InformationWeek
Defining The Business Value Of Technology
April 5, 1999
Billing MiddlemanStartup sends data, handles connections
By Gregory Dalton
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he growing interest in electronic bill presentment and payment has created a market for service companies offering to mediate between companies--particularly small and midsize firms--and online billing fulfillment companies. Among the newest is Billserv.com, a startup service bureau for midsize companies seeking to outsource their online billing operations.Billserv.com, which was founded last July, is marketing its eServ service to regional utilities, telcos, and other companies that send monthly bills or statements to customers and want to begin presenting them on the Internet. Billserv receives the print data that billers send to their printers, extracts summaries of the data, and forwards the information to CheckFree Corp., the leading consolidator of bills that allows consumers to view and pay invoices at its Web site. Customers' payments are routed back through Billserv.com to the original billing company. Billserv also hosts detailed billing data that customers can access.
Last week, Billserv.com signed up San Antonio Water System, which will start an internal test of eServ in the next few weeks and expects to make online bills available to its 280,000 customers within six months. Greg Flowers, director of IS at San Antonio Water, says it costs about $1.10 to print, mail, and process a bill. "We can get that cost down to 50 cents to 60 cents" by moving to the Internet, he says.
The utility could have entered online billing by sending its data directly to CheckFree or another consolidator. But connecting to such consolidators typically requires a significant upfront investment in legacy-to-Web technology, while going through an intermediary such as Billserv allows the company to pay per transaction.
Connecting to several consolidators also requires an IT manager to establish and manage separate connections to each service firm. Flowers decided it would be easier to manage just one connection to an intermediary such as Billserv.com. "They take care of segregating the data and sending it to various providers," says Flowers.
That approach can have limitations when the service bureau isn't plugged in to all the players. For example, Billserv.com doesn't have a relationship to pass bills to Transpoint, the online bill consolidator owned by Microsoft, First Data, and Citigroup. Transpoint has signed up many companies to test its forthcoming service and is expected to be a major venue for bill presentment. David Jones, Billserv.com's senior VP of business development, says the company would like to send bills to Transpoint but hasn't negotiated a deal to do so.
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