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EBPP Begins to Take Hold
February 23, 2005
Kenny Hargis
Technology for Finance
Summary:
Kenny Hargis examines the evolution of electronic bill
presentment and payment and considers what the future
holds for this increasingly popular technology.
The Internet continues to become more pervasive, seeping
into the many facets of life. In the financial sector,
this fact is perhaps most evident in the rise of electronic
bill presentment and payment (EBPP) capabilities. Three
quarters of all bills are still being paid via the paper
format, but the increased use of EBPP in recent years
is dramatic. Adoption rates of the technology continue
to increase, and, as the younger generations become
active participants in all things financial, those rates
could skyrocket before long.
But first, to understand where EBPP is going and why
it is important for all financial institutions to at
least begin considering this technology, an examination
of the technology’s evolution would be helpful.
EBPP: A brief history
The story of EBPP begins a few years ago during the
late 1990s, a time when many in the technology industry
were heady with success. In a number of markets, new
technologies were being developed and introduced at
a maddening pace. It was no different for the financial
services print and mail industry.
Document service providers were flush with success
and ready to make the technological adjustments that
would propel them into the 21st century. With analysts
predicting that paper-based billing would disappear
within a few years, document service providers diligently
went about the process of developing electronic billing
systems. Some companies jumped in head first, spending
millions of dollars to roll out such systems. Many believed
the reason they were spending those millions of dollars
was to prepare them for ‘the future’.
As it turned out, ‘the future’ wasn’t
all it was cracked up to be. Because so many of the
early EBPP systems didn’t work properly or offered
only part of what they promised, it was easy for customers
to decide against using them.
When faced with the reality of viewing and paying their
bills online, most customers balked, opting instead
to stick with what they’d always known. “Paper
billing might not be perfect,” they thought, “but
at least I’ll have something to hold in my hand.
Plus, I won’t have to learn how to use some complicated
Internet site.”
It’s hard to blame the customers for coming to
such a decision. Those early EBPP systems really did
lack the functionality and flexibility of those available
today.
Ultimately, because the customers weren’t interested
enough in EBPP in the late 90s, the technology went
into a kind of hibernation. Companies that had banked
their future on EBPP would have to wait (if they had
enough capital to stay open – or if they had another
line of business). Many of them didn’t make it,
and the ones that did were forced to take a hard look
at EBPP and figure out a way to make lemonade out of
lemons.
EBPP’s first re-emergence
Early on, a few companies with strong EBPP infrastructure
realized that they didn’t have to wait around on
the public to be comfortable with the technology. In
fact, these companies knew that if they played their
cards right, they could start the process of helping
people become used to the technology. They began with
customer service representatives (CSRs).
This early re-emergence of the technology featured
only the presentment, and not payment, but it was effective
then and continues to be so now. The application enables
CSRs to review electronic representations of bills or
other information mailed to customers. The technology
that had been built for presentment and payment made
it possible for document service providers to create
digital versions of bills and information that were
the same as the paper-based versions.
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