BCE links up with Microsoft
for e-billing deal
Partnership boosts chances for contract
with banks
By KATHRYN LEGER
The Financial Post
MONTREAL -- BCE Emergis Inc. and Microsoft
Canada Co. are negotiating an exclusive contract to
provide Canada's first integrated system to receive
and pay bills over the Internet.
The announcement is bad news for IBM Canada
Inc. and Check Free of the U.S., the only companies
left vying for the multimillion-dollar contract after
Electronic Data Systems Corp. and Oracle Corp.
dropped out.
The initiative, described as "one of the largest
e-commerce initiatives in North America," is
scheduled to be fully launched next year by e-route
inc., a company owned by a consortium of six big
Canadian financial institutions.
A final decision is not expected for four to six
weeks, BCE Emergis spokeswoman Anne
Belliveau said. A national pilot experiment is set to
follow in June. But the BCE unit's stock soared on
the news, closing in Montreal at $32.65, up $3.90, or
14%.
Proponents of electronic billing -- already being
tested in parts of the United States -- call it "the next
killer application after e-mail."
At present, consumers and businesses can use the
Internet to pay bills they get by mail, but they can't
receive the bills or view details online. Sending out a
paper bill costs a business between 50c and $2.50
to process.
Bryan Kerdman, e-route's chief executive, said
banks will set their own rates and work out individual
payment for the new billing services with billers and
corporate clients. The charge to consumers
probably would be part of existing transaction
packages.
"Bill payment systems have taken off dramatically
in Canada, and unlike in the U.S., there is a high
trust factor between Canadians and their banks, so
this is a logical step," he said.
E-route itself will charge financial institutions for the
service, but distribute any profits to them. Since it
functions as an outsourcing operation, e-route could
take on equity partners and branch into other
applications, such as offering confirmations of stock
transactions online.
E-route is also looking into how consumers might
be able to make direct contact with billers or other
service providers online rather than on the
telephone.
Simon Witts, Microsoft Canada's general
manager, said since there are fewer banks in
Canada than in the United States, they can assume
a leadership role in implementing the new
Web-based technology, not only on personal
computers, but through Web-television, which was
introduced in Canada six months ago, and in
special kiosks.
He also pointed to a recent study that indicated
37% of Canadians over the age of 12, about 9.5
million people, are online. Of those, about 40%
already bank online.
BCE Emergis entered the running for e-route
project, first unveiled by the financial institutions last
fall, after it bought Toronto-based Newstar
Technologies Inc.'s electronic finance division in
November.
Newstar had worked out an agreement with
Microsoft to distribute its electronic-billing product in
Canada. Microsoft is now selling the system in the
United States through its Transpoint venture with
First Data Corp.
When it acquired Newstar, BCE Emergis said the
contract could eventually generate between
$100-million and $150-million a year in revenue.
Yesterday it cited a McKinsey & Co. North
American market survey that said, "electronic bill
presentment and payment [EBPP] could save
billers, customers and other constituents over
$2-billion annually by 2002."
Meanwhile, another consortium of Canada Post,
Bank of Nova Scotia, and Bank of Montreal is
planning a pilot project for bill payment services next
month. |
