From...

July 15, 1999
Web posted at: 10:51 a.m. EDT (1451 GMT)

by Ken Popovich

INTERACTIVE Are you doing your banking online? Yes No View Results

(IDG) -- While most of us have heard: "You've got mail," you may soon be able to hear another call: "You've got bills."

Many of us still pay our bills the same way our parents did. We collect and sort them, giving priority to those with late payments looming. Then we put low-tech pen to paper, scribble out checks, and stuff them into envelopes. (Don't think about all the chemicals you've ingested licking envelopes and stamps every year.)

Americans spend, on average, 2 hours a month paying the 18.2 billion bills they get annually, according to Tower Group, a market research company.

But electronic commerce is helping fuel changes that could reduce this time-honored task to a mere unpleasant memory. By 2003, an estimated 40,000 service companies will issue bills and accept payments over the Internet, says a recent study by Killen & Associates.

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A few options are appearing already. PayMyBills.com is launching a Web-based bill-paying service this month that makes electronic transfers from your checking account to participating services. Microsoft Money and Intuit's Quicken money-manager applications provide some bill-paying functions, including the option of printing out checks. Also, some banks accommodate loan payments online.

"On the Internet, you're able to track your accounts, check your balance, transfer funds around, buy stock, do a full range of traditional activities online. There's really no reason why people shouldn't be paying bills electronically," says Stefan Smith, an Internet analyst with Dataquest.

Early One-Stop Service

However, some drawbacks remain for widespread electronic bill-paying. Web sites are not uniform in the way they handle financial transactions. And while most retailers ask customers to fill out personal information forms, some require credit checks and force buyers to secure log-on names and passwords to conduct future business.

But new methods of electronic billing and payment may soon make bill-paying as easy as one-stop shopping. Imagine the convenience of going to one site to pay your car insurance, grocery, and utility bills, as well as resolve any billing payment questions.

PayMyBills.com is launching one such service. The one-stop service idea is also touted by Checkfree, as well as by TransPoint, a joint venture of Microsoft, Citigroup, and First Data. Both companies are quickly signing up many of the nation's biggest billers in a bid to create portal-like sites where you could access most of your personal billing accounts and handle various financial transactions from one spot.

Cheaper, Faster, Better?

Both the billing companies and payers may benefit. Billing over the Internet could significantly save costs for corporations. It costs from 85 cents to $1.50 to print, process, and distribute a paper-based bill, by one industry estimate. The cost of sending and receiving an electronic bill, by comparison, is about 40 cents. You'll see your savings in postage and check-processing fees.

"Obviously, corporations want to migrate to it because it's cheaper," says Rob Sterling, a financial analyst with Jupiter Communications. "Consumers, as we've seen, have an interest in conducting their financial affairs over the Internet," he adds, citing the popularity of online stock and mortgage brokerage services.

Aside from saving money, electronic transactions could reduce hassles, says Jules Street of Killen & Associates.

"The beauty of this is the convenience, and it takes away many of the hazards of standard payment methods," Street says. "It takes away some of the problems of having to worry when to post a bill. You take away some of the risk of late payments."

Control and Freedom

The control appeals to consumers, says Laurinda Wilson, a Checkfree representative.

"You feel like you've got so much control. It's like, I'm seeing this where I want, when I want. And I'm telling the payment to go on whatever day," says Wilson.

For example, you could set up your payment schedules before you go on an extended business trip or vacation. A system that lets you designate when exactly to pay various bills could alleviate worries about late payment penalties or missed payments that might damage a credit rating.

Considering all the benefits to both parties, it's only a matter of time before electronic billing replaces traditional bill-paying methods, says Ralph Young, a TransPoint executive vice president.

"Over the coming years, consumers will see all of their bills disappear from their U.S. Postal Service mailbox and appear electronically in an electronic in-box over the Internet," Young says.

"What's really going to make this industry take off and make it very convenient for consumers, is that they'll be able to go to one location and get all of their bills as opposed to having to go to each individual company," Young says.

Of course, while no technological innovation could ever make paying bills anything less than an unpleasant chore, the advances toward new billing and payment systems may ultimately save consumers money and allow more time for other activities, such as shopping and generating more bills.