PayMyBills.com

www.paymybills.com

Company: Pasadena, CA-based PayMyBills.com is another start-up from Bill Gross’s idealab! which has spawned 22 Internet companies including, CitySearch, eToys, and

Goto.com. In addition to venture capital, idealab! provides office space and the accompanying network infrastructure; consulting and services relating to development and technology; graphic design; business strategy; branding; corporate structure; marketing services; and competitive research. This is idealab’s second financial services company, the first is eWallet (aka Launching Pad).

Product: Scan-and-pay electronic bill payment with integrated pay-anyone capability. Also includes rules-based automatic payment, electronic archives, email notification, and $100,000 SafeWeb insurance.

User Benefits: Throughout its Web site, the company does a good job explaining how its service differs from current bill payment programs, which they call “online banking:”

Online banking basically offers you an electronic checkbook service. You don't have to sign checks, but you still have to manage the entire bill paying process yourself. PayMyBills.com provides a complete bill management service. PayMyBills.com can receive your bills, organize them online, and let you decide who, when, and how much to pay.

To boost credibility, users are automatically covered by SafeWeb Remote Banking Insurance from Travelers Property Casualty. The insurance provides coverage against unauthorized bill payments in the amount of $100,000 per incident with a zero deductible. CompuBank was the first to offer SafeWeb protection (OBR 10/98). Insurance coverage is provided free-of-charge.

The company is providing a usage incentive dubbed Pennies from Heaven. Each month several bills will be chosen at random and automatically paid using PayMyBills.com funds.

Marketing Plans: CEO John Tedesco briefed OBR on the company’s marketing strategy that is solely focused around total bill management. They intend to use online and offline media to build their brand. They also hope to make inroads with companies that want to offer its product as an employee benefit. Interestingly, the company is not currently soliciting banks as distribution partners, but will consider it if there is interest.

Price: All users pay a single rate, $9.95/mo for the first 15 bills each month, then $0.50 per payment thereafter. A 90-day money-back guarantee is provided. But, unlike its two competitors, there is no free trial period.

How it Works:

1. User completes online application.

2. User instructs billers to send bills in care of PayMyBills.com (PMB) in Pasadena, CA.

3. PMB contracts with Imaging Acceptance Corp to scan each bill and post it to a password-protected area in PDF format (user needs Adobe Acrobat to view bills).

4. User is notified of new bill by email.

5. User establishes payment rules (e.g., if less than $100, pay it) for automatic payment or authorizes each payment manually.

6. PMB deducts the payment from user’s account (multiple accounts can be used to fund payment) via ACH five days in advance of due date.

7. PMB sends payment to biller via paper check (or via electronic payment when available) using Chase Manhattan for payment processing.

8. User receives email confirmation.

Notes: PMB emails users if bills are not received as expected; transactions are downloadable into Quicken, Money, or spreadsheets.

Customer Service: The customer service center is located in its Pasadena headquarters and is available round the clock with live telephone support available from 9 a.m. to 9 p.m. The director has call center experience at another idealab! company, CitySearch.

Contact: Robert J. Nighan is Manager of Travelers Bond Financial Services. Bill Gross is idealab! CEO. At PayMyBills.com, co-founders Jeffrey Grass is VP Customer Contact, and John Tedesco is CEO, (626) 535-2848. Address: 130 West Union Street, Pasadena, CA 91103

As we said in our analysis of CyberBills (OBR 3/99), “we think (CyberBills) is on to something big, VERY BIG…you should take a close look at what (CyberBills) has to offer (as a service provider).” The same is true for PayMyBills.com, which may have an even better service, at least on paper. As you can see from the comparison chart about CyberBills and PayMyBills.com are virtually identical in most categories.

Although we have yet to test operational or customer service performance, PayMyBills.com looks to be the frontrunner of the threesome. We especially like the commonsense approach to explaining the new process and its benefits and the bill payment calculator (screenshot below).

“How the Service Works” is a masterpiece of copy writing, using just 62 words and a light touch.

The first bill payment savings calculators we’ve seen. While it doesn’t have the utility of a mortgage refi calculator, it makes sense to provide as many tools as possible. The form allows users to calculate the “true” cost of paying bills including the value of their time.

Note: The asterisk in the lower righthand corner of the above screenshot provides these three numbers from a 1998 Jupiter Communications study: consumers spend an average of two hours doing bills each month; the average cost of a paper check is $0.06; consumers annually incur an average of $42.00 in late fees. In press material, the company says that consumers spend an average of two to three hours; $46 on postage; and $144 on check-writing expenses to pay 12 recurring bills each month.