Robert Unger, NACHA
Electronic bill presentment and payment (EBPP) is the electronic presentation of recurring statements, bills, invoices, and related information sent by a company to its customers, and the corresponding electronic payment for goods or services. EBPP is a promising customer service innovation, and many utilities now offer this service as an alternative to paper bills and check payments.
Billers (i.e. companies that send bills to consumers like utilities) motivated to implement EBPP services typically expect to:
- reduce costs related to printing, processing, mailing paper, and call center support;
- increase processing efficiencies;
- improve cash flow and receivables management;
- expand cross-marketing opportunities;
- project market leadership.
These potential benefits make EBPP seem inevitable, but only to billers. It takes two to make EBPP work. Namely, the biller has to offer the service, and customers have to use it. Overall, consumers are choosing not to use EBPP. Many billers are perplexed by the lack of adoption. The environment seems right considering that more than half of all Americans are online, electronic banking is up, and consumer Internet purchases are exploding. Yet, these events seem to have little effect on EBPP usage.
Simply put, biller cost savings and efficiencies do not excite consumers. No one likes to pay bills, and providing the ability to do so electronically does not make bill payment a better experience. In fact, many consumers have de-enrolled in EBPP services because the online experience proved to be worse than the traditional paper methods. The U.S. consumer market is interconnected, and biller communities overlap. A consumer who has a bad experience with EBPP is lost to the biller who did not get it right, and to all billers who want to promote EBPP because it decreases the likelihood that the consumer will try another EBPP program.
There are programmatic considerations that will affect EBPP usage. Utilities, for example, may have a more difficult time “selling” EBPP to customers due to the static nature of the billing data (meaning there is little change month-to-month). Billers with more “dynamic” data (e.g. credit cards) may be able to articulate a better need for EBPP. Yet, both types of billers can institute features in their respective EBPP services designed to provide greater value to users. Best practices, for example, may include:
- Automatic enrollment: Billers should already have customer contact and account information. Don’t make consumers enter the information. Instead, automatically enroll customers, and send them a notice with a user name and password that can be used at any time.
- Flexible payment date: Many consumers live paycheck-to-paycheck, and are concerned about losing control of funds. Let consumers negotiate a preferred date for payment based on when funds will be available.
- Payment options: Offer several payment choices, including ACH debit options (i.e. direct payment, electronic check).
- Bill delivery channels: EBPP users may prefer to go directly to a biller’s web site, others may prefer to use a consolidator (i.e. an organization that collects and aggregates bills at a single site). Billers should consider using other delivery channels to reach customers.
- Information management: Some consumers want tools to help manage data, and some EBPP services actually offer features to demonstrate how customers can budget or save money.
- Privacy protections: Concern about security and privacy remains a major barrier to greater use of e-commerce and EBPP. Billers must assure the protection of personal data.
- Customer service: EBPP programs need to provide excellent customer service features and, most importantly, develop a guaranteed process that works every time.
Given the programmatic considerations, consumer participation remains the key to realizing the expected benefits from EBPP. Yet, many billers have failed to promote their EBPP services, preferring that customers somehow stumble upon this option. Several surveys have indicated that a percentage of consumers inclined to use EBPP oftentimes do not know which billers offer the service, or how to get started with EBPP, meaning that EBPP is being “undermarketed.”
Billers need to market EBPP, and succinctly articulate the benefits for consumers in order to change customers’ bill payment behavior. The key is to identify the correct value(s) to promote for a given customer segment, and to develop specific messages for the target group. For example, the convenience aspect of EBPP, both the 24×7 availability as well as the access to historical data for record keeping, may motivate some consumers. Others may need to be “bought” by offering incentives. Some may just need education and reassurance that the process is safe and guaranteed. A comprehensive EBPP marketing program intent on maximizing usage requires the development of sophisticated value messages that target the full range of customer constituencies. Without intensive marketing, EBPP adoption will continue to be disappointing.
Unger is the director of electronic billing and payment with the NACHA: The Electronic Payments Association. He can be reached at firstname.lastname@example.org.
To learn more about EBPP best practices and related developments, readers are encouraged to participate in the Council for Electronic Billing and Payment (CEBP). The purpose of the Council is to provide an open and neutral forum for learning, education and the exchange of information about electronic billing and payment. More information on the Council is available at http://cebp.nacha.org. For more information on EBPP, the Council maintains a public education Web site at http://www.ebilling.org.