Online Bill Payment Comes to Hong Kong

HONG KONG (08/01/2000) - Online financial services provider Asia Financial Network (AFN), a wholly owned subsidiary of local online business platform provider iMerchants Ltd., aims to bring the US trend of EBPP (electronic bill presentation and payment) to Hong Kong and Asia.

AFN's aim is to develop online EBPP services for local utility and services companies, as well as financial institutions, over the next three months, according to the company.

The benefits of EBPP compared to other payment methods include cost savings and greater control for consumers over their financial affairs, according to Edward Un, AFN's chief technology officer.

"AFN's key vision is to provide complete personal finance management to consumers, and bill presentment is just the first step," Un said.

Under AFN's EBPP plans, bills are settled by customers when they transfer funds from their bank accounts to the "billers" using a pin number and username registered with AFN and Joint Electronic Teller Service Limited (JETCO), according to Un.

JETCO provides ATM (automatic teller machine) services to 51 local banks in Hong Kong, according to JETCO's Web site. AFN and JETCO formed a joint venture earlier this year to provide EBPP in Hong Kong.

In terms of market advantage, EBPP is superior to direct debit because it gives customers the chance to review bills before payment, according to Un. EBPP is also cheaper for companies than accepting credit card payment, he said, adding AFN will charge a flat-rate charge set below the percentage rate of credit cards.

AFN is currently engaged in trying to persuade more bill-issuing companies with Web sites to offer bill payment online and to accept payment by JETCO transfers as a more cost-effective method than credit cards payments, according to Un.

Most bill-issuing companies do not currently have an online presence that will allow EBPP, according to Un. Instead, they still rely on issuing paper bills, he said.

Un added that in addition to increased site hits, in the long term companies will be able to save money on postage through issuing their bills online.

Later this year, AFN plans to move toward providing a bill consolidation service for banks, according to Un.

Under this second phase, AFN will provide banks with the ability to offer their customers consolidated summaries of their outstanding bills, as opposed to bank customer having to visit multiple sites, Un said.

"This will be a consolidation phase," said Un. "Banks will be able to offer their customers summaries of their bills on their own bills page, so consumers can see their bills as they come in."

Local portals are also interested in adding a bill management feature into their range of features, said Un.

"In the U.S., bill payment has become a common feature of portals, like Yahoo, for example, and an increasingly common method by which to settle bills," he said, adding that Hong Kong can benefit from importing business models and technology generated from the U.S.

"The U.S. has gone through (Hong Kong's) situation two or three years ago.

Hong Kong now has the benefit of learning from the mistakes of the people in the U.S., both in the business model and as it doesn't have to go through the same phases that the U.S. has in terms of building the technology," he said.

AFN also has an eye on developing various business-to-business services based on the same EBPP model. Current ideas include facilitating online escrow accounts for stock market transactions, said Un.

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