Summary:
Kenny Hargis examines the evolution of electronic
bill presentment and payment and considers
what the future holds for this increasingly
popular technology.
The Internet continues to become more pervasive,
seeping into the many facets of life. In the
financial sector, this fact is perhaps most
evident in the rise of electronic bill presentment
and payment (EBPP) capabilities. Three quarters
of all bills are still being paid via the
paper format, but the increased use of EBPP
in recent years is dramatic. Adoption rates
of the technology continue to increase, and,
as the younger generations become active participants
in all things financial, those rates could
skyrocket before long.
But first, to understand where EBPP is going
and why it is important for all financial
institutions to at least begin considering
this technology, an examination of the technology’s
evolution would be helpful.
EBPP: A brief history
The story of EBPP begins a few years ago during
the late 1990s, a time when many in the technology
industry were heady with success. In a number
of markets, new technologies were being developed
and introduced at a maddening pace. It was
no different for the financial services print
and mail industry.
Document service providers were flush with
success and ready to make the technological
adjustments that would propel them into
the 21st century. With analysts predicting
that paper-based billing would disappear
within a few years, document service providers
diligently went about the process of developing
electronic billing systems. Some companies
jumped in head first, spending millions
of dollars to roll out such systems. Many
believed the reason they were spending those
millions of dollars was to prepare them
for ‘the future’.
As it turned out, ‘the future’
wasn’t all it was cracked up to be.
Because so many of the early EBPP systems
didn’t work properly or offered only
part of what they promised, it was easy
for customers to decide against using them.
When faced with the reality of viewing
and paying their bills online, most customers
balked, opting instead to stick with what
they’d always known. “Paper billing
might not be perfect,” they thought,
“but at least I’ll have something
to hold in my hand. Plus, I won’t have
to learn how to use some complicated Internet
site.”
It’s hard to blame the customers for
coming to such a decision. Those early EBPP
systems really did lack the functionality
and flexibility of those available today.
Ultimately, because the customers weren’t
interested enough in EBPP in the late 90s,
the technology went into a kind of hibernation.
Companies that had banked their future on
EBPP would have to wait (if they had enough
capital to stay open – or if they had
another line of business). Many of them
didn’t make it, and the ones that did
were forced to take a hard look at EBPP
and figure out a way to make lemonade out
of lemons.
EBPP’s first re-emergence
Early on, a few companies with strong EBPP
infrastructure realized that they didn’t
have to wait around on the public to be
comfortable with the technology. In fact,
these companies knew that if they played
their cards right, they could start the
process of helping people become used to
the technology. They began with customer
service representatives (CSRs).
This early re-emergence of the technology
featured only the presentment, and not payment,
but it was effective then and continues
to be so now. The application enables CSRs
to review electronic representations of
bills or other information mailed to customers.
The technology that had been built for presentment
and payment made it possible for document
service providers to create digital versions
of bills and information that were the same
as the paper-based versions.
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