Not much new here. From American Banker-
Noise
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The Tech Scene: E-Bill Presenters Meet Harsh Reality, See Hard Road Ahead
American Banker Wednesday, May 22, 2002
By Chris Costanzo
For all the talk about electronic bill presentment, precious few banks are actually offering the service, and the reasons they are not may be difficult to surmount.
While bankers cite consumer apathy as the chief reason they are not pushing bill presentment, a second problem is a subtle turf war. Banks want to increase customer loyalty through online billing; nonbank billers do not want to cede any part of a customer relationship to banks that would present bills on their behalf.
The success of the biller-direct model, in which large consumer-oriented enterprises such as telephone companies and credit card issuers deliver their own bills via their own Web sites, is no doubt hampering banks in presenting aggregated bills on their sites.
Some billers are making it hard for banks to get their bills, which they realize bring consumers back to their Web sites again and again.
As a workaround, CheckFree Corp., for example, has screen-scraped the Web sites of some large billers so it can present their bills elsewhere. Of the 250 bills that CheckFree now presents electronically through various sites, 26 are scraped from primary billers — those that send out more than 100,000 consumer bills a month.
Despite the reluctance of some billers to play ball, bankers agree that probably the biggest barrier to offering aggregated bill presentment is that consumers have not yet been convinced of its usefulness.
Many big banks are steering clear of presentment entirely.
Among them is $81 billion-asset KeyCorp, which tried out the technology early on. The Cleveland company conducted a pilot test with Transpoint, which used to be owned by Microsoft, First Data Corp., and Citigroup Inc.
CheckFree bought Transpoint in 2000, but KeyCorp ended the pilot test and its involvement in presentment even earlier, said Paul Ayres, the banking company’s senior vice president of online services. The major shortcoming was a lack of electronic bills to show customers, he said.
“At the end of the day, what presentment requires is a change in behavior,” Mr. Ayres said. “If all you can tell customers is that they can get two bills electronically, that’s not enough to change — particularly for something so personal as paying bills.”
Mr. Ayres said he expects KeyCorp to get back into presentment, perhaps next year. But it is not in the plan for this year, he said.
AmSouth Bank, headquartered in Birmingham, Ala., also is abstaining from bill presentment. “We don’t hear our customers clamoring for it at this point,” said Rod Woodford, a senior vice president and the director of e-commerce.
The $38 billion-asset bank has about 450,000 Internet banking customers but considers bill presentment “an emerging product and technology,” Mr. Woodford said. He echoed the concern of Mr. Ayres at KeyCorp that many billers still do not put their invoices in electronic form.
Mr. Woodford said the possibility that AmSouth would lose customers to banks that offer bill presentment does not worry him. “We are always asking our customers what their needs are,” he said. “We’re not having attrition problems.”
Nevertheless, consumers seem to be starting warm up to the idea of getting their bills online. CheckFree said in April, that it had distributed more than 1.1 million bills over the Internet in March, 38% more than in December and 214% more than a year earlier.
Some bankers fault their own industry for CheckFree’s having more success in this area than any particular bank.
Randy Bryan, the senior vice president for delivery channel management at Hibernia Corp. of New Orleans, said banks have not impressed the convenience of the service on their customers. “We haven’t done that job yet,” he said. Ultimately, consumers will want to go to a single site to get all of their bills, Mr. Bryan said.
Janey Place, an executive vice president at Mellon Financial Corp. and the head of Mellon Lab, said there is a reason that presentment is not evolving as a defined bank product. “That would require consumers seeing the value in it, and I don’t think we’ve ever defined what that value is,” she said.
Indeed, some banks that are heavily involved in bill presentment technology do not offer third-party bills through their Web sites. These abstainers include Wells Fargo & Co., which is a part owner, along with J.P. Morgan Chase & Co. and Wachovia Corp., of the electronic bill presentment consortium Spectrum.
Citigroup Inc., which has a number of efforts under way to boost presentment, lets its customers access third-party bills only through a relationship with PayTrust Inc., a Lawrenceville, N.J., presentment and payment company.
Indeed, Gomez Inc., a Waltham, Mass., research and consulting firm, says that only seven of the 30 banks on its Internet banking scorecard offer presentment. To be counted, banks must offer bills from third parties through a service that is integrated into their online banking offerings; Wells and Citi do not qualify.
“The number of banks doing presentment is definitely a minority,” said Moriah Campbell-Holt, a Gomez analyst. Only Bank of America Corp., Bank One Corp., Charter One Financial Inc., LaSalle Bank, U.S. Bancorp, Wachovia Corp., and NetBank Inc. make the Gomez list.
But according to CheckFree, the leading provider of electronic bill payment and presentment technology, 475 of its customers — the vast majority of them financial institutions — are acting as bill presenters to consumers. And that number does not include the banks that get presentment services from CheckFree’s competitors, such as Metavante Corp. of Milwaukee and Intelidata Technologies Corp. of Reston, Va.
In fact, 475 may be a fairly liberal interpretation of bill presentment usage by CheckFree customers. It really represents the number of bank customers that have signed up for bill payment, a service that automatically includes presentment capabilities.
“Whether they’re actually doing presentment or not is another issue,” said Mark Moore, the vice president of channel marketing at CheckFree. He added that customers often view bill payment as the lead draw and then move into presentment by stages.
Findings from Gartner Inc. indicate that many banks are barely aware that they have a presentment service. One of the most surprising findings of the survey, which was conducted in January, was that banks across the board did not know how many of their customers were viewing aggregated bills through their Web sites, said Avivah Litan, a research director at Gartner.
Presentment is “a very passive exercise,” Ms. Litan said. “It just comes bundled with payment. The bank doesn’t do anything; it’s all outsourced.”
Some banks may take the extra step of working with CheckFree to find out how many customers are actually using presentment, she said, but most do not. |
