There is no doubt that Electronic Bill Presentation and Payment is poised to explode into the e-commerce arena. Billing is an integral component of commerce and moving this online introduces an exciting e-commerce application that offers significant savings and improved customer service.
What is EBPP?
EBPP is the electronic presentation of invoices and statements, and the corresponding payment for goods or services. In other words, a paperless system for sending bills and returning payment electronically.
In today's society, the majority of invoices and statements are mailed using paper-based systems. Killen and Associates, a leading consultancy for e-billing, estimates that there are 18 billion bills sent per year in the US alone, and that by 2005, some 70% of bills could be presented electronically, resulting in an annual saving of $750 million.
The Gartner Group predicts that in the USA, by 2002, on-line households will be receiving at least 8 electronic bills per month.
In a recent survey conducted by PricewaterhouseCoopers, amongst 100 leading high volume US billers, 97% of the respondents indicated that they currently offer or are planning to offer EBPP. Approximately 32% of respondents currently offer their clients EBPP options and 65% plan to offer this option to their clients within one year.
In South Africa, the statistics are not as high, but a project conducted by The E-mail Corporation estimates the potential for electronic billing in South Africa at over 5 million bills per month, representing over R15 billion.
Who benefits from EBPP?
A major factor in the move towards this paperless billing society is the significant reduction in cost.
Mike Wright, CEO of The E-mail Corporation says that "it costs up to R7 to generate and distribute a paper-based statement, and by sending that same statement electronically, billers can reduce their costs by up to 90%."
This saving alone is the key justification for electronic billing.
For many companies, an invoice is the most frequent and regular form of communication with customers. Wright believes that electronic billing offers a powerful marketing platform that allows for targeted marketing messages to be included in each mail. Billing is thus transformed into a dynamic, personalised and strategic point of customer contact.
The introduction of EBPP also results in a reduction in telephonic based customer service due to the self- service nature of the on-line environment. It reduces customer care costs by providing anytime, anywhere access to electronic account management functionality.
Additional benefits include: a reduction in debtors days as a result of a significantly faster bill payment cycle; a decrease in expenses related to payment errors; and the competitive advantage companies gain from enhancing customer loyalty and satisfaction.
Payees, both consumers and businesses, can derive some economic benefit from EBPP, but most value it because it is highly convenient. They can pay bills electronically while taking full advantage of the possibilities of the Internet to consolidate their bills and access their accounts in a private and secure fashion.
What options are available to a company or financial institution with regard to EBPP?
There are three main flavours of EBPP:
Web-based billing involves bill presentment on a company website. Customers log onto the site to access their statements and initiate payment. This model allows billers to maintain control over both the information customers can see and over all transactions. In addition, they can use their site to market products and services to the customer. "This approach is, however, not favoured by customers who find the service cumbersome," says Monique Venter, Strategic Business Manager of The E-mail Corporation. "Currently, only between 20 - 45% of customers access their on-line bills."
Bill Consolidation involves a third party handling the billing process for multiple billers within a single environment or web site. The upside of this approach is that consolidators allow customers their bill summaries without having to access multiple web sites.
E-mail Presentment is a system whereby bills are securely delivered directly to a customer's e-mail address. This method is highly convenient for customers who do not have to access a website as invoices appear directly in their inbox.
Overview of Benefits
Benefits to the Customer
1) Customers save on the cost of cheques, postage and envelopes
2) Customers are able to review their bills and make payments 24 hours a day.
3) Customers enjoy the immediate delivery of invoices, allowing them the satisfaction of being up-to-date with their finances.
4) Customers are able to centralise and streamline all bill payment functions and storage on their computer.
5) Customers have control over the timing and amount of each payment.
6) Customers enjoy the simplicity of the bill payment process.
7) Customers are able to request statements relating to previous accounts at any time.
Benefits to the Biller
1) Billers experience significant cost savings as a result of a reduction in billing and payment processing expenses.
2) Billers enjoy the 1-to-1 marketing opportunities EBPP provides.
3) Invoices are delivered immediately thereby reducing debtors days and facilitating a faster payment cycle.
4) EBPP proves receipt of invoices by clients thereby reducing disputes focussed on the communication of debts.
5) Customer service is improved, improving customer satisfaction and loyalty.
6) Billers are able to differentiate their service, providing them with a competitive edge in a highly competitive market.
7) Billers can draw customers to their web sites thereby allowing for marketing opportunities.
In conclusion, EBPP offers organisations an opportunity to sustain business growth and competitiveness, to improve customer service, increase revenues and decrease costs. Electronic statement delivery is set to play a crucial role in the future of business communication, and first movers within this arena will have a highly competitive advantage.
Share
Editorial contacts