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.