Digital Billing: Show Me the Savings

After a slow start, banks are taking another look at electronic presentment and payment.

Power to the Payer

But all that ROI can be difficult to capture. The EIPP market suffers from the same chicken-and-egg dilemma that has stunted the growth of the B2C market. Until more bills are available online and in one place, businesses won’t take the plunge. And until there is enough demand for the services, billers will be reluctant to make the investment.

There are signs that the stalemate may be ending. At first glance, the supplier side of B2B transactions would seem to have the most to gain from EIPP. Not only does it reduce the cost of invoicing, it could help companies to collect payments faster and reduce working-capital requirements. So most leading EIPP software vendors, including BillingZone, Bottomline Technologies, BCE Emergis, and edocs, have traditionally aimed their offerings at billers. But it is the payers that wield the leverage in B2B transactions. Most seasoned vendors have come to realize that, and they now make their sales pitches to payers as well as billers. New vendors, like Xign Corp. and Clareon, offer “payercentric” systems that aim to put a greater proportion of a company’s spend on a Web-based platform. “Every major A/P organization needs an automated payment and settlement system,” says Xign CEO Thomas Glassanos. “I haven’t found a treasurer who wouldn’t take a 2 percent discount for paying within 10 days.”

In much the same way that dominant companies like the Big Three automakers and Wal-Mart forced their suppliers to connect with their proprietary electronic data interchange networks, “power buyers,” as Gartner’s Litan calls them, will drive the adoption of EIPP systems. Given the far lower cost of connecting with and participating in Web-based systems, they will likely have an easier time bringing suppliers along.

Banks may be aided by other entities. MasterCard’s RPPS (remote payment and presentment service) unit sees a ready market in EBPP. The bank-owned credit-card company is already the largest electronic payment processors in the country. It could serve as a hub to aggregate presented bills, process the payments, and distribute funds between banks — all with the blessing of banks. “We’re connected to 95 percent of banks and third-party service providers, and we’re a stable, profitable, neutral party,” says Cathleen Conforti, who heads the RPPS division. Given the success it’s had with corporate purchasing cards, a move into EIPP seems likely as well. Success may be in the cards for electronic payments after all.

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