I was talking with Mary, not her real name, about online billing and learned that she pays her bills using her bank's pay service; however, can not view her bills with that same service. She mentioned that she views her bills online at each company's website and then transfers to her bank website to pay the bill. So I asked, "Wouldn't your rather view and pay your bill all at the same site?" If she were impolite she would have answered with the teenage favorite, when asked an obvious question, "DUH!" Of course she would love to view and pay her bill at the same site. This lead us to a conversation about the consolidator model of online billing.



In the world of online billing there are two terms which are used to describe how consumers can pay their bills. The first term, "Biller Direct" is defined as the ability of a consumer to go to a company website to view and pay their bill. This is the most used method of online billing; however, in the next few years that number will shrink dramatically because consumers don't like to go to more than four different sites to pay their bills.

Where, then, does the consumer, who wants to pay all their bills online at one site, go? The second term of online billing is "Consolidator." The consolidator provides an online site where consumers can view and pay all of their bills. A bank website that provides online bill view and pay services is considered a consolidator. Other than bank web sites are services such as mycheckfree.com that provide consolidator services.

Many companies have asked how their bills can be presented at these consolidator sites? The answer is not as complicated as one might think. First the business needs to use a service that has a distribution network. Put simply a distribution network delivers electronic bills to financial institutions or websites that provide consolidator services and are signed up for that particular network. Most of the financial institutions in the United States use the CheckFree distribution network to present bills; Metavante and Princeton eCom are a distant second and third.

Second, find a billing service provider that has access to one of these distribution networks. Currently gaining access to these networks through one of the aforementioned companies is cost prohibitive unless you are a biller with millions of monthly bills; however, if you are a biller with less than 500K bills a month you can access the network through a billing service provider.

For a minimal fee the billing service provider will set up your connection to the distribution network, then on a monthly basis the bills will be posted to the distribution network for viewing by your customers who pay online.

In recent years the ability to pay bills online has increased to the point where if a financial institution does not offer a "bill pay" option it puts them at a serious disadvantage with their competitors. In fact, a recent survey by CheckFree Corporation and The Marketing Workshop reported that, "online banking and bill payment features surpass proximity of bank branches to home as factor in selecting a bank for personal accounts."

The same survey found that more than half the homes that have access to the internet pay at least one bill online. With this information businesses that use paper bills as their main source of revenue collection should stand up and take note, why? Because if consumers are willing to pay bills online, they are certainly willing to view their bill online which means an opportunity for businesses to decrease the cost of collecting money and increase the level of customer satisfaction.

This leads us to an entirely different conversation about suppressing paper bills in favor of electronic bills and how much a company can save money by eliminating paper, print and postage. However, we are not going to cover that topic in this article.

In conclusion, more and more of your customers are turning online to pay their bills. Why not take advantage of this growing trend by presenting your bills online as well?