Online Billing: Savings Oversold?
Public Utilities Fortnightly Spring Supplement (07/00) Vol. 75, No. 7 p.32; Worhach, Denise

While all in the electronic bill presentment and payment (EBPP) business have yet to see a profit, none are doubting that they will. Analysts believe that by 2005, EBPP-related services will have grown to a $500 billion market. Right now, about a third of many utilities' customers have access to the Web, and are expected to be attracted to the prospect of e-billing because of its convenience and value-added services. For utilities, EBPP offers the prospect of huge cost savings, and another avenue to gain on competition through better customer service. Paper bills cost about $1.25 per bill, including stuffing, posting, and meter reading. In contrast, e-bills cost about 40 cents per bill, and have the added cost advantage of not being as prone to inaccuracies or late fees--both of which cost utilities money. Last year, the number of utilities offering residential customers online payment did not reach 10 percent. However, over 50 percent of utilities say they are planning to begin offering EBPP in the near future. Some analysts advise utilities planning such a move to go through a third-party professional EBPP service. However, they warn against using "pay anyone" services, although those services can work if each payment is sent directly to the utility's accounts receivable/cash receipts section. Utilities should also plan to move slowly and not expect too much of an adoption rate from customers at the very beginning. Finally, in order to get the true value out of EBPP, utilities cannot depend solely on cost savings but must be innovative in the sorts of value-added services they offer their online customers.

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