Electronic Billing

Electronic billing has been a hot topic in the utility sector for the past few years. Unfortunately, adoption rates have been anemic at best. Fewer than 7% of the average utilities customers have adopted this service, out of these - less than half have agreed to paper turn-off. And, the promised reduction in contact centre calls has certainly not materialized.

Yet as of January 2006, over 80% of all Americans are accessing the Internet / their email on a regular basis.

Why the poor adoption?

As long as viewing and paying your utility bill electronically is less convenient than writing a check, consumers will be very reticent to do so. These are some of the main reasons why adoption is so low:

• Get vs. Receive: In order to receive a paper utility bill, the consumer does not need to do anything, it just arrives. Internet based ebilling requires the consumer to register, choose and remember a username & password, link back from the reminder email, login, find the bill detail and then pay it. Probably a minimum of 6 to 9 clicks even if one excludes the registration process. Bottom line its just too much hassle and the majority of consumers could not be bothered. (The 39c stamp saving is not nearly incentive enough to drive this activity.)
  
  
• Routine / Customer behavior: The most difficult thing for a biller to do is change consumer behaviour. With regards to written communication, there are currently two routine activities: receiving paper post and handling email. Visiting a website requires a difficult shift in consumer behavior.

Utilities need to find an electronic billing solution that:

1. Does not require expensive marketing activities.
2. Does not require any upfront consumer action.
3. Does not require the consumer to change his behavior.
4. Does not require the consumer to choose nor remember a username & password.
5. Does not require the consumer to visit a website.
6. Is more secure than paper or website billing.
7. Looks identical to the paper bill.
8. Offers the biller equal or better bill-stuffer marketing opportunity.
9. Offers one-click convenient electronic payment.

Impossible?

No, secure email bill presentment and payment offers all of the above.

What is secure email bill presentment and payment?

Secure email bill presentment and payment is the strategy and technology whereby a utility sends a securely encrypted digital replica of their paper bill (and all stuffers), directly into the consumers email inbox and offers them one click electronic check payment from within the email bill.

How does it work?

The path to secure paperless email billing is made up of these few steps: capturing the customer's email address; sending the secure email bill & taking payment; and turning off the paper bill.

Getting the customer's email addresses:

This is the easiest part of the process as most utilities today have already begun gathering email addresses for various reasons. It is certainly not necessary to incur any cost on this process, simply capture an email address at every customer touch point, such as:

• Signing up for new service
• Change of address
• Every call into your contact centre
• Any outbound service call
• A simple two-field form on the home page of your website

Through these mechanisms alone you should be able to capture a minimum of 30% of your customer's email addresses in less than a year.

As soon as an email is captured, a welcome email is immediately and automatically sent to the customer. This email introduces the secure email billing service, tells the customer when they can expect their first email bill and details all the advantages of this convenient service. (It also serves to validate that the email is accurate.)

Secure Email Bill Presentment & Payment:

Now that you have the customer's email address, have confirmed that it is correct, and have introduced the concept, you can begin to send your secure email bill. The email bill should match your paper bill identically, including any bill stuffers - this familiarity is imperative for paper turn off. The email bill can include multiple payment options:

• 'In-email BillPay': check payment directly from within the email bill (one click to pay, no registration required). The payment information entered can be stored and pre-populated for further payment convenience with the next bill. (Note: payment information is hashed out '###-####-413' for added security.)
  
  
• Pay-by-phone: include your pay-by-phone number alongside the amount due.
  
  
• Online Payment: a link to the location on your website where payment can be made. (This option is not ideal as it generally requires the customer to register and thus defeats the objective of 'email DELIVERY' of the bill.)

Note: Due to the push nature of the secure email bill, all aspects of this communication are personalizable, including the subject line, greeting, email body, bill content and related marketing material. This creates a very powerful and ultra cost effective marketing tool.

Paper Suppression:

Once you have auditable confirmation that the secure email bill / invoice is being opened and used, you have two options:

• Opt-in: Ask the customer if you can turn off their paper. This can be done in the body of the email bill or in a separate email. A button is embedded in the email so that turning off the paper bill is just one easy click. (This can also be incentivized through discounting, sweepstakes or a 'save a tree' campaign.) For this option you can expect a paper turn off rate of 5% to 15%.
  
  
• Opt-out: Turn off the paper bill automatically after a certain period of time and give the customer the option to turn it back on should they so choose. Our experience has shown that at most 10% of customer will opt to turn their paper bill back on, giving you an effective paper turn off rate of over 90%. (A recent North American Gas & Electric Utility pilot resulted in paper suppression of 90.6 %.)

It is important to note that when surveyed, customer acceptance of the two options above were identical, the difference for you the biller is however massive.

Example case studies:

Two North American utilities that are in the process of rolling out secure email billing are:

CPS Energy - San Antonio, Texas

The nation's largest municipally owned utility is implementing an innovative secure email invoice / bill presentment & payment project.

CPS Energy will utilize Secure PDF and In-Email BillPay technologies to deliver secure electronic invoices and to take payment from their customers. This project will include:

• Securely encrypted PDF delivery
• Multi & summary Billing
• Inclusion of a data file
• Electronic bill stuffers
• ACH payment directly from within the Secure PDF

Whitby Hydro, Ontario, Canada

Whitby Hydro Energy Corporation will deliver its utility bills using securely encrypted email.

This innovative solution will replace the current paper bill, offering a significantly more convenient option for the consumer, as well as dramatically reducing the time and costs of billing for both Whitby and the consumer.

In conclusion:

Utilities in the USA need to radically rethink their eBilling strategies if significant adoption and paper turn off are ever going to be a reality.

Achieving paperless ebilling in excess of 30% of a utilities total customer base is achievable within 24 months, if a combination of push eBill delivery and website based self service is employed.

About Striata
Striata is an application software developer and service provider focused on enabling secure electronic communication. Striata specializes in the secure delivery and payment of bills, statements, pay-stubs, invoices and all other confidential documents, via encrypted email. Striata has been a provider of software and services in the electronic messaging arena since 1999 and has offices in New York, London, Sydney and Johannesburg, as well as partners across the UK, Europe, Central & South America, and Asia Pacific. Visit www.striata.com.