November 22, 1999

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Electronic Billing:
Electronic Billing Made Simpler
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New Concept For Electronic Billing Billing's Unfulfilled Potential More Companies Try E-Billing

TransPoint
The TransPoint offering, Internet Bill Delivery and Payment, is designed to function as a true consolidator. TransPoint accepts bills from a variety of sources, including billers and billing service providers. TransPoint will present these bills through consumer service providers that use TransPoint as a consolidator or through TransPoint's own consolidation site.

Billers use TransPoint's Biller Integration Server as a conduit to provide billing data and enrollment data to TransPoint's data center. TransPoint provides billers the option of hosting detail data at their own site or at the TransPoint data center.

TransPoint's key opportunity for success is its comprehensive end-to-end solution for handling the entire E-bill- ing life cycle, and the strong backing and market presence of its investors. In addition, TransPoint's services and technology are sound, and availability through MSN.com should eventually help it gain traction in the market.

However, the service still lacks pay-anyone capabilities, business-to-business capabilities, and support for credit-card payments. TransPoint says it's competing more directly with the U.S. Postal Service than with CheckFree.

For billers, capturing a critical mass of consumers is still the ultimate challenge of E-billing. Interestingly, in many cases consumers are showing a willingness to pay bills online if the process is simple and convenient, and they are even willing to pay for it--for now, at least.

Proving this theory is the recent emergence of consumer-focused consolidators such as CyberBills (with its StatusFactory.com service), PayMyBills.com, and Secure Commerce Services (with its PayTrust service). Consumers have their bills (electronic or paper) sent to the consolidator, where the pages are scanned and made available over the Web. Though the approach seems low-tech, it lets the consumer-focused consolidators aggregate all of a consumer's bills in one place--a clear difference from biller-focused consolidators that have been slow to build significant rosters of billers.

Consumer-oriented consolidators are focused on providing the kinds of features customers want, including personal financial-management capabilities. These sites are attractive to billers because they provide access to a quantifiable market of consumers. The consolidator handles payments based on customer specifications and resolves the payment with the biller by whatever means the biller will accept. Consumers typically pay a fee associated with the number of bills presented or the number of transactions made per month. Expect the consumer-focused consolidators to remain a viable channel for E-billing, at least in the near term.

Other emerging channels for E-billing include consumer portals and consumer service providers. Sites such as AOL, Excite, and Yahoo attract lots of user traffic. Portal providers see E-billing as a value-added service that can help generate even more traffic. Likewise, portals are an appealing distribution alternative for billers, because of the sheer volume of traffic that consumer portals attract.

For billers, the bottom line is the ability to reach customers by whatever means possible. While working through multiple distribution partners may lower a biller's opportunities for branding and advanced personalization, it's the key to building a critical mass of customers for E-billing. At this stage of the market's evolution, that's a big hurdle for most billers to overcome.

Jeetu Patel is VP of research, Pat Turocy is a senior analyst, and Joe Fenner is a senior technical writer with Doculabs, a technology advisory firm. Doculabs can be reached at info@doculabs.com.

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