Six years after information technology pundits dubbed
electronic bill payment and presentment the "next
killer app" of the Internet, the industry is still
wrestling with the fundamental "chicken and egg"
conundrum that has stifled the growth of consumer adoption
as billers, banks and aggregators compete to be the
provider of choice for online presentment and payment.
Six years later the same questions remain unanswered—bank
or biller? biller direct or bill consolidation site?—and
consumer acceptance of online presentment remains in
the low single digits. The stakeholders may have different
approaches and different motivations – banks want
to keep the revenue they make from payment processing,
especially as they see less revenue from consumer check
processing fees. Consumer Internet service providers—the
Yahoos, the AOLs—want to provide a valuable consumer
service on their home pages to drive advertising dollars.
And
while reduced paper and postage costs are still the
main driver for billers, they also want EBPP to drive
consumers to their websites for their cross selling
and up-selling opportunities. EBPP is more and more
being looked at as good CRM, and online customer service
and self-service promise significant reductions in call
center costs.
Only
one key constituency has yet to calculate a strong value
proposition for itself: the consumer. And clearly, without
them this whole thing goes nowhere.
For
better or worse, people still enjoy getting the mail,
even though at this point in time it mostly consists
of "junk mail" or bills. More significantly,
consumers have basically accepted the current direction
of the industry—more and more consumers prefer
to receive and view their bills in paper even if they
pay them online. That is why online payment is enjoying
double-digit adoption rates while online presentment
has languished at 2% to 5%. There’s no ROI for
billers without paper and postage suppression. So where’s
the beef?
Pitney
Bowes jumped into the EBPP fray fairly early on, as
several utilities, service bureaus and insurers using
their paper bill processing software and equipment wanted
to add EBPP in the late 1990s as an additional channel
for early adopters in their customer base. The 83-year
old mail and messaging giant made a key investment a
few years back when it purchased Alysis Technologies
for its top-rated D3 EBPP technology. Pitney Bowes continues
to add billers to its customer list but perhaps more
importantly, took it upon itself to study consumer behavior
with regard to bill payment in an effort to resolve
the chicken and egg riddle.
A
team of researchers visited over one hundred homes to
observe people going about the act of receiving and
paying paper and electronic bills in order to identify
pain points, understand the workflow within the home
and better understand the bill paying habits of the
American public to see why adoption of EBPP hasn’t
taken off. The team interviewed thousands of people
on the telephone and at shopping malls in order to gain
insight into their desires and their fears about EBPP.
Pitney
Bowes says that the findings of this project may lead
it to re-invent EBPP at some point in the near future.
For now though, some of the insights may prove helpful
to billers looking to make the most of their EBPP investments.
Consumers
identified control, privacy, organization and expediency
as the main factors in their bill view and pay process.
They want to maintain control of the payment process,
rather than turn to auto-pay and direct debit models.
In order to maintain a measure of privacy, they want
to keep banks and billers from sharing too much information
about them with one another. They don’t want banks
to see their payment history, for example, or to know
that they once missed a phone bill payment and received
a dunning notice or had their service interrupted.
In
terms of organization, consumers want to keep the process
orderly and to have the electronic presentment and payment
process closely aligned with how they view, pay and
store their paper bills. They want more convenience,
of course, but more than anything else, they don’t
want to pay for the service.
Household
management is all about trying to reduce unexpected
events. The workflow is familiar to everyone—going
to the mailbox, bringing in and opening the envelopes,
evaluating and cataloging bills in terms of action needed,
placing the bills that don’t require immediate
action in a secure but obvious location so that, despite
the resultant clutter, they have a reliable reminder
of their need to pay a bill.
People
like to identify simple action triggers for each bill
that help them decide when to make a payment. Paying
the bill and storing the bill are last but obviously
important steps in the process.
Consumers
say that anything that adds on to that process without
adding value to it —whether it is the payment
of a few bills online or an additional fee for that
service -- will continue to result in rejection. The
question is how to add that value without creating more
problems, which is what Pitney Bowes will be looking
into as the year progresses. So stay tuned and visit
pb.com for more articles about the future of EBPP.
Analyst
Reports