SAN FRANCISCO - The longer Richard K. Crone talked about online bill payment, the quieter the roomful of bankers became.
Mr. Crone, vice president of the technology research firm Dove Consulting Inc. in Boston, was explaining how consumers could go to billers' Web sites to view and pay their bills free. The implications of this were not lost on the bankers: such an approach could scuttle their plans to earn fees by consolidating bills at their own sites.
Citing a Gartner Inc. statistic that 32 million Americans already view at least one bill each month over the Internet, Mr. Crone told participants, "Folks, this is mainstream. This has happened, and it has happened at the biller's Web site."
Mr. Crone, who appeared at Thomson Financial's Electronic Bill Payment and Presentment conference here last week, was not the only speaker to point out the gains that billers have made in offering EBPP, a service that bankers covet. But some of the experts disagreed with the gloomy outlook and said bankers can still make e-billing work.
They will have to compete against billers whose business case enables them to offer the service free, as well as with a coming generation of secure e-mail services that will deliver detailed statements straight to the consumer's in-box.
But at least one hurdle has been cleared. The number of online users proclaiming no interest in EBPP represents a far smaller slice of the population than in the past.
Peter Kight, the chairman and chief executive of CheckFree Corp. and a keynote speaker, shared the results of a survey performed by Harris Interactive that found that 18% of online users are active in bill payment. Five percent were enrolled but not active, 16% said they felt "compelled" to do it now, and 25% were somewhat interested. The remaining 36% said they had no interest and less than 1% claimed to be unaware of EBPP.
In that sense, the fanfare is over, Mr. Kight said. "It's going to be quiet. It's not going to be exciting," he said. "People are just going to move to online bill-pay. It is becoming part of American household society."
Antony Jenkins, the chief operations officer at Citigroup Internet Payment Service, described a marketplace crowded with biller service providers, customer service providers, switches, consolidators, and other players.
"The only thing that has any clarity to it is the biller-direct model," he said.
Bankers are at a disadvantage because they must charge $5 to $10 a month to cover their EBPP costs, even though only a limited number of bills are available for presenting online. The situation "is very limiting for the market," Mr. Jenkins said.
Billers in contrast have an easy business case for EBPP. Their No. 1 priority is to reduce the volume of inquiries to their call centers, and they automatically save money if some of their customers use the bill-pay site to check a balance or verify a charge on a phone bill, Mr. Crone said.
Billers also like the idea of using billing data to get customers to keep coming to back their sites. They can pitch new products and services to their steady stream of visitors and even expand into offering other companies' bills.
"If you are the biller, you have a 'first-stop' advantage," Mr. Crone said. Billers that decide to offer aggregated bills could totally undercut banks and other competitors that want to charge customers for consolidating those bills, he said.
Jon A. Lindhjem, vice president of global markets at First of Omaha Merchant Processing, a subsidiary of First National Bank of Omaha, said he sees a role for banks to play as consolidators of bills, but "I think the biller-direct model will be more dominant."
Businesses do not want to surrender their opportunity to cross-sell to their own customers. "The merchants I deal with are very particular," Mr. Lindhjem said. "This is the chance for them to get the eyeball of the consumer, and they can sell advertising space, banners or whatever," an opportunity that would be lost if their statements were being consolidated on somebody else's Web site.
Credit card issuers are best positioned to get the first-stop advantage because consumers are most likely to view those bills online. According to Gartner, the biggest segment of EBPP customers - some 28 million of the 32 million users - is those viewing credit-card accounts online.
Mr. Kight of CheckFree pointed out, "A lot of people live on the edge of their credit cards," so they check their balances frequently.
Susan Foulds, managing director of retail online products at Online Resources Corp., of McLean, Va., acknowledged that pricing is a challenge for banks that provide bill consolidation.
Online Resources - which provides Internet banking and bill pay services to regional and community institutions - is beta-testing EBPP with First Virginia Banks Inc. and a single biller, Ms. Foulds said, and has not settled on pricing of its service.
"The end user, the customer, probably should not be charged at this stage of the industry's development," she said.
Other conferees said bankers have a strong chance of succeeding in EBPP.
"Biller-direct is great, but that's because it's the only thing out there today," said John M. Perry, the chairman and chief executive of the bank-owned switch Spectrum EBP LLP. The three founding members of Atlanta-based Spectrum are now live, he said, doing presentment only, with payment capability to come in the second quarter.
"A lot of people look for a winner. We look for incremental success," Mr. Perry said. "The success of one player tends to help everybody."
Cathleen Conforti, a vice president of MasterCard Remote Payment and Presentment Service, cast her vote for the bank-consolidator model. "I am not going to run around everywhere to hunt down my bills," she said, pointing to the relationship of trust that she, like many consumers, has with her bank.
"You may feel differently. You may say, 'e-mail me when you have a bill,' " she acknowledged. "Bill payment and presentment is not going to be one thing for everyone."
Alfred S. Dominick, the president and chief executive of InteliData Technologies Corp., in Reston, Va., said he personally pays 65 bills electronically - everything from card payments to newspaper subscriptions. "I don't want to sign on to 65 biller-direct sites. I would never do it.
"Banks don't need to feel threatened. They have a franchise, a protected franchise," Mr. Dominick said. "No one else can settle transactions other than a bank. Settlement is the ultimate control."
