Article from american banker about the Anthrax/postage situation.
Banks are in an intersting position right now. They know it's the best time to promote electronic bills with the Anthrax scare center stage in the media. But there is only ONE consolidator that can currently deliver bills electronically to banks in the foreseable future - CKFR. Spectrum has yet to go live and when they do it will only be for mortgage and credit card bills from the 3 member banks. It will take much longer to get the first non-bank bill into the system. Maybe that's why Pete felt comfortable enough to mention Wells in the CC.
Noise
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The Tech Scene: Unintended Consequences for EBPP Set
Wednesday, October 24, 2001
When Princeton eCom Corp. kicked off a marketing campaign three weeks ago with a series of “teaser” promotions — shipping mysterious boxes to media outlets with contents like rubber stamps and cookie cutters — company executives had no idea they were launching the effort into the face of a postal anthrax scare.
“More than one person internally asked, Do you think we should stop it?” said David Alecock, director of client marketing at Princeton eCom, which sells electronic bill payment and presentment technology.
It did not stop, reasoning that most recipients would recognize the company name in the packages’ return address. And as it turns out, the campaign may have made a more powerful case than it otherwise would for electronic alternatives to parcels and envelopes.
Experts say that consumer demand for e-billing, which has always been weak, stands to improve as people’s fear of the mails worsens. But the real impetus could come from billers, who may conclude that electronic bill presentment is the best and fastest way to get paid at a time when the USPS is being forced to work so cautiously.
Princeton eCom and other companies pushing for mass conversion to e-billing are do not want to be seen as capitalizing on the anthrax scare, but “it makes sense, if people are afraid to go to their mailboxes, they will be looking for alternatives,” said Jason Briggs, a senior analyst at the Yankee Group, a technology consulting firm in Boston.
While it may not be entirely rational to fear getting an infection from opening a credit card statement, he said, “you’re dealing with the U.S. consumer. They’re pretty irrational sometimes,” so the threat of bioterrorism may represent “an unfortunate short-term opportunity for billers.”
Even before Sept. 11 there were some signs of growing interest in EBPP. In its annual survey of 2,100 “technologically advanced families,” the Yankee Group found that 8.7% of consumers were paying bills online in 2001, compared with 5.1% last year.
The postal anthrax scare “could be the kick in the pants that EBPP has needed,” said Jeanne Capachin, a senior analyst at Meridien Research of Newton, Mass.
In a report citing research done before Sept. 11, Meridien says that consumer demand for EBPP “remains tepid” because consumers are unwilling to pay for the ability to receive and pay bills online and because banks have not embraced it.
Meanwhile, the USPS is trying to allay the public’s worries. “We’re taking all sorts of actions to ensure the safety of the mail,” said Stephen M. Kearney, a senior vice president with the postal service. It is testing its facilities and employees to guard against exposure to the bacteria, and the Postal Inspection Service and the Federal Bureau of Investigation are offering a $1 million reward for information leading to the perpetrators in the anthrax cases.
In addition, the images of anthrax-tainted letters that have been released to the media — stained envelopes with too much postage and the recipient’s name crudely scrawled in block letters — bear little resemblance to commercial bills, with their slick marketing messages and computer-generated addresses in window envelopes.
“There is some exaggeration right now in terms of people’s concern,” said Mr. Kearney, who headed the USPS’ own EBPP program, eBillPay, before taking a new role in charge of mail pricing and classification this year. He declined to speculate on the impact of the current crisis, saying: “We’re not making any assumptions about the future at this point.”
The Yankee Group says a bad selling job by billers and their banks is one reason for the relatively low EBPP adoption rates. But better marketing and the development of more robust tools — the ability, for instance, to click on a phone number on a long-distance bill to see to whom a call was made — could help EBPP turn the corner, Mr. Briggs said. “I think we’re on the verge of stronger growth than we’ve seen in the past,” he said.
Princeton eCom said it hopes better marketing will lead to more use of EBPP. Its ill-timed media campaign was aimed at getting billers to avoid “cookie-cutter” and “rubber stamp” solutions, and to try innovative ways of promoting EBPP. Its “eMersion Marketing System” features a checklist of issues for companies to consider for point-of-sale displays, employee training materials, sample bill-stuffers, and banner ads for the company Web site. It also includes a boilerplate press release that billers can use to announce their EBPP offerings to local media.
More businesses are coming around to online billing, Mr. Alecock said. “They are starting to recognize the full value proposition of EBPP, the huge benefits and cost savings by doing billing by electrons rather than paper.”
Those cost advantages may only increase, Mr. Briggs said. Quite apart from the psychological effects of the anthrax attacks, this episode is likely to force the Postal Service to adopt new procedures, slowing mail delivery and raising costs, he speculated.
He added that when the Yankee Group asks consumers who they see as the ideal consolidator of their bills, “they always put their banks,” Mr. Briggs said. Though banks have not promoted EBPP heavily, he said, “if they do that, they’re going to get some pretty positive reaction from the end consumer.”
Ms. Capachin added that rising fees for postal delivery may encourage billers to underwrite the expense of online billing, keeping the price to the consumer low or free.
“It’s appropriate that the biller bears the cost of this,” she said, “because they get most of the benefit.”
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