Electronic bill presentment and payment took center stage last week at the Treasury Management Association's electronic commerce conference in San Antonio.
Peter J. Kight, chairman and chief executive officer of Checkfree Corp., said in his keynote speech to 700 bankers and corporate executives that the ability to present bills over the Internet give this back-office function a much higher profile.
"The billing function is no longer administrative," he said. "It is strategic," and will open up new marketing and communication channels with customers.
The full consequences of the change are difficult to grasp, he added, which may be why "too many of the bankers in the country are trying to slow down the Internet.
"I am here to tell you it isn't going to work. You are not going to slow it up."
Checkfree said recently that it had taken a step toward speeding the progress of Internet billing by agreeing to deliver bills through an undisclosed Internet portal site.
On the occasion of that announcement, Mr. Kight said, he arranged for a battalion of public relations people to answer an expected rash of angry calls from banks that might have considered themselves Checkfree's primary channel for delivering bills.
Mr. Kight said he breathed a sigh of relief as it became clear that many bankers were supportive of his dealings with the portal, rumored to be Yahoo Inc.
"The calls that came in were saying, 'This is the right thing to do, we need to play, we couldn't get there on our own,'" Mr. Kight said.
Daniel Nolle, a senior financial economist at the Office of the Comptroller of the Currency, had an optimistic message for lagging bankers.
Many of the conference sessions, he said, were "not on emerging payment options, but on existing ones" that have failed to live up to expectations. "Potential participants have not completely missed the boat."
Banks that have "not gotten on board with this are not that far behind," he said.
They have until 2001 to jump in, based on a prediction of the Treasury Management Association, a sponsor of the EC '99 conference along with the National Clearinghouse Association. That is when a critical- mass of billers will be presenting bills electronically, said Arlene Chapman, director of payments and standards at Bethesda, Md.-based TMA.
The movement is slowed by billers' having to confront a host of diverse bill payment and presentment models. "I do not think there is a consensus," Ms. Chapman said.
Houston Power and Light Co. is "probably" going to use a consolidator model, which requires it to pass summary details to various portals and banks, said Cassi Gittings, product manager. The utility's bills would be consolidated with those of other providers.
Specific billing detail would be maintained at the utility's Web site, giving Houston Power and Light an opportunity to cross-sell products to customers who go there.
Ms. Gittings said the utility must develop partnerships with bill consolidators and banks because "there are just not a whole lot of reasons for (consumers) to go to our Web site."
An alternative approach would be biller-direct, in which customers must get and pay bills at a biller's site. A third is the desktop consolidation model, in which bills or bill notifications from many billers are e-mailed to personal computers.
Nolan L. North, vice president and assistant treasurer of T. Rowe Price & Associates and a member of the TMA's Payments Advisory Group, put in a plug for the Financial Services Technology Consortium's E-check.
He called the e-mail-based analog for checks "a fascinating development. It reduces costs all through the system. There is no paper involved, and there is no lockbox."
The problem is that it is "a very closed system," he said, requiring software and hardware installations by all parties involved in a transaction.
A 12-month pilot of E-Check, involving the U.S. Treasury Department, BankBoston, BankAmerica and 50 contractors, is expected to end in June.
Brett Smith, project manager at Treasury, said the goal is to hit 1,000 transactions a day - potentially $1 million in volume.
"We expect it to start going commercial effective in year 2000," said Linda Coven, senior product manager at BankBoston.
Accounts of the death of the SET credit card payment protocol have been greatly exaggerated, said Alan Clark, market segment executive at International Business Machines Corp.
The Secure Electronic Transaction standard, designed to authenticate all parties in an on-line card transaction, has a business value that will grow over time, he said.
Internet merchants are currently comfortable with SSL, the Secure Sockets Layer standard, which assures that transactions move unmolested from point A to point B. The problem is that SSL does not vouch for the validity of those points.
"If fraud grows, it will become pretty costly," Mr. Clark warned. Then, he said, merchants will "start pushing for SET." He said 50 credit card processors and 75 banks are using SET, mostly in Europe.
"When the baby was born, our customers-the banks-declared it ugly," Mr. Clark said. "We are doing a few things to grow the baby, and we are starting to put a little makeup on it so it looks a whole lot better."
