Right now the payments come in all forms, and they come by the hundreds and thousands.
Newfoundland Power Inc.’s customers can pay bill by walking up to the company’s cash counter, mailing in cheques or paying through their bank, using telephone banking, automated bank machines (ABMs) or old-fashioned tellers. Currently only about 10 per cent of the St. John’s-based company’s customers pay electronically over the Internet, and it is that number the utility company hopes will increase.
Newfoundland Power will be one of a handful of companies participating in an electronic bill presentment (EBP) project being tested by six of Canada’s largest financial institutions (FIs).
“With this billing option, we’ll see the take-up (of electronic payment) increase,” said Lisa Hutchens, finance manager at Newfoundland Power.
The current method of collecting payment is very labour intensive, she said, and she hopes electronic bill presentment and electronic payment will eventually mean a savings for the company.
“There’s some potential to achieve cost-savings in our bill processing,” she said.
Hutchens believes many customers will one day prefer electronic bill presentment and she wants Newfoundland Power to be at the forefront in adopting the technology.
“We’re really keen on learning how this technology is going to offer our customers more choices and more convenience in terms of electronic billing and payment options, because we really believe customers are going to demand this in the future,” she said.
The pilot project is scheduled to begin sometime in September and 50 of Newfoundland Powers’ employees, as well as employees from the FIs, will be participating.
The banks, which include Canada Trust, Canadian Imperial Bank of Commerce, Mouvement des caisses Desjardins, National Bank of Canada, Royal Bank of Canada and TD Bank Financial Group, formed a new company called e-route inc. The company will provide the banks with the technology and infrastructure needed for their electronic banking requirements.
The banks got together in order to achieve critical mass for the project. “It’s just not economically viable for any one financial institution to do this on its own for many reasons – the cost of the technology is one reason. You would need to present lots of bills to lots of consumers, and no one FI, by itself, has [enough] billers or consumers,” said Terry O’Grady, senior manager of special initiatives at Royal Bank in Toronto.
The Toronto-based e-route uses Microsoft Corp. technology. The electronic bills can take different forms depending on the preferences of the bank and the biller. They can be simple electronic recreations of current paper bills, or they can come with ads and service options, such as customer history. The latter option can let consumers view their bill history, letting them track their power use patterns over time, for example. Consumers might also be given the option to tailor the bill to their preferences – for example, they could choose to view just the bill summary, or they could receive a very detailed bill.
The EBP architecture will be fully integrated with the Royal Bank’s current electronic banking options. Consumers currently paying their bills electronically will soon be able to view them at the same time.
Processing electronic payments automatically will be a lot cheaper than working with paper payments, such as those made through ABMs, O’Grady said.
Billers may also have the option of sending e-mail notification that the bill is at the site. This is an option that Newfoundland Power is still considering, but those e-mail addresses mean the company will have to track even more data, Hutchens said.
Installing an EBP architecture at a biller’s site can take four to six weeks for a small to mid-sized company and three to four months for a larger biller, depending on how simple or sophisticated they want their bill to be, said e-route CEO Bryan Kerdman.
The banks are not the only organizations to enter the EBP market, but Kerdman believes FIs have more to offer billers because they already have an electronic payment system in place.
“We’re building an electronic bill presentment mall, a shopping mall, but we already have shoppers. Our competition is building a mall, and other people are building a mall, but then they have to go find shoppers and so that’s why we think ours is a better solution for the billers,” Kerdman said.
There are currently one and a quarter million customers paying their bills electronically to the six participating banks, according to Kerdman. e-route hopes to make the EBP option available publicly next spring.