PC Magazine: You may soon be able to pay all your bills at a single Web site
By Sharon Nash
The American consumer is flooded with bills almost every day: bills for utilities, bills for credit cards, bills for medical expenses. The paper trail of bills, checks, and receipts is confusing at best, but the Internet is offering a solution: electronic bill presentment and payment.
Bill consolidator CheckFree has several years' head start over Microsoft-backed TransPoint and is the current favorite. Meanwhile, the Sun Microsystems/Netscape Alliance also has big plans for online bill payment. Most people, however, still prefer to pay by paper check and snail mail.
Traditionally, billers such as utilities and credit card companies send paper bills. Customers then mail checks to billers, and billers deal with banks to debit accounts. For several years, online bill payment has been available through Microsoft Money's and Quicken's online options, as well as through an increasing number of banks such as Chase and Citibank. This process saves you the trouble of writing and mailing checks, but paper checks are still produced and mailed to billers.
More recently, consolidators such as CheckFree and TransPoint have gone a step farther, providing bill aggregation and Web presentation technology to billers. Customers visit billers' (or consolidators') Web sites directly, enter bank information, and arrange for electronic checks or direct debits. "Bill payment has been available for several years, but bill presentment is the final piece of the puzzle," says Gustavo Machado, a spokesperson for CheckFree. "Presentment will make this a paperless process." Currently, only two banks--Bank One and First Union--present bills to customers using CheckFree as the processor, says Machado.
With a rumored partnership between CheckFree and Yahoo! in the works, an even simpler approach may be available in which consumers will be able to visit a single portal or bank site and review a summary of all of their bills, which a consolidator has provided. Consumers can then visit billers' Web sites via a frame in the portal. The benefits? Consumers need to visit only one site, portals and billers get eyeballs and customer loyalty, and consolidators get a piece of every transaction.
"For the moment, a direct distribution model suits everybody. It provides sticky content that will bring customers back time and again," says Avivah Litan, a director for market research firm GartnerGroup. Nevertheless, she predicts some dramatic changes. "Portals will eventually get in on the action, get rid of consolidators like CheckFree and TransPoint, and go directly to the billers themselves," she says. She goes even further to suggest that within five years consumers will have electronic agents sent out from household devices that will handle such chores as bill payment automatically, eliminating the need for Web portals as we understand them today.
When it comes to purchasing goods online, electronic payment methods are multiplying at breakneck speed. Dozens of electronic wallets are available, as are keyboard-based credit card readers and even cellular phones with credit card swipes. Some analysts say consumers aren't quite ready to embrace alternative methods of bill payment, such as electronic cash or smart cards. "In the next five years, a lot of households will be banking online and receiving and paying bills online. There will be lots of different ways to pay, but credit cards will be dominant for online shopping," says Rob Sterling, an analyst at Jupiter Communications. "We still don't have a truly fluid way to move money on the Web," he says.
Start-up UTM Systems has come up with a solution: the UTM Machine, a standard floppy disk reengineered as a magnetic-stripe reader with a slot for a credit card. To make a Web purchase, you slide your credit, debit, or ATM card into the disk and insert it in your PC's floppy disk drive. An ATM-like interface pops up on-screen, and you enter your PIN via your keyboard. Since the system is linked to the ATM network, it's able to verify your PIN just as an ATM does.
The UTM Machine eliminates the need to reenter payment information whenever you make purchases. And the rather low-tech approach doesn't require you to get a special smart card. The mag stripe readers will be available for free from banks.
<<PC Magazine -- 07-01-99>>
[Copyright 1999, Ziff Wire]
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