The enabling and disruptive technology of screen scraping is poised to effect a sea change in Internet billing.
In screen scraping, consumers go to a single "content aggregation" Web site and view customized news, shopping offers, personal financial data, and e-mail. Billing companies can monitor these consumers' actions to collect information they can in turn use for presentment and payment.
Screen scraping is turning many of the accepted notions about Internet bill presentment and payment completely upside down. The multiple approaches to online billing, many of which depend on yet-to-be-chosen interface standards, help explain why it has been slow to take off. Because there are so many models, consumers and billers alike are confused. Yet many pundits agree that this business will ramp up sharply when bills can be aggregated and delivered wherever and however the consumer dictates. And this is exactly what screen scraping enables.
Many organizations have tried to be the aggregation point for consumer billing on the Web, including financial software providers, bill payment processors, and bank consortiums. Suddenly, primary content holders - namely, billers and banks with account statements and balances - that have made their information available at their Web sites have access to an aggregation service that is completely driven and defined by consumers.
Billers need not coordinate with third parties or mire themselves in all sorts of contracts and proposed and evolving standards from such groups as Open Financial Exchange, or OFX, and Nacha.
This is powerful stuff for billers. All that is required is that a biller be able to register people to view and pay their bills directly at the biller's site and that permission be granted to a content aggregator to securely "scrape" and present billing information on the consumer's behalf.
This completely sucks the wind from the sails of payment concentrators, which could once argue that billers need to send their bills to concentrators because they alone have access to the broadest base of consumers and could provide a convenient point of entry. Now the ball is back in the biller's court.
Though screen scraping spells trouble for payment concentrators, it is nothing but good news for billers and their banks. It behooves banks to protect further their relationships with billers by helping them take advantage of screen scraping. When a bill-presentation screen is scraped and presented to a consumer, the consumer can click to the biller's own site for payment. Then nothing stands in the way of the biller's initiating an electronic dialogue, with both the consumer and the biller enjoying all the benefits that can be derived from one-to-one marketing.
It is imperative that billers always sign up their own customers and register them for payment. This is a step that should never be delegated to a third party, even to a content aggregator. It is this registration that enables a biller to embed electronic payment on the electronically presented bill, regardless of where it is viewed. As a result, payment always comes back to the biller and its bank via the shortest and most cost-effective path (and thus yields the greatest cash management benefit). Even more important, it protects the relationship between the biller and its customers, a relationship that thrives on minimal intermediation. Finally, the enrollment process itself can collect valuable marketing information.
Automated teller machines make a good analogy. Consumers enroll with their banks for ATM cards and can use their own banks' ATMs, other banks' cash machines, or non-bank-run machines. Regardless of where the transaction is initiated, the funds ultimately come from the registered account. A biller (or a bank with multiple major billers as its customers) can license screen scraping technology to set itself up as a content aggregator and thus a valued destination point. What's more, a biller has the inside track when it comes to promoting its own aggregation service.
The retail side of banking, with its checking account and credit card statements, is obviously in a good position to benefit from screen scraper-driven bill presentment and payment. The commercial side of banking, with tens of thousands of major billers to serve, should also be embracing the trend.
Rather than waiting for payment concentrators' models to mature and standards to gel, bankers can protect their payment franchise and leverage their relationships with major billers right now by supporting their online billing enrollment. There is no need to collaborate with competing banks or potentially competitive nonbanks. Banks that fail to act will do their customers an extreme disservice.
Mr. Crone is vice president and general manager of CyberCash Inc. of Reston, Va.