Telcos Kick The Tires On Web-Based Billing
October 14, 1998
Inter@ctive Week : It isn't exactly a stampede, but
telecommunications companies definitely are moving toward the e-commerce era by
testing -- and in some cases implementing -- Web-based applications that deliver
electronic billing services to their customers.
Phone companies are obvious candidates for electronic billing, given the size and
complexity of phone bills. And the Web offers an interactive format in which customers
can slice and dice their statements to examine spending patterns or double-check
charges.
"Web-based bills are almost like an information warehouse of sorts for customers,"
says Andy Woyzbun, vice president of systems at AT&T Canada Long Distance
Services Co. (www.attcanada.com). "What's really useful to a company is looking at
patterns of ingoing and outgoing calls."
AT&T Canada plans to launch an electronic bill presentment service for business
customers in early 1999.
Besides pleasing customers with greater flexibility, e-billing eventually will help service
providers cut costs by reducing printing, mailing and processing overhead -- in addition
to shrinking customer support requirements. Other potential benefits of e-billing include
improved sales and cross-marketing potential, says Chris Gwynn, a senior analyst at
The Yankee Group (www.yankeegroup.com). With e-billing, for example, a service
provider could program particular banner ads to show up on the electronic bill of a
customer with certain calling habits.
First Things First
Getting to that point of sophistication, however, could take a while. The e- billing
industry is so new, observers say, that it's difficult to predict how or how fast e-billing
will evolve. Uncertainty surrounding the technology and infrastructure for electronic
bill presentment and payment is slowing development of this promising technology.
"Standards are the No. 1 challenge of e-billing," says Paul Hughes, consumer
communications analyst at The Yankee Group. "It's very much a free-for-all, and no one
knows where the market is headed."
Right now, available e-billing products enable service providers only to create
stand-alone sites that customers must visit to view their statements. Systems that
deliver bills electronically or that allow electronic payments are challenges that still are a
year or two from reality. On the payment side, customers must pay via credit card or
check.
Phone companies and others interested in e-billing, particularly utilities and financial
institutions, are looking for technology that will enable customers to visit one site to
pay many monthly bills. Many industry executives say this kind of consolidated
e-billing will be essential for e-billing to gain mainstream acceptance.
"Once that happens, you'll see a tremendous number of billers come online, " says Brian
Valente, director of marketing at Just In Time Solutions Inc. (www.justintime.com), a
provider of e-billing applications.
Until e-billing becomes mainstream, service providers aren't likely to reap any financial
savings from electronic billing, says Jorge Martin, product manager for electronic billing
at International Billing Services Inc., a third-party billing agent that processes bills for
wireless and long-distance providers. Martin expects customer adoption of e-billing to
stay in the single-digit range for the foreseeable future, possibly reaching a 10 percent
market penetration by 2003.
International Billing (www.billing.com) says it will help ease the transition to e-billing for
its service provider customers by supporting technology standards for interactive
billing as they arise.
Without any apparent mass-market momentum, many service providers are biding their
time, actively testing e-billing but holding back from major market launches.
AT&T became one of the first providers to offer e-billing when it launched a Web site
in March. Customers who use the site now pay their bills by credit card; AT&T says
that by year's end, it will update the site so customers can authorize bill payments to be
drawn directly from their bank accounts.
The ultimate goal is to enable customers to authorize electronic payments from their
bank accounts at the click of a button, much like writing an electronic check.
Gavin Norwitz, manager of interactive billing at AT&T, says customers using AT&T's
electronic billing service number "in the thousands to tens of thousands," but that
figure doubles monthly. The company offers its lowest domestic long-distance rates to
customers who use the e-billing service.
But Norwitz says AT&T has not marketed the service heavily, preferring to refine the
site and learn from experience before attracting large numbers of subscribers.
Behind The Scenes
On the development side, e-billing is attracting attention from some big players.
Systems integrator Electronic Data Systems Corp. (www.eds.com) launched an
interactive billing service in August, including e-billing site hosting, Web site
development and billing data transfer management. EDS says it has signed up several
customers for its service, including some telecom providers.
Other players in e-billing include TransPoint (www.msfdc.com) and CheckFree Corp.
(www.checkfree.com), two companies that are battling over standards and payment
infrastructure. TransPoint, which until last month was known as MSFDC, is backed by
Microsoft Corp., First Data Corp. and Citibank Corp.
Software vendors throwing their hats into the e-billing ring include a dozen or more
small developers, such as Just In Time, BlueGill Technologies Inc. (www.bluegill.com)
and Netdelivery Corp. (www.netdelivery.com).
"The telecommunications industry is really a forerunner in e-billing development,"
Larinda Wilson, a vice president at CheckFree, says.
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