Prediction: E-Commerce - Paying the Bills

Those piles of invoices could start to shrink, according to a study by the Aberdeen Group Inc. in Boston. The report, "Internet Bill Presentment and Payment: E-Business Solutions for Improved Customer Service and Cash Flow," predicts that IBPP (both consumer and business to business) will increase more than 500 percent to US$1.9 billion by 2005. As payees seek to get a grip on their cash flows, payers will look for the efficiencies online payment can provide.

Getting those returns is going to take some time, however, according to Andrei Arkhipov, an Aberdeen research associate and coauthor of the report. Online bill consolidators have yet to attract the critical mass of billers necessary to make their customers take notice. Online exchanges, which Aberdeen feels could fill a big gap in the online presentment market, rarely offer such services (though the company predicts they will in the next 12 to 18 months). And current standards such as the Internet Financial Exchange are insufficient to handle the complexity of B2B billing.

Despite the hurdles, Aberdeen predicts that some 10 percent of B2B billing will occur online by 2005, thanks to benefits to both buyer and seller. IBPP, the report says, saves billers time, improves customer service and decreases uncertainty about when bills will be paid. Payers, meanwhile, benefit from being able to work with electronic documents instead of reams of paper, bill consolidation and better reporting.

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