A plan by Bank of America Corp. to begin offering electronic bill presentment by yearend to California checking customers could provide new momentum to that much-hyped but still sparsely deployed service.
The bank has completed an employee pilot, launched in March, that proved it could transmit Bank of America credit card bills to consumers electronically, said Jane S. Wallace, senior vice president, in an interview last week at American Banker's Online '99 conference. She said she expects billers other than Bank of America to be sending bills through the system in time for the rollout.
"We're going like gangbusters," Ms. Wallace said.
Banks are pushing to bring bill presentment to market fast. They want to catch up with nonbanks that have courted corporations for what the banks view as essentially a cash-management service. The industry leader, Checkfree Holdings Corp., has signed dozens of corporate billers.
Bank of America will bring its services to market at about the same time as Spectrum, a joint venture of Chase Manhattan Corp., Wells Fargo & Co., and First Union Corp. Spectrum has also said it plans to have bill-presentment services ready by yearend. Ms. Wallace has said she is open to B of A's becoming a member of Spectrum, which is soliciting banks to join.
Spectrum works much like an ATM transaction switching system, connecting corporate billers to retail customers. It would eliminate the need for bilateral connections between individual banks.
Bank of America is working on increasing the number of bills its customers can receive. In the first such partnership for the bank, it announced at the end of last month that it would present bills from companies that work with Billserv.com Inc. and YourAccounts.com. Those are service bureaus that format billing data for the Internet and distribute it to places where customers can get it.
Bank of America has historically been aggressive when it comes to billing services. Since 1983 it has processed bill payments for California customers on an in-house system, one of only a handful of banks in the nation to do it that way. It uses Checkfree to handle payments for customers outside California.
Seventy-two percent of Bank of America's bill payments are executed through electronic connections with recipients, which are far quicker and less error-prone than manual payments. That rate is significantly higher than the industry average of 41%, Ms. Wallace said. She said Bank of America raised its electronic payment ratio last month to 72%, from 71% the month before. To get that extra 1% was "like the parting the seas," she said.
Building electronic connections with companies below the largest few hundred is a painstaking process. Bank of America's ability to "turn those payments on" is the result of a multifaceted, extremely focused program that requires the bank to constantly reexamine its strategy, Ms. Wallace said.
The "tremendous effort is worth it," she said, because it enhances Bank of America's overall on-line banking service, ensuring faster postings of electronic payments and fewer errors.
"We want every customer to have an excellent experience," Ms. Wallace said.