Electronic bill presentment and payment (EBPP) started showing signs of renewed life in 2003, after its introduction in the late 90s. It took a few years for the idea to take off, and industry experts are considering 2003 a success, but a high rate of adoption by we average Joes and Janes is still a number of years away.
If you examine the electronic bill payment landscape you will note that the current usage surge is largely by the Generation X demographic, in spite of the fact that a single-source option is not yet in place. Forecasters thought that banks would probably be the single-source option, but there is still no solid consolidated infrastructure among those banks that have systems in place. The way it’s working now is very much like the way automated teller machines (ATMs) used to operate, that is providing access only to certain cardholders with specific affiliations.
While banks are taking steps toward consolidating infrastructure, in 2004 we will likely see a continued proliferation of individual organizations, where each has its own presentment and payment strategies and solutions. Consumers will have to go to multiple sites to pay their bills, and for the short term will put up with that system.
For the long-term though, the single-source EBPP system is going to be the process of choice for consumers. Eventually, they’ll want to receive and pay all bills electronically from the single site, but that won’t happen until the above mentioned consolidation.
Many banks will work overtime during 2004 to educate consumers about the benefits of online banking, because it will be a cost saving to them. There is a lot o upfront costs to banks and financial institutions, the ultimate benefits of processing payments through the Fed’s automated clearing house (ACH) instead of through the Postal Service are immense. It all boils down to a cost-saving issue.
I wonder how long it will take the average entrepreneur to embrace this new EBPP? Will you and I be comfortable maintaining a web site or some type of electronic presence so that we can electronically bill our customers/clients for goods or services? Perhaps this is how our forefathers felt when Henry Ford tried to replace the horse and buggy with his auto machine, but I must say I find a certain comfort in the good, old-fashioned “paper trail”.
I must confess that I do use the electronic trail on occasion, especially when I know the mail won’t beat the due date on my supplier’s invoice, but to transact all commerce via EBPP is another matter. One must admit however, that at least 1/3 of our office space these days is dedicated to files filled with paper.
Still, that old “paper trail” is comforting – much like the cookie crumbs dropped while walking in the woods that assure us we’ll find our way home again.