Metavante Corp., which added 50 billers to its online bill-pay network in 2004 and expects another 100 to join this year, is adding a pretty big one.
The distribution deal Metavante announced Tuesday with AT&T Corp. pairs it with one of the nation's largest consumer billers.
Metavante, the technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp., is the No. 2 bill-pay processor. It can connect a biller to 3,000 banks.
That is a valuable capability for AT&T - which has agreed to be sold to SBC Communications Inc. for $16 billion - even though many of those banks do not provide electronic presentment, said Ed McLaughlin, a Metavante vice president in charge of marketing and business development.
"For them it's all about reaching their customers," Mr. McLaughlin said.
Online bill payment's growing popularity is prompting billers to expand distribution of their electronic statements, Mr. McLaughlin noted. He said presenting monthly bills electronically could get more people to stop using paper statements and checks.
Metavante's rivals, of course, are pursuing similar partnerships to boost online payment volumes.
Princeton eCom Corp. of New Jersey, the No. 3 bill-pay vendor, said the growth of its roster of biller clients was a key factor in the company's 40% revenue increase last year.
Ronald Averett, Princeton eCom's president and chief operating officer, said it landed 34 new biller clients in 2004, including six that signed for presentment as well as payment services.
More biller deals are in the works and the company is "very confident" it can increase revenue 40% a year for several years, Mr. Averett said.
"There is still a phenomenal amount of opportunity in the marketplace."
Biller deals can be limited to payment (having people submit payment to the biller through a bank's bill-pay Web site or the biller's) or can also include presentment through banks that support the service.
Mr. Averett said one of Princeton eCom's key upselling goals is to get billers that use only the company's payment services to add presentment.
Both Metavante and Princeton eCom say billers increasingly are presenting statements on their own Web sites and also sending the statements - or at least summaries - to consolidators. The consolidators include banks that can receive statements from numerous bill-pay vendors and then present the data to consumers.
James Van Dyke, the principal analyst at Javelin Strategy and Research in Pleasanton, Calif., said these types of distribution deals will be increasingly important. The more bills they pay, he said, the more they like the convenience of viewing and paying them from a single site.
"Consumers have voted in the surveys in favor of the consolidator model," Mr. Van Dyke said.
Many billers seem equally interested in electronic presentment. Kevin Breen, a vice president for AT&T billing management, said in Metavante's press release that the Bedminster, N.J.-based company expects savings up to 20% "compared to paper bills by adopting the Metavante Payments Network."
Mr. McLaughlin said AT&T, which has millions of customers, posts statements to its own Web site and has distribution arrangements with some of Metavante's bill-pay rivals.
These include CheckFree Corp., which has worked with AT&T since 1999 and is the leading provider of electronic bill payment and presentment. The Atlanta company raised its earnings guidance in January, pointing to strong growth in its transaction business.
CheckFree spokesman David Fontaine said AT&T was one of the telecommunications company's first e-billing customers. He would not talk about what CheckFree's bill-pay competitors are doing, but he noted that many of AT&T's 300-plus biller clients accept payments in several ways, including checks mailed to lockboxes, online payments, and walk-in locations. Delivering bills through multiple channels is an extension of that strategy, he said.
Some analysts remain skeptical that consumers will give up paper statements in favor of e-bills.
Bruce Cundiff of the New York technology consulting firm Jupiter Research said that depending on the industry, only 5%-20% of customers have been willing to switch to online presentment.
Cell phone services, for instance, seem to suppress paper statements better than the local natural gas provider does, Mr. Cundiff said. "There is a hard ceiling you're going to hit on the conversion rate."
Increasing the adoption of electronic statements - something banks, bill-pay vendors and billers all want - could be difficult, Mr. Cundiff said. "Is there a model that can result in increased conversion of the consumer base? To date we haven't really seen it."
