From american banker -
Noise
*************************
The Tech Scene: Postal Scare To Boost EBPP? No Answers Yet
Wednesday, December 5, 2001
By Steve Bills
Since the anthrax scare took hold, market watchers have been weighing in on whether the threat to the postal system has driven consumers to online billing.
Yet there is no consensus in sight. Some say the fading panic over tainted mail has had no discernable impact. Others argue that continuing consumer fear of terrorism is triggering a long-term shift away from paper statements and toward e-billing.
James Van Dyke, a research director at Jupiter Media Metrix in New York, says that even if consumers wanted to abandon the conventional practice of receiving monthly statements in the mail, they could not.
"The content is not available for people to solve the anthrax problem," Mr. Van Dyke said in an interview last week. Electronic bill payment and presentment, he said, is still in "an embryonic stage."
In fact, he said, consumers seemed to back away from e-billing in late October - when the media coverage of the anthrax scare was the most intense, and deadly spores were being found in government complexes and journalists' offices.
He cited his firm's tracking of key Web sites that provide EBPP services, where traffic had been growing fairly steadily, at about 2.5% a week since August, up until the last three weeks of October. "That's when consumers were getting scared."
During those October weeks, traffic to the sites of four major e-billers - American Express Co., Discover Financial Services Inc., the U.S. Postal Service, and the PayTrust Inc. bill-scanning service - actually declined, before growing steadily again last week, Mr. Van Dyke said. His conclusion? "Consumers were distracted by the news of anthrax and other threats to the extent that they went to EBPP sites less."
Avivah Litan, a vice president and research director of financial services at Gartner Inc. in Stamford, Conn., said that despite Jupiter's data, there has been increased interest in EBPP since the first reports of tainted mail. "If they're only measuring large billers, it wouldn't show up, and it might take a couple of cycles for it to show up."
Some of Gartner's biller clients have reported surges of 20% or more in consumer inquiries and enrollment since the anthrax scare began, Ms. Litan said. An actual increase in usage would take longer to become apparent, because it often takes one or two billing cycles to activate a new account, she said.
She acknowledged that the findings were based on "anecdotal evidence," but she said the numbers from Gartner's most recent EBPP survey lend weight to her theory.
Another survey by Dove Consulting of Boston found a change in change consumer attitudes since Sept. 11. In that survey, 7% of consumers said they signed up for online billing or increased the number of bills they receive online since the attacks and the subsequent anthrax scare. They cited concerns over handling the mail and late bill payments.
Also, 32% of the consumers surveyed said they were "thinking differently" about online billing. More than half of them said their No. 1 concern was "getting the payment to the biller on time," said Richard Crone, a vice president at the firm.
With new security at post offices and lockbox locations, and additional precautions in the handling of the mail, "it all adds up to a delay in processing," he said. "We all know this is critical to cash flow and cash management."
One thing most analysts agree on, however, is that the anthrax scare came just as e-billing finally began to catch on.
Jupiter boasted last month in a press release that it had correctly predicted in July that consumer EBPP would take off in the following three months. Gartner, meanwhile, headlined its report to clients: "Anthrax Scare Spikes Interest in Already Surging E-Billing."
Beth Robertson, a senior analyst at TowerGroup, a consulting firm in Needham, Mass., dismissed anthrax as a root cause of the upsurge. "The reason is more bills are being created electronically than in the past," she said.
Ms. Robertson said she doubted that the use of e-billing could grow any faster - anthrax scare or not - because billers have not begun producing enough digital statements. "There are a limited number of them in production now, and that's not going to change overnight."
Mr. Crone said that, even though there is strong and growing consumer interest in EBPP, banks should respond not by targeting retail customers, but by reaching out to corporate accounts.
"The focus to this point has been extending home banking" by adding online billing and payment services, but banks have not yet started promoting e-billing as an adjunct to lockbox services for billers, he said. "Until this point, we have not seen the wholesale bank come to the party."
Whatever the analyst community may make of the current EBPP environment, some vendors themselves refuse to participate in the debate.
"Exploitation of a tragic event is not something we want to be involved in," Randy McCoy, executive vice president and chief technology officer of CheckFree Corp. in Norcross, Ga., the leading provider of e-billing services, said last week at a Jupiter-sponsored financial services forum in New York.
"We haven't seen a lift" from the attacks, he said. "We don't want to see a lift." |
