USPS Puts Stamp on Online Billing

WASHINGTON (04/10/2000) - The fear of losing billions in revenue has pushed the U.S. Postal Service to deliver an online service for electronic billing and payments.

USPS announced April 5 that it would immediately offer customers the option of paying their bills online through a secure World Wide Web portal. The Postal Service is partnering with CheckFree Corp. and YourAccounts.com to present the online service, called eBillPay.

In the arrangement, USPS serves as a neutral third party, similar to the role it plays when delivering printed mail, said USPS spokesman Gerry Kreienkamp.

The move to offer online services is USPS' attempt to survive in a market that is moving toward electronic messaging and is bypassing postal services, said William Kovasic, a procurement lawyer and visiting professor at George Washington University who specializes in USPS.

"The USPS had to make this move or it would be a failing firm," he said.

"[USPS'] future is at risk without change. This raises the question of what the role of the USPS will be in the future."

Nearly two-thirds of all recurring bill payments, such as mortgage and utility bills, are delivered by USPS every year. If all bills were paid electronically, USPS could lose $15 billion to $18 billion in revenue annually. That's why USPS wants a leadership role in how the transactions are completed, Postmaster General William Henderson told postal workers during a convention last week.

"Since the earliest days of this country, the Postal Service has been there to connect Americans in every neighborhood and city with each other," he said.

"Today we are reaching out to make sure that universal service is also available in our country's newest community -- the online community."

Located on the USPS Web site (www.usps.gov), eBillPay will enable the Postal Service to remain competitive vs. commercial handlers such as UPS and Federal Express, Kreienkamp said. "We are looking for new revenue bases," he said. "Any business or government agency needs to utilize the modes and means of technology that its customers are using to be competitive."

USPS' eBillPay will give customers a central place to pay their bills. Unlike commercial sites, which require an individual pass code for each transaction, eBillPay customers enter the site once and can pay everyone they wish.

Customers enrolled in eBillPay select the companies or people from whom they want to receive electronic bills. Those billers will then send bills electronically through the Postal Service system, which distributes the information to the customer.

After viewing the bills online, the customer can pay them electronically and specify the payment date. Money will be taken directly from the customer's account and electronically transferred to the biller's account. Customers can use e-billing even if a bill is not sent electronically through the USPS Web site. USPS would send a check to the specified biller, Kreienkamp said.

All transactions are secured with user names and passwords, and a Secure Socket Layer is used to prevent outside inspection. The system also uses 40-bit and 128-bit encryption to make information unreadable as it passes via the Internet. "We have taken every precaution possible to prevent someone from accessing information," Kreienkamp said.

In the next few months, eBillPay customers also will have the option of attaching an electronic postmark to every transaction. It would verify who sent the transaction and provide a receipt when payment was received. The postmark also would notify the sender and the recipient if the document had been tampered with. Despite USPS efforts to allay security concerns, industry experts question its ability to handle dramatically new programs such as e-billing.

"Even if the technology is superior, trying to do something like this will inevitably create talk about what the USPS is doing," Kovasic said. "It is going to be hard to be successful because of the existing status of the USPS as a [government]-owned institution, and the policies they must follow are not complementary with new product development."USPS eBillPay system offers customers:

-- A secure Web portal to pay any individual or business via the Internet.

-- A Web site where recurring payments, such as mortgage payments or utility bills, will be made automatically.

-- The ability to schedule single payments up to a year in advance.

-- A single point of entry that will notify customers that a payment was received.

-- A Secure Socket Layer system to ensure that connections and information are secure.

-- A 40-bit or 128-bit encryption process to make sure information is unreadable as it passes over the Internet.

-- An electronic postmark system that will be available soon to notify the recipient and the sender if a document has been tampered with.

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