Bank of Oracle, First National Microsoft?
April 22, 1998
PC Week via NewsEdge Corporation : Companies would kill to tap into the pipeline that ties those who send the bills to those who pay the bills. It's a billion-dollar industry that's currently made of paper and postage stamps. But Microsoft and Oracle are sharpening their shears.
Since mid-1997, Microsoft has been working hard to deliver tools and technologies to break into the burgeoning area called EBPP (electronic bill presentment and payment). EBPP allows billers, such as your cable company, phone company or electric utility, to get out of the antiquated process of cutting their own bills.
Instead of getting paper cuts opening envelopes, consumers like you and me can simply download our bills and track our payments with Quicken or Microsoft Money, and then check our statements on a secure Web site. The transfer is handled through OFX (Open Financial Exchange)--the results of a technology merger between Intuit and Microsoft that allows service bureaus, such as banks, to transfer financial data to client software.
This ends up being far cheaper for the billers overall, since they don't have to worry about paper processing costs, returned mail and late payments. They can also get a bonus from selling directly targeted electronic ads packaged with their electronic bills.
Bill'S Way To Pay The Bills
To get the job done, Microsoft formed a 50-50 partnership with First Data Corp., the country's third-largest bill transaction processor, to form an outsourcing bureau for electronic bill paying called MSFDC (www.msfdc.com). The current plan is that each biller pays a per-transaction cost that's about the same as a postage stamp.
Oracle is staying out of the outsourcing business and instead is going with Tribeca, the code name for its EBPP solution, which is unannounced but due out sometime this year. The company will simply sell the technology and let the billers and banks implement it
themselves. While this is a smart strategy, it may end up hurting the company if it doesn't start striking up agreements with banks and billers.
The field for Tribeca may be more open than with MSFDC. Oracle estimates that 200,000 companies are potential customers. Instead of just the telcos and utilities getting in on EBPP, anyone that sends bills can do it--with a few caveats, that is.
First of all, Tribeca requires the Oracle8 database and Oracle Internet Application Server 4.0, which is just about ready to ship. Though Oracle has a massive share of the relational database market, Oracle8 cannot be said to be a big factor behind Oracle's success.
Microsoft is no sure thing, either. It's got a scale problem. There are 10 billion bills posted each year. How many banks or billers think Windows NT is up to the task?
There's also another, far more established player in the arena. CheckFree has been doing electronic billing (including mine) for years and has agreements with Quicken and Microsoft Money.
But although CheckFree is more mature, it has its own problems. It removes banks too much from the equation, preventing them from interacting directly (read: offering more costly services) with the consumer.
This field is wide open. It's probably best to let the early adopters figure out these issues.
Can you bank on Microsoft or Oracle? John Taschek can be reached at
john_taschek@zd.com.
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