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News Analysis

Fortnightly Magazine - September 15 1999

Corp., which has provided EBPP services to utilities and other billers since 1997, bills itself as the first and largest player. The Atlanta, Ga.-based company processed 13,000 electronic bills in June alone. It has electronic billing contracts with at least 16 energy companies, including American Electric Power, GPU Energy, Portland General Electric, Southern California Edison and Southern Co.

Furthermore, noted CheckFree spokeswoman Laurinda Wilson, there are differences between the two services: "TransPoint's service is what CheckFree launched in March 1997." And this fall, she said, the company will launch the third version of its service with new features including dynamic summary and customer magnets.

Dynamic summary allows customers to calculate their monthly accounts payable. For instance, Wilson said, "A utility might want to reward online customers. It could offer them a $5 discount to do self meter reading." The billing software then could calculate the bill and the customer would pay the precise amount owed.

Customer magnets, she explained, would allow a utility to target customer groups for special promotions or other reasons based on certain parameters. For instance, utilities could arrange a screen pop-up advertising a budget-billing program for customers with high winter heating bills.

"For consumers, you're giving them something that's targeted for them and automatic," said Wilson. "Then you're billing process becomes relationship-building."

But TransPoint's Russell Henn, vice president of sales to utilities, sees his company's recent entry into EBPP as an edge.

"CheckFree has been on the payment side only, so bill presentment is fairly new to them as well," he noted. "In a lot of ways, we have the advantage of coming in as a newcomer, identifying what's not working and designing a system that improves upon industry models."

But how receptive are customers to paying one or two bills online and the rest by snail mail? As of August, TransPoint and CheckFree had electronic billing contracts with approximately 37 and 64 companies, respectively - a tiny proportion of the thousands of billers consumers interact with monthly. What about paying bills to the paper boy, the babysitter or the dentist?

In recognition of this obstacle to online payment, CheckFree-supported financial services sites offer integrated E-bill and paper bill payment, or "pay everyone," capability, for a small fee. Through the service, the consumer pays electronic billers via the Internet, and can direct CheckFree to issue paper checks to other payees using funds from the consumer's bank account.

TransPoint plans to offer the "pay anyone" capability within nine months, according to Henn. The company is working hard to increase the number of its contracts with billers in recognition of this barrier, he added.

"Based on our consumer research, a customer needs to have at least three to five billers offer electronic billing for them to make the switch. We're dealing with about 50 billers that have contracts or are in the process," said Henn. "We feel we'll make additional inroads here after Y2K and we think things will accelerate rapidly then."

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