The check is in the e-mail

Two things have been holding EBPP back, Y2K and competing platforms. But electronic billing is back, and this time, it means business.

Electronic billing is back—and this time, it means business.

Although it's taken a lot longer than some financial industry experts expected, many companies and banking institutions are finally rolling out electronic bill presentment and payment, or EBPP, platforms this quarter. Their goal: to develop software that lets businesses and consumers see current and past bills and transact payments online, as well as dramatically lower bill processing costs.

Research from Giga Information Group Inc. estimates that such technology can reduce bill-paying costs by 50 percent to 90 percent.

The list of companies ready to introduce EBPP systems as the year opens includes many household names.

Sears, Roebuck & Co. will roll out EBPP to its customer base this month. Also this month, Texaco Inc. will offer to its 14,000 retailers across the United States a Texaco-hosted EBPP system. Xerox Corp. plans to implement EBPP this quarter in three of its customer billing systems, thereby reaching the majority of its commercial customer base.

One of the largest printers of invoices and bills, Xerox, of Stamford, Conn., has also developed a product that it plans to sell to companies wanting to do EBPP in-house. Bill Xchange sits between a legacy system and EBPP applications and turns printed bills into e-bills. That service was released this fall.

Banks in the picture

Banks, too, are moving fast into EBPP. Cleveland-based Key Corp. expects to complete the rollout this quarter of EBPP services based on software and services from BillingZone LLC for its corporate customers. Citigroup Inc., of New York, has allied with electronic billing software provider Princeton eCom Corp. but hasn't released a rollout date for its corporate customer offering.

Bank of America Corp. and Wells Fargo & Co., both of San Francisco, are each developing consumer EBPP functionality. Bank of America, which has partnered with technology provider CheckFree Corp., is in the process of a phased national rollout that will culminate next month. Both companies are also working on corporate customer-based initiatives.

The process of developing, launching and managing an EBPP platform, however, is easier said than done.

On the consumer side, it's a chicken- and-egg situation. There must be a critical mass of both billers and consumers for the model to work, and consumer adoption has been, at best, slow.

A study by Gartner Group Inc., of Stamford, reports that almost half of 130 million U.S. adult Internet users do not want to receive bills online. Of those who have signed on, the experience has often proved cumbersome and time consuming.

Businesses, for their part, have been interested in EBPP at least since the rise of the Internet—particularly in EBPP's promise of huge operational cost savings.

Two things have held EBPP back, according to James Van Dyke, an analyst at Jupiter Communications Inc., in San Francisco. First, when companies could have implemented EBPP a few years ago, many opted not to because, with year 2000 remediations under way, they didn't want to burden their IT departments with another major implementation.

Second, until recently the market was confused by two competing EBPP platforms—one from TransPoint LLC, a company formed by Microsoft Corp., First Data Corp. and Citigroup, and another from CheckFree.

As big companies and financial institutions rush to set up online billing systems, some are finding that their EBPP platforms could be hobbled by the same lack of industrywide standards that has slowed intercompany integration of other e-business software.

The problem is that many of the existing electronic bill presentment and payment solutions are built around one specification for sharing data, while newer systems adhere to a different, and some say more robust, specification that may be incompatible.

OFX (Open Financial Exchange) is the financial transaction standard originated by CheckFree Corp., Microsoft Corp. and Intuit Inc. and used currently by the financial industry to conduct electronic transactions.

IFX (Interactive Financial Exchange) is emerging as the newest Extensible Markup Language-based incarnation for EBPP and is being championed by the IFX Forum, which is led by major EBPP software makers.

"What this means for businesses is that they have to prepare for both," said James Van Dyke, an analyst at Jupiter Communications Inc., in San Francisco. "If [a vendor] is late with IFX, it will not help the customer."

There are major players on both sides of the standards issue. MasterCard International Inc., utilizing Avolent Inc.'s EBPP software, has based its widely used Remote Payment and Presentment hub on the OFX standard. On the flip side, Spectrum EBP LLC, a joint venture of Chase Manhattan Corp., First Union Corp. and Wells Fargo & Co., is actively pushing the IFX standard.

At the same time, CheckFree Corp., which is emerging as a leading EBPP software vendor, operates on its own standard, CheckFree Services API, which is modeled after Microsoft's message queuing.

The IFX Forum, to which all of the above belong, is trying to straighten out the differences.

According to the Forum's chairman, Mark Tiggas, who is also the enterprise e-commerce architect with Wells Fargo, there have been talks among MasterCard, Spectrum and CheckFree on ways to merge standards. "We will grandfather in OFX, because we have to," said Tiggas, in Minneapolis. "But we will support IFX."

It's not clear that there is a benefit from one standard over the other, Tiggas said, "other than IFX is more expressive—with mechanisms for richer payment information and more complete information that should reduce the number of manual processes on the billers' side."

Other issues standards need to address are workflow and dispute resolution. What also has to be decided is which standard best deals with content definition. "Being able to connect and trade data over the Internet is becoming standard fare," said Tim Henderson, chief technology officer at e-procurement software company NetCommerce Corp., in Altamonte Springs, Fla. "But being able to do that with standards that many agree to, that's where the slowdown is."

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