E-billing: What are the obstacles?

SA presents the perfect `nursery` conditions for electronic bill presentation and payment: a competitive and consolidated banking environment, a small but demanding and adventurous Internet community, and a select group of mass consumer billers. Put these factors together, and SA should be leading the world in the migration onto electronic billing and payment. So, what is holding us back?

E-billing is attempting to replace a process that may not always be efficient, but is culturally accepted.

Alison Wright, sales and marketing director, The E-mail Corporation

South African billers have been interested, but cautious, when approaching e-billing. This caution is due to a number of factors, some of which are explored below.

Technology can be perceived as a barrier to implementation for companies concerned about start-up expenses and the ongoing fees involved in online delivery. As is typical with technology solutions, the applications required (to convert mainframe data and produce and send the electronic bills) range in cost and complexity from the reasonable to the ludicrously expensive.

Technology cost as a barrier will be overcome once the business has completed a business case that illustrates the potential cost savings achieved through implementing an electronic delivery and payment solution. The big cost savings come when the organisation has the `chutzpah` to discontinue the `print and post` paper channel.

However, even once the business case proves the channel`s attractiveness, further obstacles could delay the project. One of the largest barriers relates to data. Traditional billing processes require only the customers` postal addresses to be captured and updated. Electronic billing requires additional sets of data that the organisation may not already have, such as e-mail addresses, and usernames and passwords for online authentication. This is often the most daunting task - how does an organisation contact all its customers to get their e-mail addresses?

Following on from the data issue, is the requirement that no matter what technology is selected to enable e-billing - there are processes within the organisation that will have to be changed or developed to support this new offering. Questions such as: how to enrol customers for electronic delivery and how to gain permission from customers to migrate them from printed statements to electronic - must be asked and answered.

Security is always top of mind when changing to an electronic channel, especially one that utilises the Internet. Strangely, organisations seem to place far stricter security requirements onto the electronic channel than were ever present in the traditional channel. For example, it`s acceptable for the print and post channel to produce absolutely no feedback to the organisation with regards to the successful delivery of statements. Migrate to the electronic channel, however, and the expectations of reporting capabilities are sky high. Fortunately, the electronic channel can meet these elevated standards.

Businesses are also concerned about how their customers will respond to e-billing. They argue that customers are comfortable with receiving bills through the post and then paying via cheque, credit card or direct transfer. E-billing is attempting to replace a process that may not always be efficient, but is culturally accepted.

Companies have also made the mistake of adopting a `if you bill it, they will come` strategy. They have now found that they need to market the program and educate the consumer - through inserts in paper bills, direct marketing and mass mailings. Lack of awareness and understanding about e-billing programs is a major reason why more customers have not been participating.

Organisations have also not provided an incentive to customers to migrate, or at least a disincentive to stay with the traditional channels. If it costs less for the business to present billing electronically, then offering the customer a slice of that cost saving will certainly encourage buy-in to the electronic channel.

In many cases, it is a matter of "Rather the devil you know than the devil you don`t". Although we continually berate our postal system, our mail-based billing system works pretty well for most people. We`re used to it. We know how it works. We are reluctant to change.

Customers also have security concerns about receiving confidential billing information and paying online. Unless they have already made the move to online banking, and have since become comfortable with the process, some customers will view the paying of bills online with hesitation.

The South African business community often looks to the banks to be the early adopters of new processes like e-billing.

The good news is that local banks are investing in the "presentment" aspect of EBPP. Those with developed Internet banking channels are able to present statements to customers via their Internet banking pages, with maybe an e-mail prompt indicating that the statement is now online.

Standard Bank recently became the first bank in SA to offer its clients the option of receiving certain statements via an encrypted e-mail attachment. Many other South African financial institutions are in the process of either investigating or implementing the option of delivering statements and invoices to clients via an encrypted e-mail attachment.

While everybody isn`t doing it yet, when the perceived leadership organisations make a firm commitment to a process like e-billing, it`s the key step toward general adoption. And as the high profile organisations begin to show real value gained, and successful achievement of their e-billing objectives, the momentum will pick up and e-billing will fly.