Most of this is all news to me....but what the heck it's got the thread nemisis in it....enjoy, and have a good weekend!
MUDDLED BILL PRESENTMENT MODELS Different Alternatives Promoted By New Competitors
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Story Filed: Thursday, May 12, 1999 11:43 PM EST
May. 12, 1999 (CORPORATE EFT REPORT, Vol. 19, No. 9 via COMTEX) -- Billers and bankers, don't put all your eggs in one electronic bill presentment and payment basket just yet.
Between the recent service disruptions from CheckFree [CKFR], revving up of TransPoint operations, and the emergence of additional competitive alternatives, EBPP options are likely to become more complicated before a clear-cut solution shows itself.
To make sure you're not on the outside looking in when the perfect EBPP answer comes along, "bankers need to talk to billers, and promote a universal bill presentment system. It has to be an anyone- to-anyone system," says Douglas Braun, president and CEO of the Internet Payment Exchange (IPAYX), a newly created payment clearing organization based in Clifton, Va.
Are organizations heeding this advice? "No. So far all of them are focusing on [their own] individual efforts," Braun emphasizes.
The list of market players only is increasing. New Jersey-based Princeton eCom is poised to go public in a few months, and is aiming its sights at CheckFree's domain. Portsmouth, N.H.-based Bottomline Technologies [EPAY] has big EBPP plans, although its strategy is still under wraps. And the United States Postal Service is rumored to be eyeing the market, if its charter is amended to allow e-commerce ventures.
Who Controls The Process?
"A vast majority of billers - city governments, large utilities, all sizes - are looking for an answer where they have control over the [entire] process. They don't want to send [bill data] out to third parties," says Mark Brinkman, president of Brinkman Technologies Inc.
Dallas-based BTI has developed a new EBPP service, NextBill, which uses a direct billing model to make the biller the turnkey service bureau. Payments are sent and received by e-mail, payments are processed using the Federal Reserve's automated clearing house system.
"If billers are in control of the cycle, and they have a problem [like CheckFree], they'd know about it in the first minute," Brinkman says.
The problems affecting CheckFree in late April, disrupting service to nearly 500,000 online customers, notably users of First Union [FTU] and Wells Fargo [WFC], are only the most public example of the firm's woes, says Gary Craft, managing director of investment research for E*Offering [EGRP]. "CheckFree has some issues, we've always felt that way," Craft says.
Thick Skin, Thin Clients
The big problem: "They're shifting from a fat-client to a thin- client [model]," Craft says. A fat-client model involves the biller sending a bill to the customer, and then the customer rekeys the data into the CheckFree service. Conversely, biller-controlled, thin- client models allow electronic data to come from a legacy billing file.
Payment irreconciliation in the fat-client method, and the ability to use both push and pull methods for thin-client billers, makes thin the preferred system of the future, Craft believes. Firms like Princeton eCom, which also provides electronic lockbox services, already have established technologies to use this model.
While CheckFree is having to play catch-up with the technology, it has the advantage of size and influence. "After their IPO [in 1995], CheckFree bought their competition, bought out most of the market, and set up their business model [which everyone followed]," Braun says.
"But there is a tremendous undercurrent of unease [in the market]. When we speak to lockbox firms, they say they are afraid CheckFree is moving them out of the loop.
"There's still a lot of competition for a model, that's why we're getting into the business," Braun says. (Douglas Braun, IPAYX, 703/449-8890; Mark Brinkman, BTI, 972/242-8090; Gary Craft, E*Offering, 415/835-1503.)
Copyright © 1999, Phillips Publishing International, all rights reserved.
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