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November 22, 1999

Electronic Billing:
Electronic Billing Made Simpler
E-billing has become more than a way for businesses to cut cost--it offers a new way to reach customers, add value, and increase revenue. Billing service providers and bill consolidators offer help for companies that want to unload some of the heavy lifting or extend their reach.

By Jeetu Patel, Pat Turocy, and Joe Fenner

Related links:

New Concept For Electronic Billing

Billing's Unfulfilled Potential

More Companies Try E-Billing
lectronic billing is here to stay. Implementations are finally catching up with the hype as major billers start to roll out real solutions for online bill presentment and payment over the Web--whether on their own or through outside service providers.

Although adoption has been slower than most analysts predicted a year or two ago, the horizon is brighter today. One big reason: Billers are looking at E-billing as a strategic application for reaching customers, rather than as an operational expense-saver.

When E-billing or electronic bill presentment and payment first burst on the scene, vendors and service providers touted the huge savings on print and mail costs. But with customer adoption lagging, billers quickly realized that their print volumes weren't going to drop anytime soon. The real value of E-billing is its ability to reach customers, provide them with value-added services, and capture additional revenue. From this standpoint, E-billing can be a strategic component of most companies' larger E-commerce and customer-relationship management initiatives.

If you're a biller that wants to get into the E-billing market, you have a number of options. You can always use commercially available software and your own IT resources to build and maintain the E-billing system you need. Or you can work with an outside biller service provider or host to handle some or all of the processing for you--whether building a solution at your site or hosting the entire application in an outside data center.

The bill-presentment model you use is also a major consideration. In the biller-direct model, you host your own billing site, which gives you total control over the process and allows you complete freedom in using the bills for branding, target marketing, cross-selling, and up-selling your customers. However, the biller-direct approach also requires billers to visit your site to view and pay their bills--which is cumbersome for users with dozens of bills to pay.

You may instead want to work with a bill consolidator, such as TransPoint LLC or CheckFree Corp., which aggregates multiple bills in one location to streamline things for payers. Or you may want to make sure that your bills are available through consumer service providers such as Yahoo and America Online, giving your customers the freedom to access their bills through whatever distribution channel they choose. While such approaches may broaden your reach, you may be giving away branding and marketing opportunities.

With so many options and vendors in the E-billing market today, billers are rightly confused over which vendors offer services that are in line with their strategies. With this in mind, we've conducted an ongoing series of evaluations of the major software products, consolidators, and billing service providers in the E-billing market. Compared with a year ago (InformationWeek, Nov. 30, 1998), we're starting to see real maturation of the products and services available for E-billing.

In this article, we'll take a look at the billing service providers and consolidators we evaluated this time around. These vendors offer solutions that make sense for companies that want to offload some or all of the heavy lifting, or want to extend their reach to customers. Next week, we'll look at the software products billers can use to build and maintain their own E-billing offerings.

Billing service providers have been around for years in the print-billing world. Providers that offer E-billing services let companies outsource the entire operation in the same way they might outsource their paper-billing operations. Most will handle the up-front data extraction and conversion for you. Some will return the data for you to host yourself, others will host the data for you, and still others will send the data to the distribution points of your choice.

When thinking of billing service providers, most companies think of traditional print and mail service providers such as Bell & Howell, OTS (formerly IBS), and Pitney Bowes. All of these companies offer E-billing services, providing an attractive migration or add-on that their existing customers can leverage. All three came through our previous evaluation and offer sound strategies for their customers.

But the Web has also spawned a new breed of billing service providers that are pure Internet plays, offering E-billing services only. We evaluated two such providers: Billserv.com Inc. and Princeton eCom Corp. Both companies offer value, but they have the challenge of competing against the established providers, which are major players with established customer bases.

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