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From...
View bills with a browser, pay with a click
November
9, 1998
Web posted at: 2:45 PM EDT
by Dan Miller
(IDG) -- Paying bills online is a pain: You get the bill in the mail, go to your bank's Web site, and fill out a form that explains how much you owe and to whom. After you click the button to initiate payment, your bank may take days to actually transfer the funds; in some cases, it'll have to send a paper check by snail-mail.
No wonder banks and bill senders are hailing something called bill presentment. Currently offered by only a few banks around the country but expected to proliferate over the next 12 months, bill presentment lets vendors send bills electronically. Here's how it might work: When you log on to your bank's Web site, you'll see a list of pending bills. Select one for a summary of the month's charges. Click again for the details -- individual calls on your phone bill, individual charges on your credit card. If it all looks okay, you just click a button, and the bank settles the bill instantly via electronic payment.
Sounds great, all right. But as bill presentment programs roll out across the country, they have several hurdles to clear before you'll want to ditch your checkbook.
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Vendors wanted
To begin with, banks and billers have to get with the new program. Two companies -- CheckFree and TransPoint (links below) -- are leading the way. For several years, CheckFree has offered end users an online bill payment service, through banks. TransPoint is newer, the result of a joint venture among Microsoft, First Data, and Citibank. Both act as intermediaries, conveying billing data from billers to the banks. CheckFree and TransPoint will offer bill presentment services at their own Web sites, but they would rather stay behind the scenes, letting users view and pay bills at their banks' sites.
Every bank will set its own fees. CheckFree plans to charge a flat fee of $10 a month, covering a customer's first 15 payments; each additional 5 payments will cost $2.50.
CheckFree has programs up and running with Chase Manhattan, Wells Fargo, and Banc One; it expects to have similar arrangements for its other 300 client banks around the country operational by late next year. TransPoint is still in the pilot phase. Agreements have been inked with Wells Fargo, Norwest, Banc One, Mellon Bank, Citibank, and Merrill Lynch; the company will begin its nationwide rollout in the first quarter of 1999.
Note the overlap: Individual banks will likely work with CheckFree, TransPoint, and any other company that can deliver billers. That's because online bill presentment won't work unless masses of vendors participate, presenting charges and accepting payments electronically. Initially, bill presenters are focusing on utilities and financial services: CheckFree's billers include AT&T, BellSouth, Chase Credit Card and Mortgage, and Southern California Edison. TransPoint vendors include Browning Ferris Industries, GE Capital, The Hartford Financial Services Group, J.C. Penney, Mobil, and Shell Oil.
Standards needed
If banks, billers, and presentment services like CheckFree and TransPoint can agree on a common language for delivering bill information electronically, it won't matter who sends you a bill or who's presenting it. The Open Financial Exchange standard (or OFX) is the leading candidate to become the lingua franca of online bill payment. Coauthored by Microsoft, CheckFree, and Intuit, OFX would also permit consumers to download billing data to their personal finance programs: Quicken and Microsoft Money are both OFX compliant. OFX addresses security concerns, too. The standard is compatible with Secure Sockets Layer (the leading Internet security protocol) and digital certificates (guaranteeing the identity of billers and payers).
If proponents of presentment can assuage consumers' fears about online security, the key issue will become critical mass--getting enough billers to participate. The average consumer receives 12 bills a month, but most banks today can at best present bills from two or three vendors in a given region.
If you're lucky, your billers will get involved early and establish presentment links with your favorite financial institution. If not, you'll probably want to hang on to that old checkbook and pen for a couple of more years.