Good article on EBPP it mentions Checkfree, Transpoint and BLLS
nwfusion.com
Obstacles remain for 'Net billing
But companies are confident that electronic bills will pay off once more customers embrace them.
By ELLEN MESSMER
Network World, 10/25/99
Consumers are increasingly willing to pay their monthly bills electronically over the Internet, eliminating the old excuse "the check is in the mail."
This should mean dramatically lower costs for the telephone, utility and other companies issuing monthly bills. Internet bills generally cost billers about 50 cents or less to process, whereas it typically costs at least twice that for traditional bill processing, which involves printing and postage charges.
But while consumer support for Internet billing is on the rise, billers still need a lot more customers to embrace the concept before the billers can break even on their Internet billing investments. Worse, there's no standard for getting billing information out of the biller's back-end system, usually a mainframe, in order to present it in full detail on the Web for payment.
That means the biller may take one technical approach to post a consumer's bill at its Web site, if the consumer wants to pay the bill there. But if a consumer wants to review and pay the bill at other points on the Web, say at a bank's Web site or Yahoo, the biller has to get that consumer's billing data over to those points, too.
In the nascent bill-payment industry, two players are strong enough to dictate to the billers the technology they must use. One company is TransPoint, which has a Web site for aggregating all a consumer's bills so they can be paid at one time. The other is CheckFree, which operates as a facilitator between a Web site posting the bill and the biller providing the content.
The lack of a common standard puts pressure on companies that want to provide online bill payment for customers.
"In the short term, Internet billing is not a cost savings because of the cost to get it going," says Gary Wright, manager of IS at Central Hudson Gas & Electric, which this month made its bills available via TransPoint. Earlier this year, the utility made its billing data available to CheckFree.
To handle the different technical demands from TransPoint and CheckFree, the utility called in a bill-payment service bureau, BillServ, to take a simple flat file from Central Hudson and make it available each way the bill aggregators wanted it.
"TransPoint is a more proprietary type of data exchange using a lot of Microsoft tools, while CheckFree is more like electronic data interchange," Wright says.
TransPoint is a venture between Microsoft, First Data and Citicorp that posted the first consumer bills on its Web site for payment in April. TransPoint's goal is to aggregate a consumer's bills so a person can pay all his bills at one Web site rather than have to jump around from site to site.
TransPoint relies on the billing company to install what it calls the Biller Integration System to upload bills, usually from a mainframe to a TransPoint server in Seattle. There, TransPoint posts the monthly bills for its subscribers - the service is free to bill payers.
Archrival CheckFree works under a totally different model. CheckFree operates as an intermediary, providing "sponsors" (companies interested in posting consumer bills, usually the banks) with monthly statements made available by the biller's back-end system via a Web application server. Unlike the TransPoint model, with CheckFree the billing company doesn't have to regularly blast out large volumes of data. But the billing company is required to provide a view of the billing information on an application server accessible through CheckFree's security token and certificate technology.
Last month, Yahoo started a bill-payment service based on CheckFree, adding momentum to what some researchers claim will be a tidal wave of online bill paying in the future.
One research firm, Killen & Associates, estimates that out of 61 billion bills worldwide, 1.8 billion are paid monthly via the Internet. Forrester Research figures that three million households use electronic bill payment today, and that the number will quintuple by 2002.
With these prospects in sight, the banking industry is pushing for a bill payment and presentation standard that would rely on XML for translating bill information into a common format. The Banking Industry Technology Secretariat (BITS)-the high-tech think tank that's part of the Financial Services Roundtable - says the standard will be completed later this fall.
However, that may not be in time for members of Spectrum EBP, a joint venture involving Chase Manhattan, First Union and Wells Fargo. The firms are just about ready to start sharing billing data via the Internet.
Banks earn revenue from payment processing, and they want to ensure that this revenue stream is not eliminated as more bills get paid on the 'Net.
"We have over 300 million bills between the three of us," says June Felix, senior vice president at Chase Manhattan, who emphasizes that building a foundation for interoperability in sharing bills is paramount to the banks. "We agree on operating rules, and we think it's important this be open and interoperable."
Banks pay CheckFree a fee for each consumer paying his bills online, says Lynn Busing, executive vice president at Norcross, Ga.-based CheckFree. Busing says CheckFree has three million consumers using its service via 350 financial institutions.
CheckFree serves about 40 billers that distribute their bills electronically. The companies include First Union, Schwab, BellSouth, AT&T, MCI WorldCom and Qwest. MCI WorldCom, meanwhile, this month announced it also will provide bills via TransPoint.
Ken Hobday, CheckFree's vice president of standards, co-chairs the BITS working group on the proposed XML-based bill-payment standard (called IFX). But he is not sanguine IFX will be adopted quickly.
"Standards are important, and CheckFree is committed to them," Hobday says. "But CheckFree should not be constrained in a fast-moving industry." Bill presentment is new, and "codifying the business rules constrains what people can do," he adds.
"As the industry grows, it would be wonderful to have a way to exchange these bills," Hobday says.
TransPoint only has "a few subscribers now" and less than 100 billers, with only 25 live on the system, says President and CEO Lewis Levin. He acknowledges it will be an uphill climb to get a nationwide roster of the biggest billers on board in order to make monthly bills available to consumers in volume.
"Everyone agrees IFX is the right idea," Levin says. "But even after you agree, it takes a while for it all to come together." |
