Marketers hype electronic bill payments as a wave of the future, but to a couple of million people they are already part of life's routine.
I am one of these early adopters, having signed on nine months ago to test-drive a few of the available personal computer services. I have conducted about 80 transactions adding up to $12,000 via more than a dozen software applications based on the Apple Macintosh and Microsoft Windows operating systems.
This first-hand experience indicated that like many new PC and on-line phenomena, bill payment systems can demand much patience. The glitches, if not corrected, could hinder more widespread consumer acceptance.
But with a dose of old-fashioned customer service and close attention to details, the system providers could maintain their customers' loyalty while working out the kinks.
Like many on-line bill payers, I began already familiar with Quicken, Intuit Inc.'s best-selling personal finance software. When I learned that a bank I used, Crestar Bank, was one of 19 institutions to support the Intuit-based BankNow service on America Online, I decided to try it.
Because I used different types of computers at home and at work, I was also attracted by Security First Network Bank, which provided access to accounts via the Internet and proprietary on-line services like AOL and Compuserve.
Finally, I requested an application to conduct bill payments via the Checkfree Corp. service out of my account at Congressional Federal Credit Union. The latter was on the verge of a home banking test using software from CFI Proservices, which serves about 180 financial institutions.
The bill-payment habit involves a mental shift as well as a technological one.
"Most people don't pay bills through a bank, so it involves a change of behavior," said CFI spokesman Greg Myers.
"In the surveys I have seen, bill payment is sixth or seventh on the list" of home banking priorities, Mr. Myers said. Balance inquiries, transfers of funds between accounts, and E-mails to customer service representatives are higher priorities.
In the two weeks that it took for my Crestar personal identification number to arrive in the mail, the BankNow demo software had crashed.
Attempts to download another, working version from AOL were unsuccessful.
The PIN from Security First-it had a low $100 account-opening requirement, a contrast with Crestar's high balance requirement to avoid a $10 monthly fee-arrived promptly. But by then I had reconsidered the wisdom of paying bills from multiple banks.
After exploring some other bank and software options, I finally began paying bills in November, using an old version of Quicken running on an older Macintosh computer. Checkfree's $5.95 monthly charge actually encouraged me to make more payments sooner, to get the most for my fee. By February I was paying almost all utility, insurance, and educational expenses electronically. I was even paying the newspaper carrier.
Through the CFI Proservices Windows-based software, introduced this year at Congressional Federal, I was able within three minutes to download data on all cleared checks, electronic payments, automated teller machine transactions and fees, and interest.
The information is E-mailed and imported into a recently purchased Macintosh with an upgraded version of Quicken. The entire process, though a bit cumbersome technologically, eliminates paper records and makes account reconcilement easy.
The process would be much easier if either the financial institution or one of the technology providers offered a "complete solution"-one that might eventually be delivered over the Internet.
"Over time, dial-up will go away as an issue," said Paul Fiore, president of Digital Insight, a company that has helped many banks and credit unions offer transactional Internet banking.
"There are more than 5,000 Internet service providers in the country," said Mr. Fiore. "Financial institutions are realizing that it would be better to have the ISPs manage the bandwidth capacity."
Electronic bill payment's biggest drawback may be that it is sometimes slower than the mail, with several days often passing between a payment order and posting.
Float management can be a challenge.
"People are adopting bill payment at a much lower rate than home banking," said Forrester Research Inc. analyst David Weisman.
He said only 30% to 50% of home banking users send bills electronically. The various layers of paper in the process force most providers to adopt a "five-day rule" for transmitting payments, and the inherent uncertainties discourage potential customers.
"People who use it like it, but there is a limited audience for those that will actually jump in and use it," Mr. Weisman said. "What is needed is electronic bill presentment, because a company that is delivering bills electronically will also receive payment electronically."
Ultimately, even the most completely electronic system will fail if billers still require paper forms for such mundane tasks as a change of address. To reach some payees, paper checks may always be unavoidable. But the industry is still some distance from making these the exception rather than the rule.
