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EBPP in Europe An interview with CheckFree i-Solutions
How would you compare the Electronic Bill Presentment and Payment (EBPP) market in Europe and the U.S.?
States – it is generally recognised that North America has about an 18 month lead in the market. In fact, about 75% of the global EBPP market is located in North America, with market leaders like CheckFree playing a key role in its evolution. Just as the U.S. looks to Europe for the latest trends in wireless communications, we at CheckFree in Europe are leveraging the U.S. lead in EBPP to give our e-Billing customers a speed-to-market edge in this rapidly growing space.
How would you define EBPP?
A recent EBPP report in Europe defines it as “a process that allows bills to be created, and then delivered and presented to customers online via the Internet for payment. Customers in context means business customers or consumers.” Bill presentment and payment are actually two separate processes, each one with its own set of complexities, even though they may be offered as an integrated solution. To a consumer, viewing and paying bills is one process; they don’t think of a bill as being ‘presented’ to them.
What are the business and consumer benefits of EBPP?
There is a consensus amongst analysts such as Jupiter, Forrester, IDC and Gartner that the EBPP market is now gaining momentum. According to Jupiter, within the next five years over 40 million households in the US will have adopted EBPP.
In the business-to-consumer arena (B2C), businesses benefit by dramatically reducing customer service and billing costs while producing incremental revenue from highly targeted marketing campaigns. Many forward-looking companies see EBPP as the new keystone to a successful customer relationship management (CRM) strategy. Consumers benefit by having access to analysis tools and the capability to download statement information to their personal financial management systems. Integration with many different payment options potentially provides the consumer with greater control of their cash flow.
However, it is in the business-to-business (B2B) arena that the benefits of an EBPP system have produced the quickest payback. For the corporate customer, the ability to analyse call detail, records/transaction level details online and import accounting data offers major savings in reduced paperwork, accounts management and reporting.
What cost benefits does EBPP provide?
Telecommunications companies, which generate a high percentage of bills available for online viewing, as well as other high volume billers such as cable, utilities, insurance, credit card and other financial organisations, can realise massive savings in printing, handling and postage costs. U.S. studies reveal that the average monthly cost of issuing paper-based statements and bills sent out by post is about $1.25 per item. An electronic bill costs about 35 cents to process. With interactive bill query and other self-care facilities embedded in EBPP, this also means a major reduction in call centre traffic and consequent savings in CSR time which averages between $8 and $15 per event.
What other business benefits does EBPP offer the biller?
Actually, it isn’t so much the cost savings, or even the reduced time it takes to deliver a bill, that is driving the adoption of EBPP. What lies at the heart of the matter is control of the customer interface. With the cost of winning a new customer estimated to be about four times that of retaining an existing one, this makes customer loyalty a major business issue in the borderless world of the Internet. The monthly bill, to which customers must return on a repetitive basis, is one of the ‘stickiest’ opportunities for billers to build value-added interactive communications with their customers. EBPP’s potential to generate one-to-one marketing, cross-selling, up-selling and expanded e-commerce opportunities is exponential.
Who are the early adopters of EBPP?
In the U.S., more than 200 leading billers, including AT&T, Verizon, BellSouth, MCI Worldcom and Sears use CheckFree bill consolidation services. In Europe, we supply the CheckFree i-Series software to large operators like Cable & Wireless for biller direct applications. Our i-Series software enables the easy conversion of paper-based bills for presentment on the Web and include sophisticated features for detail analysis and bill queries, interactive communications and CRM tools. We are also selling e-Billing solutions to an increasing number of consolidators and third party bill processing intermediary that we call Billing Service Providers (BSPs). Some of these companies started as traditional bill printing bureaux’s and are now introducing electronic presentment, while others are new entrants who are building an entirely Web-based environment.
What are the arguments for installing EBPP inhouse vs. outsourcing the service?
