Killer App.

Take a poll in any Canadian community and chances are that attending to household bills will come out near the top of unwanted chores. And understandably so. Paying bills not only forces us to part with our money, but it also takes a bite out of our all-too-precious free time.

But this is about to change.

A new technology called Electronic Bill Presentment (EBP) is being implemented by BCE Emergis for e-route -- a consortium owned by six large Canadian financial institutions. EBP won't make us richer or put the entertainment industry out of business, but it will relieve some of the pain associated with attending to household bills. Reviewing and paying bills will become an incredibly simple affair, freeing up more time for leisure, just as countless other technologies and appliances have done in the past.

Canadians currently pay their household bills in a variety of ways: in person at their bank or at a store teller, by cheque through the mail, at an ABM machine, by phone or PC banking, or by automatic debit. These payments become part of our lives as an ever-increasing share of Canadians gain access to the Internet and start transacting online. In stark contrast to this evolution, however, bill presentment remains to this day almost exclusively paper-based. Utilities, telecom and cable operators, credit card issuers, department stores and all other household billers routinely mail out reams of envelopes each month. All that paper crams our mailboxes, piles up on our desks and countertops, stuffs our drawers and filing cabinets, only to end up in the blue box after a few years of hoarding. It's puzzling: most large companies have already enables their customers to perform at least some transactions electronically, whether it is a purchase, an address change or a payment. The only part of the customer relation ship that has so far escaped the digital revolution is bill presentment. This is what is about to change.

Before and After Take a typical household in our still paper-intensive world. The mailman delivers a bill every day or two. Mom, Dad, Junior or Snoopy alternately retrieve the mail. Most envelopes go to the designated spot, but some get misplaced, occasionally bringing on interest charges. Typically people don't pay all their bills using the same method: some, they remit by mail, others they pay at an ABM, while still others are paid automatically. Paying bills in person or at an ABM is a two-stage process: first we open the envelope and review the bill, usually at home, then we line up at the bank or the ABM to pay it. Once the bill is paid we face a daunting dilemma: to keep or not to keep the bill. Some of us like to maintain a record, but all that paper uses up too much drawer space. All in all, it's a tedious and outdated process.

Now consider an alternative scenario. Our bills are presented to us by our financial institution, which consolidates our accounts with our various suppliers on a single secure Web page. We access the page right from our financial institutions'Web site, with all the customary security. AS with current online banking services, we can access our bills with any browser, at home or at work, at any time. If all papers in order, we just order the bank to pay the bill from our account with a click on the mouse, or simply allow the automatic debit program to run its course. Review and payment of the bill can thus become simultaneous. On the other hand, if we wish to query the biller, we can link to its Web site or initiate a telephone call to its Web site or initiate a telephone call to its customer service department. Moreover, if we wish to analyze our own consumption pattern, we can access historical data online. No need to keep records in filing cabinets anymore. This feature can be especially useful to business customers.

Sounds easy? It is. Feels like EBP could have been around for years? That is perhaps because electronic bills seem perfectly natural now that we have become accustomed to our wired world. Obviously, their time has come.

From the Business Perspective If convenience is the catchword from the consumer's point of view, savings naturally spring to mind when considering EBP from a business perspective. Printing, handling and postage costs can be slashed. Cash management can be improved. The total cost of putting a paper bill into a customer's hand can be cut by up to half. But perhaps the greatest opportunity EBP affords billers is that is allows them to redefine their customer management processes.

For many billers, the monthly bill is their only opportunity to interact with their customers. It's a time to share information, to tell customers about new services and to cross-sell. That's why many billers currently include promotional inserts with their paper bills. These - if consumers glance at them at all - require a follow-up effort on their part. But with electronic bills, it's entirely another matter. The bill becomes a live device. By clicking on the banner ad placed right on the bill, the customer is instantly transported to the biller's Web site. There the biller can offer his customer a wealth of information and an interactive experience he couldn't possibly provide on a paper insert.

Beyond cross-selling, customer management encompasses product support, customer inquiries, warranty registration, notifications about changes to a service and so on. In short, all types of interactions between billers and their customers. EBP enables consumers to access these support functions on a self-serve basis, right from the bill. Therein lies an ideal opportunity for billers to further reduce costs and improve service. Says Terry Ham, senior VP for Financial Services at BCE Emergis: "EBP applies the power of electronic networks and computer processing to all of a company's interactions with its customers. It's so charged with ramifications that people call it, in the jargon of the industry, " a killer app."

A Stepping stone toward EC As consumers get accustomed to paying bills online, placing online orders will appear perfectly natural. EBO is just a few keystrokes away from electronic commerce. Another good reason for billers to embrace electronic bills, therefore, is to start moving themselves and their customers further along the electronic learning curve. Why? Because all industries are being transformed by electronic commerce. And only those players who will have adapted in time will survive in tomorrow's digital economy. Some industries have already changed, like retaining of books and music, as well as the computer industry itself. Others are just turning the corner, like the automotive, shipping and warehousing industries. Analysts agree electronic commerce is such an important issue in all industries, that all strategies that help businesses position themselves in the electronic commerce arena should be considered very carefully. And that is exactly what EBP does.

Brave New World

8.4 million Canadians surf the Web one or more times each week, up two million from a year ago.

Nearly 10% of all Canadian adults conducted PC banking in the past three months, up about 50% from March 1998.

Producing a paper bill and delivering it to a customer through the mail costs on average between $1 to $1.50. With EBP, billers can expect to save up to 50% of that amount.

A North American market survey found that EBP could save billers, customers and other constituents more than $2 billion US annually by 2002.

Source: Cyber Trends Spring 1999; ComQuest Research

E-route: Extending Electronic Bills across Canada

Electronic Bill Presentment (EBP) is being implemented in Canada by a consortium of six major financial institutions called E-route inc. BCE Emergis will process the transactions for the consortium, using software developed by Microsoft.

E-route's six members together own the lions' share of the consumer financial services market in Canada. In no other country can one find such a concentration of financial institutions united around a common EBP solution. Over one million Canadians already pay their bills electronically through E-route members. This enables the consortium to deliver the critical mass of consumers and the consumer confidence required to get the EBP ball rolling in Canada. The first billers to sign up for the E-route initiative were TD Visa, National Bank MasterCard, Royal Bank Visa and Bell Canada. Four electric power companies: Brampton Hydro, Maritime Electric, Newfoundland Power and Oakville Hydro, recently came on board.

All participating billers will be using the same infrastructure, so EBP is bound to become a cornerstone of the Canadian electronic economy. BCE Emergis president and CEO Brain Edwards' enthusiasm is evident: "It's one of those spine-tingling opportunities that will allow Canada to leap over other industrialized countries." E-route will be launching a pilot project soon with full roll-out expected in year 2000. E-route members hope to expand their coverage to include other financial institutions thereby making electronic bill presentment available to every consumer and merchant in Canada.