The Check's not in the Mail
Anthrax threats boost interest in online bill-paying service

by Richard Lee
Stamford Advocate Staff Writer *

Pitney Bowes expects to be busier than ever marketing its Digital Document Delivery software to businesses seeking a safe way to send bills to customers.

In the midst of the nation's anthrax contamination threat, the Stamford company says interest in its electronic billing system is increasing.

Pitney Bowes, through Document Messaging Technologies, a division formed last year to oversee Digital Document Delivery, is selling the program to its customers through online and direct marketing.

Designed to give high-volume mailers a way to supplement hard copy distribution of their invoices, bills and statements, reducing handling costs and adding convenience for customers, it may be security issues that drive the growth of digital billing.

The threat of anthrax contamination has certainly spurred interest in the system, said Scott Gerschwer, a Pitney Bowes spokesman.

"Billers are calling us because consumers are leery about opening envelopes," Gerschwer said. "We were seeing growth in this before the attacks."

Anthrax fears will cause companies to consider buying Document Messaging Technologies's product, predicted Avivah Litan, vice president of financial services, bill payment and presentment at Stamford-based Gartner Inc.

"It can only be a positive. There's a much more willing audience now. People could be much more willing to go through the task of signing up," Litan said.

In the late '90s, industry analysts predicted digital billing and payment would be the Internet's next "killer app." But technology and habit slowed its growth.

"The Internet is still slower than opening an envelope," Litan said.

According to Gerschwer, "We're never going to replace paper bills. Billers are going to continue to send bills. The digital divide is a factor, and some people don't feel secure paying bills online."

If online bills and payments are kick-started by anthrax, Pitney Bowes' prospects of being a leading supplier of the necessary software are good because of its reputation and financial standing, Litan said. Pitney Bowes has already outlasted several competitors.

"I think they are well-positioned," Litan said. "They've been a little slow to get into the electronic billing space, but they definitely have the sales force working in companies' mail rooms." Thus far, Pitney Bowes has implemented the software for 40 businesses around the world. The company sells a software license for $250,000, but most customers have chosen to have Pitney Bowes act as an application service provider. The Stamford company then collects a fee for the service, said Karl Schumacher, Vice President, Global Business Strategy and Acquisition.

United Illuminating and the South Central Connecticut Regional Water Authority, both based in New Haven, are using Digital Document Delivery.

About 5,500 UI customers are taking advantage of the service to pay their bills electronically. It's a small percentage of UI's 300,000 customers, but company spokeswoman Myra Stanley predicted it will grow in popularity.

"It doubled from 1999 to 2000, and we expect it to double again for 2001," she said. "We feel customers have embraced it because the number of customers using it has grown consistently month by month. We feel it's paid off for UI."

Only 20 of the South Central Connecticut Regional Water Authority's 102,000 customers have used the system since a pilot program started in August, but Noel Grant, director of consumer relations predicted that will increase when the authority starts promoting it this month.

"The bottom line is to give our customers an opportunity to access us 24 hours a day," Grant said.

The anthrax scare did not enter into the authority's decision to contract with Pitney Bowes, Grant said, but it could encourage more people to use the service.

Development of Digital Document Delivery is an effort to develop safe mail and messaging offerings, Schumacher said. "Pitney Bowes is clearly making a strategic commitment to its Document Messaging Technologies organization," said Avi Greenfield, an analyst with Doculabs, an independent analyst and consulting firm. "Pitney Bowes understands that e-presentment is integral to any organization's overall e-commerce strategy."

* Reprinted with permission from the Stamford Advocate