiatives project manager of the Washington Department of Information Services (DIS).
Electronic bill presentment involves presenting the summary and details of a bill over the Internet instead of mailing a paper version. Although electronic bill payment via automatic debits and credits has become more common, electronic bill presentment has been more difficult to implement.
Part of the problem has been consumer adoption and the issues surrounding privacy and accuracy. The other problem was software. Although it is now easier to find vendors who offer the software, consumers are generally still wary of both electronic bill presentment and payment.
Brian Valente, vice president of marketing for Avolent Inc., an electronic bill presentment and payment (EBPP) solutions provider, claims that one of the reasons online bill presentment is more prevalent in the private sector is because the private sector is more confident in the security of the technology. "People who understand the technology recognize its incredibly secure and in many ways more secure than the way they receive paper invoices today," Valente said.
The private sector, namely insurance, telco, credit, lending and utility companies, is pushing the electronic bill presentment issue. According to John Murphy, vice president of product marketing for Mobius Management Systems, the immediate benefit is the establishment of an interactive electronic relationship with customers.
"There hasnt been the rapid adoption that people expected," Murphy said. "Nevertheless, 50 percent of the large billers have already implemented or are implementing an electronic presentment and payment strategy. Theyre doing it now because its part of an overall customer relationship management strategy. They want customers to come to their Web site."
Murphy said that strategy could pay off in cost savings down the road when consumers decide they dont need their paper bills any longer.
According to a Gartner Group study, the cost to insurance, telco, credit, lending and utility companies to present a paper bill is 93 cents. The same bill delivery without paper would save 50 of those 93 cents.
"Additionally, on the payment side, if you could take an electronic payment over the Internet and not deal with a paper bill, the savings would be on the order of 17 to 20 cents," Murphy said. "With 19 billion recurring bills, youve got a $9.5 billion market immediately."
That kind of cost savings is what helped start a wave of enthusiasm for online bill presentment 24 months ago. But misjudgment of consumer readiness and the lack of available software served to stall progress.
"It is becoming more concrete now," Demery said. "Now we are able to download real application program interfaces. It is becoming more production-ready."
Demery said that nearly two years ago when Washingtons DIS began experimenting with electronic bill presentment, it was difficult to get credible software tools. "[Now] there are several vendors that are out there doing these kinds of things."