InformationWeek

October 23, 2000

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Online Bill Payment: Ready To Break Through?

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More on online bill payment:

Network Computing: Handling electronic bill payments (09/18/00)

Network Computing: EBPP providers jockey for big payoff (09/18/00)

TechWeb Finance: Paytrust to mergewith PayMyBills.com (08/22/00)

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"We evaluated online bill presentment and payment from an operational standpoint and from a marketing, sales-generating, and customer-service standpoint," says Mike Rogers, Saks' senior VP of credit. "The operational savings alone were enough to justify pursuing an online bill presentment and payment strategy.''

Saks is turning its billing initiative into a springboard for interactive customer service and targeted marketing. "The big benefit will be the marketing element," Rogers says. "We can use presentation and marketing information tailored to the individual."

Once Saks' online bill-payment operation is running, customers will be able to access their Saks bill online. "You can go for whatever statement type you want," Rogers says. "We're going to make it better-looking than our paper statement." More interactive, too: Customers can launch queries about their bills, clicking online items and reaching a customer-service representative by E-mail or live chat.

Customer-service reps also will be able to access the system and look at what the customer is seeing online, Rogers says. A demand marketing function built into eDoc's BillDirect offering lets billers send targeted offers directly to a particular user.

According to eDocs VP of marketing Ted Morgan, BillDirect gives billers the opportunity to turn the billing process into a revenue-generating operation. Saks expects to recoup its investment in two years, Rogers says.

Mike Rogers Bill presentment along the lines of what Saks plans to offer hasn't worked well with existing bill-payment systems because they haven't integrated well with back-end systems. As a result, presenting bills online to some has simply meant scraping information from billers' statements or scanning in those statements, creating a more static format. But products such as eDocs' BillDirect are designed to work with legacy billing systems, existing relational database management systems, a variety of E-mail systems, and customer-care systems.

BillDirect, built on a three-tier client-server architecture, wraps billing and customer care into a single package, bought off the shelf. That out-of-the-box approach is what attracted Saks to BillDirect, Rogers says.

EDocs has taken great care to shape the system into a complete offering that provides extraction and storage components, customer care, management and tracking, content reformatting, and security features such as authentication and encryption. EDocs also has made BillDirect work with bill consolidators' systems. Billers can send summary and detailed information to players such as Princeton eCom and CheckFree, using whatever format the consolidator specifies.

BillDirect has attracted other billers such as American Express, which has offered customers the ability to view billing detail online, says Andy Mentis, American Express' VP of interactive capabilities.

American Express is using online bill payment and presentment to expand relationships with customers. But presentment has to go well beyond screen scraping; otherwise, the data doesn't change rapidly enough to accommodate rapidly changing information that appears on consumers' bills.

Many industry advocates say that some of the online bill-payment woes will dissipate--and that features such as presentment will advance if anyone can break CheckFree's dominance of the market. While CheckFree aggressively pursues new avenues, it's bumping up against the perception that its actions have kept online bill payment pricey, complicated, and more manual than it has to be.

Many of the CheckFree transactions aren't electronic end-to-end. According to Deutsche Banc Alex. Brown, Princeton eCom is in position to edge past CheckFree because it offers an end-to-end package that's compatible with most billers and bill distributors and lets them share billing information more easily.