CheckFree to Introduce E-Mail Billing Service
Tuesday, March 13, 2001
By Andrew Roth
from americanbanker.com
CheckFree Corp. plans to announce a new service today that will enableconsumers receive and pay bills by e-mail and make person-to-person payments the same way.
CheckFree says the service, using an upgrade of its WebPay software, will be available this summer and might help wean consumers from checks, stamps, and cash. The Atlanta electronic bill payment company will offer the service directly to consumers and will also let its 275 bank and Web company clients offer it to their customers.
Electronic bill presentment and payment was once expected to be the fabled “killer app,” but it has seen slow adoption rates. Most existing services are cumbersome and consumers must seek them out. Most billers are not ready to present bills online, which often means that bill presentment services must scan them by hand.
CheckFree says that by shifting the service to e-mail, it can overcome lackluster adoption rates, and help make both online bill payment and person-to-person payments more mainstream.
“There are numerous studies showing that huge numbers of people on the Internet are using their e-mail for multiple hours a day,” said Tim Renshaw, a product manager in CheckFree’s e-commerce division. “It makes sense that bills and payments come to where consumers are, which is at their e-mailbox.”
E-mail delivery is expected to greatly simplify what can now be a messy process. Consumers must seek out bills wherever they may be presented, which could be at a biller’s or a bank’s Web site, a consolidator’s site, or a combination of all three.
“People won’t have to go fishing for bills, which no one wants to do,” said Avivah Litan, research director at GartnerGroup in Stamford, Conn. “This is actually bringing bills to the consumer. Just like it’s delivered to your mailbox, bills are going to be delivered to your e-mailbox.”
In a July 2000, Jupiter Communications survey of the online habits of 2,312 adults, e-mail topped the list of the most used applications, with a 93% response. A September 2000, Forrester Research study predicted the volume of e-mail messages will continue to grow exponentially, reaching more than 25 billion a day by 2005. The typical Internet user will spend four hours every day with e-mail, according to a July 2001 GartnerGroup report.
The person-to-person payments service will be integrated with the electronic billing service, letting consumers get consolidated historical views of payments to any entity, from the electric company to personal friends or family members, Mr. Renshaw said.
But analysts said CheckFree will have a hard time penetrating online auctions, where the vast majority of Internet person-to-person payments are executed. Ninety-nine percent of about 42 million person-to-person payments last year were for online auctions, said Beth Robertson, a senior analyst with TowerGroup in Needham, Mass. That number will be 95% by 2005, she said.
“Sending some money to your cousin for their birthday, that type of usage, is very uncommon at this stage,” Ms. Robertson said.
However, CheckFree’s ability to bundle in bill payments could help boost adoption of person-to-person payments, she said. “One of the things that the platform will do is put P-to-P in place where consumers will be coming for other reasons, like paying their bills,” she said. “It makes P-to-P more easily accessible.”
Ms. Litan said she also is skeptical that person-to-person payments outside of the online auction world will be widely adopted soon. She asked, “Who is going to want to use” person-to-person payments? “It is not a very interesting application. Banks have not been promoting their P-to-P services, and when they have, they haven’t gotten very good usage because there is no interest in it. Consumers don’t want to send money to each other electronically unless there is no other way.”
Banks that offer CheckFree’s e-mail billing service will be able to offer their consumer customers e-mails containing the amount owed, the payment due date, and a payment button. When the consumer clicks “pay,” their identity is authenticated at the financial services organization or portal’s secure site before being validated and settled with the biller.
If the consumer prefers to view the bill detail before paying, he can click a “view bill detail” button. This links him directly to the biller’s Web site, where he can schedule the payment, change the payment amount, view his account history, and purchase additional goods and services.
Edward McLaughlin, chief executive officer of PayTrust Inc., a bill consolidator in Lawrenceville, N.J., said his company already uses e-mail to alert customers that they have bills, and that the service is very effective. A secure link connects customers from their e-mail to a bill aggregation site, where they can click a link to view bill details.
“From PayTrust’s perspective, the key to the adoption of any online payment technology is convenience to the consumer,” Mr. McLaughlin said. “Anything that makes these services more convenient and more attractive is important to the market.” |
