Banks and billers face a muddled environment of electronic and paper-based processes.
The latest technology merges mixed payments and streamlines conventional transactions.
The Slow Arrival of Electronic Remittance
"The typical paper-based billing process is made up of a series of time-honored
steps handled in sequence by various manual and computer-aided methods. First
a firm's billing information is aggregated, stored and sourced for billing data.
Then actual paper bills are printed, mailed and delivered. When received by
customers, these bills are then reviewed, exceptions are noted and contact with
payees may be necessary to resolve differences. Next, checks are written, records
are maintained, postage is applied and payments are delivered. Finally, the
biller and the payer's bank or financial institution exchanges payment data
for instream account reconciliation." Buy Now, Pay Now: Internet-Enabled
Billing Comes of Age", Zona Research, March 2001.
Sounds complicated, huh? It's expensive, too. The round-trip cost of generating
a single paper bill, invoice or other form of remittance and processing the
payment and paperwork that comes back is approximately $1.90, according to Jupiter
Communications in New York.
Moving to an all-electronic EBPP (Electronic Billing and Presentment) remittance
system could save businesses a serious amount of money. Jupiter estimates that
electronic remittance systems can be operated for about 20% of the price of
a comparable paper-based system. This translates to a savings of almost $1.20
per bill. Jupiter estimates that going electronic could save US businesses a
whopping $18 billion per year.
So if the numbers are so compelling, what's taking us so long to dump the paper?
Read on and we will explain why EBPP has been so long in coming; describe some
of the hurdles faced by those working in a world in which electrons and paper
clash; and provide a few tips about steps your company or clients can take to
make the inevitable transition go a little bit more smoothly.
with Mixed Payments
of EBPP Systems
the Check & List Problem
Glossary of Banking Terms (from one of Joe Devlin's earlier banking articles)