Bankers are divided over whether electronic bill presentment can provide new spark to online bill payment.
Some say mainstream billers are realizing the value of online bill payment, whose growth has slowed, and are growing more willing to make detailed invoice information available online. This will make it easier to deliver electronic bills to consumers, which in turn will drive further online bill payment.
Others, however, say consumers are comfortable getting their monthly statements in conventional paper form, and that trying to make e-bills more common will have little effect on payment habits.
In either case, recent deals indicate strong interest among bill-pay technology vendors for presentment capabilities, and that the presentment business may soon take off.
Jim Smith, Wells Fargo & Co.'s executive vice president of consumer Internet products, is bullish on presentment.
Wells, the industry leader in delivering monthly statements online, has more than 300 e-billers on its roster and receives billing data through both CheckFree Corp. and Metavante Corp., the top two bill-payment service providers. (Metavante is a subsidiary of the Milwaukee banking company Marshall & Ilsley Corp.) The San Francisco banking company also encourages its corporate clients to make their own consumer bills available online.
"There is definitely customer demand out there to begin to get those bills delivered electronically," Mr. Smith said in an interview Monday. "Our customers are asking for this. Once they get one e-bill, they want the second e-bill."
Online bill payment far outpaces presentment, however. Wells Fargo customers, for example, make 6 million online payments a month - 10 times the number of bills it can deliver through its Web site, Mr. Smith said.
But that measurement fails to demonstrate the shifting trends of the bill-pay business. "Probably a better metric is the growth," he said. Wells said its online banking enrollment grew 27% last year, but bill payment grew 35%, and the number of Wells Fargo e-bill customers rose 241%.
The availability of e-bills helps customers manage their finances in other ways, Mr. Smith added. Wells offers a series of e-mail alerts - when a new bill arrives at its secure site; when a payment is sent; and if no payment is scheduled - and customers can set rules to pay some bills automatically, as when a cell-phone statement is for less than $75, for instance, he said. "When you have a really tightly integrated service, you can automate a lot of it."
Some vendors are starting to exploit the ability to present bills as a way to enhance their other capabilities. In January, Siebel Systems Inc., the San Mateo, Calif., customer relationship management software company, acquired edocs Inc. of Natick Mass., a leading provider of presentment software used by billers' Web sites, for $115 million in cash.
Dan Ford, Siebel's vice president self-service and e-billing, called edocs "a perfect complement to our existing applications."
He said Siebel plans to mine the bill-presentment data gleaned from edocs' transactions to help Siebel's corporate clients understand their customers' behavior and attitudes.
"Almost every day we're finding new nuggets in edocs that have us excited," Mr. Ford said.
In December, CheckFree announced an agreement to enhance its own I-Series biller-direct presentment software by including online self-service software from Netonomy Inc., a French company with its U.S. headquarters in Boston. Both agreements demonstrate that the technology vendors see good potential to use their presentment capabilities to increase their business.
Steve Olsen, an executive vice president at CheckFree and the general manager of its electronic commerce division, said the addition of self-service capabilities to online presentment "allows us to offer a more complete solution to a biller."
CheckFree is the dominant bill-pay technology and service provider to banks, counting Bank of America Corp. as one of its most important customers. The Atlanta company also hosts biller-direct Web sites and sells its payment software to billers.
Mr. Olsen said the growing availability of e-bills will increasingly draw consumers to consolidated sites, such as banks' online bill-pay services, where they can view and pay multiple bills. This will draw business away from biller-direct sites, and will also attract consumers who until now have been happy paying bills by mailing in a check, he predicted.
"You definitely will see an uptick in adoption as new content becomes available," Mr. Olsen said.
CheckFree reported in January that its electronic commerce unit processed 219.4 million transactions in the company's second quarter, which ended Dec. 31, though it delivered only 32.8 million bills electronically. That is nearly seven payments for each e-bill presented online.
But the company noted that while payment volume grew 7% from the Sept. 30 quarter, presentment was up 11%.
Bruce Cundiff, an analyst at Jupiter Research in New York, said online payment growth seems to have slowed in the past six months, and that the market has matured since Bank of America prompted a large-scale move toward free bill-pay in mid-2002.
"We've kind of hit a wall here in the past year," Mr. Cundiff said. By contrast, "presentment is untapped."
He predicted that 90% of online banking households will be both viewing and paying bills online by 2009, but that only 50% of bills will be presented online by then.
Those trends would represent something of a reversal from mid-2003, when Bank One Corp. dropped presentment from its online banking service, citing a lack of consumer demand. It said at the time that it was discontinuing presentment to lower the cost of offering free online payment.
Representatives of J.P. Morgan Chase & Co., which bought Bank One last year, would not discuss their bill-pay strategies for this article.
Michael DeVico, Zions Bancorp.'s executive vice president of technology and operations and its chief information officer, said customers have shown little interest in receiving e-bills.
They "perceive less value in the presentment of a bill than the payment," Mr. DeVico said. "What's in it for the customer? With online payment, there's a very clear value proposition. With online bill presentment, that's not necessarily the case."
Mr. DeVico, whose company is switching its bill-pay contract to Metavante from CheckFree, argued that the real tipping point for presentment will not come until consumers can receive most of their bills online and billers can turn off paper statements for most of their customers.
Online payment, he noted, took nearly a decade to become popular with consumers. "We've been doing it a long time, and it is just beginning to enter the mainstream."
The same is likely to be true of presentment, Mr. DeVico said. "That will just take a little more time."
