InformationWeek

November 30, 1998

Electronic Billing: Postage Due

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TransPoint consolidates bills from multiple billers at a central site, enabling consumers to pay all of their bills at one site. TransPoint hosts all billing data at a central data center. To work with TransPoint, billers must use the company's Biller Integration System (BIS) to provide the billing data to the TransPoint data center. TransPoint provides billers the option of hosting detail data at their site or at the data center.

TransPoint provides several options for presentment. A consumer can log on to a TransPoint-branded site, from which the individual can get all bills (assuming TransPoint has consolidation agreements with all of the customer's billers). Or, TransPoint will allow banks and financial institutions to act as a consumer-service provider for customers. Thus, a bank can act as the distributor for billing data that TransPoint hosts, and the bank can brand the site as its own. TransPoint can interact with portal service providers (such as Yahoo) in much the same fashion.

TransPoint collects a charge for every transaction conducted through its service. As a value-added service, TransPoint customers receive customer self-help services, both online as well as via telephone. If the customer inquiries are content-related, TransPoint will redirect the call to the biller's customer-service department.

TransPoint's technology is extremely strong. We used the system to run through the entire end-to-end billing process, and were impressed with the comprehensiveness of the offering.

Overall, TransPoint provides a strong solution for business-to-consumer billing transactions, but it's not heavily focused on business-to-business transactions at this time. While TransPoint may move in this direction in the future, large organizations that want to do business-to-business electronic billing in the near term should look elsewhere.

While TransPoint allows for biller branding on its site, which includes displaying logos, custom layouts, and other visual elements, it does not provide a biller-branded outsourcing solution. This simply means that customers who want to access, for example, their AmeriPhone bill could only do so by first going to the TransPoint Web site. The biller's customers have no direct route to the biller. However, TransPoint does allow for fully-branded sites for aggregators such as financial institutions or Web portals. This feature is critical to banks where branding is a key element in attracting and retaining customers; consequently, it's also a key to TransPoint's success in EBPP.

Putting It All Together
Because the market is still so new, it can be difficult to tell who's who. More important, how can you decide which parts of the process you want to control and manage, and which parts should be left to outsiders?

The first step is to take a close look at your operation and devise a corporate strategy for EBPP. The key things to remember are:

If you want to electronically deliver bills to customers yourself, you'll need the technology to support the process. And you'll need to integrate the Web-based front-ends with your line-of-business system--and with your bank.
If you go with a consolidator or service bureau, you can relieve yourself of many of the headaches associated with deploying and maintaining a production-level EBPP operation. However, you may be giving up a huge opportunity for branding and direct one-to-one marketing.
Whichever approach you go with, remember that your EBPP system has to be as reliable and as accurate as paper--or your customers won't use it.

While some analysts claim that the electronic billing market is booming, the reality is that adoption has been somewhat slower than expected. The fact that some vendors still have immature products or poorly-defined strategies hasn't helped, nor has the market confusion about how to implement EBPP.

On the bright side, some vendors do offer real technology and real solutions. The market is beginning to mature, and the vendors are forming their relationships and alliances.

In addition, customers are beginning to understand the differences between the biller-direct model and the consolidator model, both of which will continue to co-exist in the near-term. But if one model becomes dominant, sorting out the players in the market will become far easier for billers.

Perhaps the best news of all for the emerging EBPP market is the fact that Microsoft has jumped into the fight with its TransPoint offering. Microsoft's entry instantly legitimizes the market, creates new interest, and ultimately accelerates market growth.

Jeetu Patel is VP of research and Gautam Desai and Jay Bromberek are analysts with Doculabs, an independent research and advisory firm. They can be reached at info@doculabs.com. The company's Web address is www.doculabs.com. Jason Levitt is a senior technology editor for InformationWeek.

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