Banking plus billing equals a Net gain

The bill-paying public is warming to the idea of using the Internet to square its debts.

Sometime early next year the number of bills paid over the Internet by customers of leading bill payment service BPay is likely to surpass its phone payments.

The billing service, owned by the Big Four banks plus St George and Bankwest, is trying to take the logical next big step by adding an electronic bill presentation (EBP) service.

Early EBP entrants, such as Australia Post and E-Bill, a subsidiary of leading bill production company Hermes Precisia, have found it slow going. A less than enthusiastic takeup by billing companies has been a major problem.

With its bank backing, BPay's somewhat tardy arrival in the bill presentation space may help convince more billing companies to climb on board.

There is no doubt internet banking in general is reaching critical mass in Australia.

BPay, launched in 1997 mainly as a phone service for bill payers, claims to command 12 to 14 per cent of the total Australian bill servicing market.

About 43 per cent of its customers now prefer to pay some or all their bills via Internet against only 15 per cent in 1999, says BPay general manager Linda Hemstrom.

Internet billing volumes are steadily gaining ground on phone volumes and now sit around 42 per cent, representing 50 per cent of the value of bills processed.

If the gain of nearly one percent a month continues, BPay's internet banking volumes will overtake phone volumes for the first time early next year.

Hemstrom suggests the Internet channel is gaining converts because the visual interface provides a richer information set than phone banking.

All up, 2.5 million Australians are now registered for Internet banking, Hemstrom says. BPay's system is accepted as a payment method by 4000 billers and 130 financial institutions.

BPay is hoping to launch its new electronic bill presenting system in the second half of the year.

It spent 18 months researching business models and technology solutions for its Electronic Bill Presentment and Payment (EBPP) system. On the technology side, after testing a variety of offerings for scalability and robustness, BPay has given the nod to iPlanet's BillerXpert Internet software platform and Sun server hardware.

Like E-Bill and Australia Post who both launched electronic bill presentation services last year, it has rejected the biller direct model in which customers have to visit the Web sites of individual billing companies.

The model is inconvenient and confusing for customers because it compels them to go through multiple registration and password procedures, Hemstrom says.

The so-called thin client aggregation model BPay has selected gives clients a single screen that shows them a summary of all their bills. To view more detail, customers must click on individual items to link with the Web sites of billing companies or billing service providers.

Payment is handled through bank-backed BPay's existing system.

"Being able to view your bills on the same Web site where you pay them is a natural step," says Hemstrom.

"The value proposition for billers is there are no more dishonoured funds and it gives them to the 2.5 million people who now use Internet banking."

It also promises them new marketing channels because they will be able to use bill presentation screens to tout their services and products.

The EBPP system has been piloted with five banks and a number of key billing service providers, she said.

Although BPay is now looking at bringing the service online before the end of the year, it has failed to meet a number of previous expected go-live dates.

One fly in the ointment is the lack of urgency felt by billing companies who would have to spend money on integrating their back end systems with such services.

Australia Post and E-Bill have managed to sign up only four to five billers to date, a takeup rate that reflects the global experience.

Story courtesy The Industry Standard Australia

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