Online bill presentment is not new, but neither is it ubiquitous, Janet Estep, president and CEO of NACHA, pointed out today at a press conference at the Payments conference in Seattle. The payment organization's eBIDS bill presentment project is an effort to provide universal access to online bill presentment across financial institutions and billers, so that consumers can see and pay all their bills in one place.eBIDS started relatively small in the third quarter of 2008, with J.P. Morgan, Wells Fargo and Dollar Bank working with Verizon, The Clearing House and Federal Reserve Banks to present ebills to customers. Yet 4.5 million transactions have already flowed through the program. "Our goal was to make sure the technology worked and that it provided benefit for players, before rolling it out," Estep says. One key is to provide an open network that's accessible to all banks, not just the largest banks, she says.
Pat Thelan, executive director at J.P. Morgan, says he's pleased with the results of the pilot. "It validates that ACH is the right way to do this," he says. "It's another way to go green. There's a lot of waste and inefficiency in this process today."
Studies show consumers are increasingly migrating to online bill payment and presentment and seeking a consolidated electronic solution to access their bills from a single location. According to a 2009 Javelin Strategy & Research study, 70 percent of online households pay bills via the Internet every month, while only 38 percent have viewed an e-bill at a bank or consolidator site. Javelin's 2010 Green Billing Report finds that nearly half of consumers would be motivated to switch to online billing if there was a single online site that consolidated statements. The average consumer receives about 12 bills per month and typically five or six of them are available online.
Angeline DePauw, director, remittance processing at Verizon, says the phone giant has made paper-free billing a top priority this year. "In online payments we're doing ok, but to get customers to suppress the paper bill is harder," she says. Verizon sends out 22 million bills a month and its goal is to make 1.2 million of those paperless. This will provide a cost advantage - in the pilot, the cost of an EBIDS transaction was typically 13 cents. The price of a paper bill includes the cost of a postage stamp and of processing a paper check. DePauw believes that getting a clearinghouse involved helps decrease exceptions and should help drive more banks and billers to participate. In the wake of the pilot, "Now it's a real thing to everybody," she says.
Bank of America has expressed support for EBIDS. "Between greater convenience for consumers and greater efficiency for corporate billers, EBIDS will offer significant benefits as billing and payment preferences migrate from paper to electronic format," said Aileen Gleason, product management executive at Bank of America Merrill Lynch, in a statement. "We look forward to working with The Clearing House as this service evolves from a pilot program to production."
NACHA is currently building a biller directory that will provide information about online billers to all participants. NACHA will focus in the future on making EBIDS scalable, Estep says. "It will be most effective if it reaches small billers and utilities and infuses efficiencies there."
For banks that already offer online bill payment and presentment, adding EBIDS into the mix should not be difficult, executives say. But the consumer financial institution that doesn't have online billing already will have to add consumer interaction, bill payment rules and other front-end work as well as a back-end connection to EBIDS, making it a major undertaking.