One of the major reasons for bringing the EBPP process in-house, rather than outsourcing it, is that billing direct ensures hands-on control of the customer. Whether it is a telephone company, utility, credit card company – retaining control of the customer interface is paramount. The monthly bill is one of the few vehicles that guarantees a regular, repetitive, interactive communication with customers, making it an invaluable tool for generating profiling data and medium for relationship marketing. Whosoever owns this process, owns the customer.
There are also some strong arguments for outsourcing EBPP. For one thing, not everyone is in the position to, or wants to, develop an electronic billing infrastructure. Smaller companies and billers who have decided to take a phased approach to EBPP are looking to the growing BSP community as a way to get on board the EBPP train without having to commit to the capital investment in technology, specialist staffing, implementation times and ongoing system maintenance required for an internal system.
Another reason for outsourcing is the growing trend in the consumer preference for a consolidated interface. From a consumer’s standpoint, being able to view and settle all bills from a single website (that of the consolidator or other entry portal) is more convenient than having to visit each biller site in turn. Some billers are hedging their bets and setting up their own biller direct service (whether managed in-house or via a BSP), whilst also opting to work with local bill consolidation initiatives. This enables them to ‘meet’ the consumer wherever the consumer chooses. As in the U.S., here in Europe critical mass is building in the consumer ‘e-Bill’ marketplace.
At CheckFree we offer either approach – direct billing or outsourcing – because our mission is to bring e-bill content to EBPP, and enable billers to get into the market however it works best within their overall strategies and processes.
Is the demand for BSP and consolidation services growing in Europe?
As a result of the consumer demand to see all their bills on a single website, more and more consolidation providers are emerging in Europe. This fact, coupled with the steep rise in third-party service provision via the BSP community, means that an increasing amount of billing and statement content is now available electronically to end customers. Many of the new European consolidators are also offering a BSP service, in order to stimulate the supply of online content.
Norway’s largest consolidator and BSP, EDB Teamco, is an example of a traditional print-to-electronic billing bureau that now generates over 1.3 million electronic pages a month. An early leader in this new marketplace and one of the most advanced bill consolidation initiatives outside of the US, EDB is now signing up an average of one new biller per month to their service. Norwegian customers are now able to access consolidated electronic bills and statements through their existing Internet bank site, which acts as a portal to the EDB “bill hotel”.
Are there different types of consolidators?
Yes. Generally, there are two types – what are called ‘Thick’ consolidators, and ‘Thin’ consolidators. ‘Thin’ vs ‘thick’ is another of the technology issues currently evolving in EBPP. With Thick Consolidation, the bulk of data for the e-bill resides in the consolidator’s database and all bills must be viewed via its home page. With the Thin Consolidation model, data is retained in the biller’s own system. A consumer views a summary statement on the bureau’s website, and is then able to link seamlessly to the consolidator’s website for drill-down enquiry or response. With all data and interaction remaining in the biller’s control, it is not surprising that the thin consolidation model is gaining ground.
You mentioned earlier some of the features of CheckFree’s e-Billing software – what sort of capabilities are billers and BSPs looking for when they start shopping around for an EBPP system?
Our experience at CheckFree i-Solutions is that customers – whether they be direct billers, BSPs or consolidators – are looking for open-standards based solutions that are easy to customise, can be implemented quickly and have the scaleability to accommodate change. Speed-to-market and flexibility for growth are major drivers in a market that is evolving so rapidly. Customers are also looking for solutions that enable easy integration with existing systems so that legacy data can be streamed to a browser-based front end. Industry-strength data analysis tools are vital, both for marketing reasons and customer care.
How do you see the future for EBPP
Analysts predict that EBPP is the tool that is going to transform banks’ and billers’ relationships with their customers, making communications far more interactive and customer service oriented. Already EBPP is turning the routine billing function from a costly operation on the part of the biller, and an often painful task on the part of the consumer, into a value added experience both ways. Providing new marketing opportunities to the biller, and enabling the customer to feel more in control of their monthly billing and settlement experience.
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