The Emergence of Electronic Bill Payment & Presentment
The Internet will change the way you live. Statements of this nature have proliferated the airwaves, the investment threads and the written and verbal rhetoric mediums for several years. To the exception of information gathering, communication, on-line auctions, brokerage and retail sales, the changes have been more user oriented than not. Certainly these respective procedures and industries will attract even the most novice of Internet user to the Web, some in repetitive fashion, but the hook, the reason why an individual will begin to use the Web and never quit is on the horizon, Electronic Bill Payment & Presentment ("EBPP").
The most simple, time consuming and often times annoying and mundane of tasks, the repetitive opening of bills, writing and recording of checks and submitting said payments through the U.S. Postal Service is about to change; enter EBPP. Author John Naisbitt in his book "Megatrends: Ten New Directions Transforming Our Lives" spoke of how trends are identified, become better recognized, emerge further and then proliferate. Naisbitt considered the placement, length and quality of publication of an article concerning a "trend" as the criteria which signified at which stage of recognition the "trend" was. Last week's front page USA Today article by Paul Davidson on the front page of the Money section, "The Check Is On The Net" says it all; EBPP has arrived and is here to stay.
Davidson suggests that consumers have "not flocked to online bill payment" because the banks have yet to promote it. It is this author's opinion that regardless of what the banks do, it is what the consumer understands is available that will drive the EBPP model. The banks do not send you your bills. They are merely the conduit, as is the post office, through which your bills are currently received and paid. It makes no difference who writes the check, as long as there is a viable account from which to withdraw funds from. Unless your bank intends to present "all" of your bills to you, it will be more logical and efficient to deal with a "bill consolidation" service provider like CheckFree, or one of its competitors, to deliver your bills to you. Bill payment, the backend of the process, is but one part of what will shape this Internet product. Of equal or even greater importance to the future model of EBPP is the presentment side.
If the Internet stands for one thing it is communication. When you get a regular paper bill it is static in nature. From the face of the bill you know who you are, what your account is, what you paid, spent and how much you currently owe and what to do if there is a problem. Some more sophisticated billers have gone as far as to insert statement stuffers into their statements in hope of obtaining future revenues. Within these frameworks is where the bill presentment side will truly revolutionize the method in which bills are received, interactivity.
Instead of receiving a static bill through the mail imagine getting an "ebill" through an EBPP provider. Naturally, all of the information available on a regular static bill will be available but so will many other auxiliary functions. Your biller could provide to you the ability to dispute charges electronically by simply allowing you to "click" on a disputed charge, insert the reason why in a conveniently available "drop down" box, deduct same from your monthly statement and pay the difference. In addition, if the bill provider had a monthly special, this new and improved presentment system could allow for the biller to accept a direct order or inquiry as to its "new and improved" offer. The variances and potentials are almost limitless, grossly more efficient and cost benefit and reductive inherently in nature, to both the consumer and the supplier. In short, where has EBPP been all of our lives?
CheckFree Corporation, the operating subsidiary of CheckFree Holdings, Inc. Is the leading provider of financial electronic commerce services, software and related business products. CKFR provides bill presentment services to more than 60 of the nation's largest billers and is approaching the 3.0 million consumer level as this article is written. The last quarter produced significant fireworks for CKFR. Its stock, after reaching a level of almost $70 per share retreated to the mid-twenties level due to uncertainty surrounding the entry of The Exchange, a three member consortium comprised of three of its biggest bank customers established to compete with CKFR on the bill presentment side. Unknown to most, all three banks continue to work integrally with CKFR and will do so for the foreseeable future.
The growth of EBPP will be through the portals. CKFR has a dynamic relationship with INTU, a holder of almost 20% of the outstanding shares of CKFR. Through INTU, CKFR reaches millions of potential new customers but the best is yet to come. Several credible news sources have reported that YHOO and AOL are all but ready to announce their "bill payment" services which utilize CKFR's services. The uncertainty surrounding the timing of these announcements, what the costs will be to induce and sign-up these new customers and what the rate of retention will be have continued to depress the price of CKFR shares. It is this writer's opinion that these worries are grossly overdone.
It has taken CKFR years to construct and roll-out its EBPP system. Rome was not built in a day. It is highly unlikely that any new competitor could approach or challenge the superior integrity, functionality and interactivity of the existing CKFR system. The broadside attack of The Exchange's announcement was a counter to CKFR's newly announced approach to opening up the portals as significant sources of new clients. The banks fear the loss of deposit dollars to portal related competitors. Analysts noted that the banks were simply not doing enough to enhance their relationships with existing clients. Now the banks have more to worry about.
Regardless of where EBPP has been, it is here now and, even as this author drafts this article, is currently being featured on CNBC. Henry "Ric" Duques of First Data Corporation is speaking openly about the benefits of EBPP. Well, I guess you have to chalk one more up for John Naisbitt. Front page on the USA Today Money section, the forefront of CNBC's lunchtime coverage, one can only imagine what will be next, maybe a dinner time discussion about how well it works. Too late for that one, EBPP has been at our dinner table for two years. Perhaps it is time that EBPP made it to your table?
<<It's time to get this message out>> |
