The Internet is playing an ever-increasing role in people's everyday life. One such example is the growing emergence of Internet billing. This facility is rapidly transforming the way regular payments are managed and processed.
"The key driver for e-billing is convenience as consumers are able to receive and pay bills online," says Heath Turner, Sales and Marketing Manager of The E-mail Corporation in Johannesburg.
"This ease of use has many advantages. It generates more efficient and cost-effective transactions and offers billers a more targeted marketing medium. In addition, because people pay bills more frequently, the e-bill is likely to become an interactive entry point for a host of additional services."
The three models
E-billing can be conducted in three ways: via direct billing, thin consolidation or thick consolidation.
In the direct billing model, the consumer deals directly with the biller. The main disadvantage of this model is that consumers have to visit multiple websites to pay their bills.
The consolidator model overcomes this problem by providing a central site for consolidating and managing all of a consumer's bills.
"Evidence from the United States indicates that customers are reluctant to hop from one website to another," says Mike Wright, CEO of The E-mail Corporation in Johannesburg. "This strongly suggest that bill consolidation will increasingly become a key component of any electronic bill presentment and payment (EBPP) service."
The Gartner Group's research indicates that by 2004, as the EBPP network and technologies mature, direct billing models will no longer be the most popular. They estimate a projected 15 million customer base for direct billing, while 25 million will prefer to access all their bills in one place.
Direct Billing
Customers can view and pay bills directly on a biller's website. Customers log on to the site to access their information and initiate payment.
"This model is currently the most popular method for e-billing, " says Monique Venter, Strategic Business Manager of The E-mail Corporation. "It allows for full control over the customer relationship, including marketing, cross-selling and integrated customer care services. "
The main disadvantage of this model is the significant costs associated with maintaining a full-service e-billing solution. The biller is responsible for acquiring, customising and maintaining the infrastructure through which the invoices or statements are presented. This includes the application software, hardware and firewalls. The biller must also build the application and infrastructure to let customers access and pay bills online, or contract with a service provider to do it.
Thick Consolidation
In the thick consolidator model, the biller send all billing information to a consolidator for posting on a third-party website. The retailer therefore relinquishes all control of the customer billing process.
"The thick consolidator model has the advantage of convenience," says Venter. "Many customers like the idea that they can receive and pay their bills in one place. Billers are also attracted to this model as the entire process is outsourced."
The model does have certain disadvantages. Billers lose direct contact with their customers and therefore lose marketing opportunities and the platform from which to further develop their brand.
Thin Consolidation
The thin consolidator model provides very basic information, so that customers can simply "click and pay" their bills from a third-party site. More detailed inquiries, such as account queries etc, are automatically punted back to the retailers site or call centre.
"Thin consolidation provides a highly convenient service for summary view and bill payment," says Venter. "Billers find this model attractive as customers will continue to visit their website in order to view more detailed data."
This models' drawback is that billers may need to modify their billing systems to provide summary data to the consolidator and detailed data to their website.
The E-mail option
The above models represent a "pull' approach whereby customers are "pulled' to a site. E-mail provides the opportunity for a "push" approach whereby the information is "pushed" to the customer.
"E-mail presentation requires no action on behalf of the customer," says Venter. "Bills are generated by the EBPP software and delivered to the customer's inbox via e-mail. The customer has no need to access a variety of websites in order to view his invoice or statement."
This method is highly effective as it allows for marketing opportunities and frequent interactions between the biller and the customer. In addition, e-mail can be used in conjunction with direct billing, thin consolidation and thick consolidation.
Killen and Associates has predicted a dramatic shift in the EBPP delivery landscape during the next five years. During that time, Website solutions will decline from 61% to 38% of the market, while e-mail based delivery will increase from 18% to 40% of the total market.
"Within the rapidly evolving field of EBPP, e-mail based solutions are likely to gain substantial popularity because of their low cost, ease of implementation, and customer satisfaction," says Wright. "Billers should always look for technologies that scale to their own goals, but which also adapt to the current and future needs of their customers. E-mail based approaches clearly adhere to these goals."
Future Direction
"To cost effectively manage an increasingly demanding customer base, companies must find new ways to respond to consumer needs," says Wright. "EBPP allows billers to improve the level of service they offer, at a cost they can afford."
EBPP will also provide consumers with a great deal more than invoice and statement information. As technology advances, EBPP will allow companies and customers the opportunity of interacting on a one-to-one level. This will give customers access to detailed account information at the touch of a button, while billers will gain access to a new avenue of dialogue with their customers.
Share