eBilling Adoption ExaminedPublished on 26 Jun 2007
It is approximately 12 years since the Internet and email began its significant impact on our lives. In that time, there is almost no aspect of our daily activities that is not influenced by this. In the USA today, over 80% of all Americans between the age of 10 and 70, access the internet multiples time a week, the vast majority doing so every day, and as high as 35%, many times a day.
A subgroup of internet and email is electronic billing – the ability for a consumer or business with access to the internet, to be able to view and pay their bill or invoice through their personal computer. This is an emerging trend that is still however in its infancy. The majority of consumers, over 95%, still receive almost all of their bills in paper form. Although it is becoming more common to pay some bills either through a bank’s billpay service or at the biller’s own website, the primary driver of electronic billing, that being paper suppression, is not being realized.
There is a massive and growing awareness of the environmental impact of paper production. For every 38,500 bills produced, 1 ton of paper is used, 2 tons of trees are destroyed, 16,450 gallons of water is used, 1,941 pounds of solid waste is generated, 60 pounds of air emissions are spewed out and 5,058 pounds of greenhouse gases are emitted. (www.papercalculator.org) Billers in the USA for example, produce (at a minimum) 14 to 16 pieces of paper and as many envelopes, per customer per annum. That is 7,5 million pieces of paper per year for a mid market biller with 500 000 customers, or in green terms, 400 tons of trees…
Let’s take a moment to examine why that is:
- Right now, the consumer does not need to do anything; the paper bill arrives without them having to perform any action. It is the way it has happened all of their lives and there is currently no compelling reason to do it any other way.
- The electronic billing offerings that are prevalent in this industry (in the USA) all involve the following:
- The utility needs to, and in most cases has, built a self-service website. I.E.: a location on the internet where a consumer can go and view and pay their bill.
- However, the consumer does not know it is there unless expensive marketing is undertaken.
- Sadly, there is neither incentive nor compelling reason to visit these websites. In all cases, it is quicker and more convenient to write a check and drop it in the USPS mail, even at a 41c cost.
- The best websites require a consumer to register, choose and remember (yet another) username & password.
- They require between 6 to as many as 14 clicks to view & pay the bill.
- At very best, it takes three to eight times as long to do so than writing a check.
- They require consumers to learn different navigation for each biller’s website.
- A copy of the bill is available online, but in every case it is not the first thing that the consumer sees. So the familiarity is lost and the consumer feels that something has been taken away from them.
- The result? Even if some do pay online, 95% still get a paper bill too.
- To make matters worse, now that the ‘innovators’ and a portion of the ‘early adopters’ are paying online, it is becoming progressively more difficult (and increasingly more expensive) for billers to attract their consumers to their self service portals.
- From the biller’s perspective, most are now on second or even third generation websites after three to six years. Hundreds, if not thousands of dollars have been spent on building, servicing & supporting these initiatives and the Return on Investment is nowhere even remotely in sight.
Our take on this? The model is fatally flawed and will not result in significant paper suppression.
The Future of Electronic Billing – Your Inbox
Within the realm of internet driven technology, the single most pervasive application is that of email.
Let’s take a few steps back and think about the time before email. There were four kinds of paper mail; Junk mail, Business / work related mail, Personal mail , and of course, your bills.
These days, in the email era, three of the four mail types have made their way directly into your inbox. The one type that is conspicuously missing are your bills. Now why is that? There is no clear answer that we can come to. We can only guess that it was easier for the biller to try and ‘pull’ you to his website than to electronically deliver you your bill.
However, recent research tells us that the average internet user is spending 96% of his online time handling his email. (Just think about the amount of time you personally spend handling email communication as opposed to visiting websites.)
Billers now have access to efficient systems & technology that securely deliver your bill, and take payment, directly from within your inbox. The difference from a customer’s perspective is dramatic: two clicks to view and pay your bill.
E-mail has become the ubiquitous business and personal communication medium. Our take on the future of electronic billing: There is no logical nor practical reason why your bills are not in your inbox, and it is only a matter of time before they are. Billers are going to combine both ‘push’ and ‘pull’ Electronic Bill Presentment and Payment strategies to ensure maximum customer adoption.
Imagine getting all your bills directly into your inbox. Imagine that paying each bill took less than 30 seconds. Now that’s delivering true electronic billing convenience.
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