By William Fellows
YourAccounts.com, a new entrant in the burgeoning electronic bill and statement presentation market, claims to be up and running with $500m of business on day one. Its value proposition is that it can deliver electronic bills for between $0.15 and $0.40 depending on volume, compared to the $0.75 spent on the paper, processing and mailing of every paper bill.
YourAccounts.com is owned by – and has been incubated for three years by – Output Technology Solutions, one of the biggest suppliers of the bills and statements of the paper variety which are pushed through US mailboxes. YourAccounts.com is being set up as the long-term replacement for Output Technology’s current paper-based services as bill presentation and payment becomes primarily an online activity – at least for those households with access to the web. It decided to create YourAccounts.com out of fear and trepidation the company admitted.
Output Technology, itself owned by billion dollar computer services shop DST Inc, sends out 130 million bills a month, and claims to have won 10% of land line telco, 30% of wireless, and 35% of cable billing. It also claims to have a large hold on the mutual fund market, which transacts which still 80% of its business on paper. It believes the 100m US households receive and average of 17 bills per month.
Output Technology has set up YourAccounts.com as new division with 80 staff and seven large customers including CellularOne, Pepco and MCI, with eight others waiting in the wings. MyAccounts.com believes as many as 50 million of the 130 million bills sent out by its parent are available for delivery and payment over the internet. Killen & Associates of Palo Alto, California predicts that the electronic bill presentment and payment (EBPP) market could increase from 1998’s $2.5bn to as much as $31.7bn in 2005. The Yankee Group estimates that 1.6 million US households are using internet billing this year, rising to 4 million in 2001 and 10.8 million in 2003.
Early internet billing services were provided by individual companies offering direct dial-up payment to customers. Then companies such as CitiBank offered character-based dial-up and later a web site enabling customers to pay bills from their bank accounts to a small number of merchants including credit card companies and local utilities. This model is now being built out by other consolidators including portals such as Yahoo and financial services sites (online trading companies). Scaling and reliability are more imperative in the latter model which supports and manage multiple channels, but it also offers a much bigger opportunity to develop new kinds of customer relationships. Bell Atlantic’s bill payment web site is going to be down for the next two months because it wasn’t able to scale the system to support the 70,000 customers it has won for online billing in the last three months.
What YourAccounts is not offering is a mechanism for consumers to visit a single web site and pay all their bills which would make a great deal of sense. Perhaps that’s why this writer was inclined to write MyAccounts.com instead of YourAccounts.com.
YourAccounts.com is selling two products. Ebillanywhere is designed to offer customers a single point of contact with bill and payment consolidators (such as CheckFree and TransPoint). Instead of having to develop a relationship and technology interfaces with each electronic bill and presentation company Ebillanywhere.com can do all of this, the company claims. One service presents customers bills on the merchant’s site; a second provides routing and transmission to multiple consolidators; while a third offers business-to-business billing.
A second set of products called Vista is aimed at the financial services industry. Yankee Group estimates that 7.5 million US households are online now, 14.5 million in 2001 and 24.6 million by 2003. Investor is designed to send statements and other account information to investors. Broker delivers statements with sales leads to brokers, while Compliance offers low-cost delivery of documents companies must send to customers to conform with SEC rules. MyAccounts.com says the number of brokers is booming simply because of the amount of money being poured into personal financial investments.
Both sets of products are outsourced services. YourAccounts.com uses CyberCash for the payment element claiming most customers prefer this method for bills to be paid rather than credit cards on which they lose 3% of the transaction fee. It counts CheckFree, CableData, Convergsys, Intuit, NetGravity, TransPoint and Bank of America as partners.
YourAccounts.com charges $25,000 to $250,000-plus for the basic professional services it requires customers to purchase. Ebillsanywhere is available now; Vista investor is due in the first quarter; and Vista broker and compliance by the middle of next year. Prices go from $1.50 to $0.40 per transaction depending on volume. The company believes customers will always be offered a choice on paper or online bill presentation and payment option – or both.
Some analysts believe the online billing and payment boosters are getting a little ahead of themselves. Meta Group suggests that consumers are not demanding bill presentment. Some online billing and payment services have been developed to the point where they are now useful and convenient and offer web-based access rather than dedicated dial-up. However, the rate of uptake of these services has been slower than the industry’s expectations because of the required consumer behavior modification, Meta says. Receiving bills electronically is very different letters in the mail. Do consumers check their email as regularly as snail mail? While it promises to save paper bill creation and distribution costs and Meta believes that given a lack of consumer demand, electronic bill presentation and payment will find a home first in business-to-business commerce.
