A Fresh Look at EBPP

Six years after information technology pundits dubbed electronic bill payment and presentment the "next killer app" of the Internet, the industry is still wrestling with the fundamental "chicken and egg" conundrum that has stifled the growth of consumer adoption as billers, banks and aggregators compete to be the provider of choice for online presentment and payment.

Six years later the same questions remain unanswered—bank or biller? biller direct or bill consolidation site?—and consumer acceptance of online presentment remains in the low single digits. The stakeholders may have different approaches and different motivations – banks want to keep the revenue they make from payment processing, especially as they see less revenue from consumer check processing fees. Consumer Internet service providers—the Yahoos, the AOLs—want to provide a valuable consumer service on their home pages to drive advertising dollars.

And while reduced paper and postage costs are still the main driver for billers, they also want EBPP to drive consumers to their websites for their cross selling and up-selling opportunities. EBPP is more and more being looked at as good CRM, and online customer service and self-service promise significant reductions in call center costs.

Only one key constituency has yet to calculate a strong value proposition for itself: the consumer. And clearly, without them this whole thing goes nowhere.

For better or worse, people still enjoy getting the mail, even though at this point in time it mostly consists of "junk mail" or bills. More significantly, consumers have basically accepted the current direction of the industry—more and more consumers prefer to receive and view their bills in paper even if they pay them online. That is why online payment is enjoying double-digit adoption rates while online presentment has languished at 2% to 5%. There’s no ROI for billers without paper and postage suppression. So where’s the beef?

Pitney Bowes jumped into the EBPP fray fairly early on, as several utilities, service bureaus and insurers using their paper bill processing software and equipment wanted to add EBPP in the late 1990s as an additional channel for early adopters in their customer base. The 83-year old mail and messaging giant made a key investment a few years back when it purchased Alysis Technologies for its top-rated D3 EBPP technology. Pitney Bowes continues to add billers to its customer list but perhaps more importantly, took it upon itself to study consumer behavior with regard to bill payment in an effort to resolve the chicken and egg riddle.

A team of researchers visited over one hundred homes to observe people going about the act of receiving and paying paper and electronic bills in order to identify pain points, understand the workflow within the home and better understand the bill paying habits of the American public to see why adoption of EBPP hasn’t taken off. The team interviewed thousands of people on the telephone and at shopping malls in order to gain insight into their desires and their fears about EBPP.

Pitney Bowes says that the findings of this project may lead it to re-invent EBPP at some point in the near future. For now though, some of the insights may prove helpful to billers looking to make the most of their EBPP investments.

Consumers identified control, privacy, organization and expediency as the main factors in their bill view and pay process. They want to maintain control of the payment process, rather than turn to auto-pay and direct debit models. In order to maintain a measure of privacy, they want to keep banks and billers from sharing too much information about them with one another. They don’t want banks to see their payment history, for example, or to know that they once missed a phone bill payment and received a dunning notice or had their service interrupted.

In terms of organization, consumers want to keep the process orderly and to have the electronic presentment and payment process closely aligned with how they view, pay and store their paper bills. They want more convenience, of course, but more than anything else, they don’t want to pay for the service.

Household management is all about trying to reduce unexpected events. The workflow is familiar to everyone—going to the mailbox, bringing in and opening the envelopes, evaluating and cataloging bills in terms of action needed, placing the bills that don’t require immediate action in a secure but obvious location so that, despite the resultant clutter, they have a reliable reminder of their need to pay a bill.

People like to identify simple action triggers for each bill that help them decide when to make a payment. Paying the bill and storing the bill are last but obviously important steps in the process.

Consumers say that anything that adds on to that process without adding value to it —whether it is the payment of a few bills online or an additional fee for that service -- will continue to result in rejection. The question is how to add that value without creating more problems, which is what Pitney Bowes will be looking into as the year progresses. So stay tuned and visit pb.com for more articles about the future of EBPP.