If you read the trade press, you might think there is only one way to offer online bill payment services; sign a long-term deal with Checkfree and hope for the best. Not so. There are dozens of ways to use the Web and e-mail to ease the bill payment chore for consumers and businesses.

The next time you brainstorm new services and product enhancements, try thinking of yourself not as provider of checking accounts, but rather delivering payment simplification or payment assurance services. For a moment forget the regulatory constraints and operational realities you face and think like an Internet start-up. What could you do, on- or off-line to ease the hassles of paying the bills each month?

Consumer Bill Payment Needs

•  Same day posting so consumers can pay on the last possible day
•  Confirmation of payment received/posted (from biller and/or financial institution)
•  Guaranteed no-bounce checks (e.g., overdraft protection)
•  Guaranteed payment delivery, especially on obligations that have serious consequences when late (mortgages, loans, credit cards, insurance premiums)
•  Choice of payment options (multiple checking accounts, credit cards)
•  Simple to set up and change automatic payment options
•  Convenient bill delivery (pushed to the desktop rather than requiring a trip to the Web)
•  Anytime, anywhere access to the bill and payment mechanism
•  Absolute control over the timing and amount of payment
•  Privacy protection so no one has access to my payment records
•  Security/fraud protection so that no one vandalizes my good standing with billers or steals from my bank account
•  Cost savings (less than a stamp makes it easier to sell)
•  Integration with personal finance record-keeping systems or small business accounting programs
•  Ability to perform statement analytics, for example comparing current bill with historical bills
•  Reduce time spent paying bills
•  Reduce the anxiety surrounding the billing cycle; e.g., Did I pay it? Did the post office deliver it? Where is that bill anyway? Did my spouse pay it?
•  Assurance that the biller has billed the correct amount
•  Responsive customer service

As you prioritize payment services to offer over the Internet, don’t lose sight of the fact that it will take time before users take to electronic bill presentment. At IQPC’s Internet Billing conference on Nov. 19, Intuit talked about converting 40% of bills to electronic versions by the year 2007. Intuit’s short-term forecast (per Eric Dunn, Intuit CTO) is just 1 million Internet bill presentment users within the next three to four years.

But financial institutions can use the Web and e-mail to serve even those users who prefer to write paper checks for most billing obligations. For example, send e-mail confirmations to users when large checks clear (those were probably bill payments); or provide links on your Web to customer service support areas at major billers in your market. See pages 7-12 for more ideas.

For banks there are two distinct targets in this nascent market: billers and bill payers. Each has distinct, perhaps competing needs. Billers want to maintain or enhance relationships with their consumers using the bill as a draw into their Web sites. Consumers simply want to get the bills paid with the least amount of work and maximum amount of control. It may be difficult for financial institutions to play both sides of this debate.