> Businesses in the US create and send 1.7 billion bills and statements each month, spending annually $17 billions in postage -US Postal Service.
> The average household receives 12 -14 recurring bills each month - Gartner Group
> Five industries account for more than half of all recurring bills: insurance (23%), communications (23%), credit cards (20%), utilities (18%) and loans (16%) - Gartner Group.
Killen and Associates, a leading research firm on the impact of the Internet, believe that for enterprises such as financial services, telcos and utilities, Ekectronic Bill Presentment and Payment (EBPP) is essential to transforming their business so they can prosper in the new millenium.
EBPP can make a major contribution towards reducing the costs of billing by eliminating the paperwork involved in sending out and getting paid for billions of bills. The resulting electronic bills are not only cheaper to generate but also more interactive.
But EBPP is more than a cost- reduction tool. It can yield significant competitive advantage through the acquisition and retention of new clients, customer relationship management and increased opportunities for cross selling and up selling.
That's why 56% of billers want to present their bills on their websites. This model - Direct Billing - works to their advantage as they retain control over their customers.
On the other hand, the Yankee Group estimates that 80% of online consumers would rather visit a single website than multiple biller-specific websites to pay bills electronically. From the consumer's perspective, the Consolidator model for EBPP makes the most sense.
A consolidator presents each visitor to its Web site with multiple bills related to his or her billing account. The consolidator model comes in two flavors: the "thick" model and the "thin" model.
In the "thick" consolidator model, the biller provides complete summary and detailed billing data to the consolidator. The consolidator typically converts this data into HTML for Web display to the customer. In this model, it is the consolidator and not the biller who controls the customer relationship and can use it for its own purposes in cross selling and up selling. Transpoint, a joint venture between Microsoft, First Data Corporation and Citibank offers the "thick" model.
In the "thin" consolidator model, billers provide only summary data to the consolidator who converts the data into HTML for display to customers on its website or other third party web sites. To access detailed billing information, customers click on a link that takes them to a detail page on the biller's own web site. The "thin" model is an option provided by CheckFree.
