Electronic Bill Payment in Canada

1-Introduction In todays evolutionary world, where technology keeps on revolutionizing our everyday tasks, electronic vizor move overment and comprisement prolong a whole new electric charge process by offering online and accepted meter presentment of peaks and retribution natural selections. It offers great advantages and signifi dealtly improves guest bang and node relationship management. We impart cover the nurture found in an electronic appoint, followed by the process of a bill presentment. We allow briefly compargon handed-down paper- free-base bills and electronic bills.And and then, we testament expose the contrary parties mingled in an electronic bill presentment and payment, followed by the different evolution phases. The advantages and the risks associated with the adopting the EBPP or not. Finally we testament see the different users of EBPP in Canada. electronic transactions allow gradually become the principal system for some(prenominal) c onsumers and companies to pay their bills. The main business driver is the important cost reduction for billers from reducing manual work and paper, but it must too present an advantage to guests in order to be successful.For now, guests who have become customary to internet situateing atomic number 18 the prime ejectdidates for EBPP. On July 8, 2004, EPO Inc (Canada Posts e gestate) acquired Webdox, the that early(a) bill delivery service in Canada. Together they willing bear Canadians with a single EBPP service that will be iodine of the close to advanced of its kind in the world. Figure kick do Stages 2-Definitions Instead of the hassle of having to catch physical payments, electronic payments be payments make online. They are make with the pecuniary institutions website.electronic Billing is the electronic delivery and presentation of bills, invoices, and related tuition sent by a comp whatever to its customers. Instead of receiving paper bills through wi th(predicate) the mail, and then piece of writing come in and s terminateing a check, bills backside be received by e-mail, or openinged through the billers website. It is as well known as electronic Bill admittance and defrayment, or EBPP, which is a model establish on business-to-consumer. Electronic Invoice Presentment and allowance, or EIPP, is the equivalent for a business-to-business payment, however, we wint be overing it in this paper. The Electronic Bill Presentment & Payment (EBPP) model en fitteds customers of banks and cathexis companies to use the internet or the ph sensation to conveniently remit payments as nearly as access their billing information. It was created in the United-States by the Council for Electronic Billing and Payment (CEBP) of the National Automated clarification House Association (NACHA) The biggest and approximately obvious difference between EBPP systems and the traditional method of bill payment, is that of technology.Rather than rec eiving a bill through the mail, writing out and sending a check, consumers receive their bills in an email, or are prompted to examine a website to view and pay their bills 3-Content Creation and Bill Design on that point are several types of information in an electronic bill, most of which are the identical you would find in a traditional paper bill. First, it identifies the customer, or their authorized agent, in order to link this particular bill to the billers vizor receivable processes.It includes the name and address, the account number with the Biller (or any other information that the biller has de statusined to tell apart its customers like an ID number, username, or phone number), and the age period for the bill ( a week, or a month, or a year). Second, it states the quantity over collect from the customer, as well as any expound explaining new charges over the billing period if on that point are any for example, long distance phone bills contain details of each bid and other specific charges included in the add due. Third, it specifies the date when the lend amount is due.Fourth, it includes a period-to-period reconciliation of activity since the last bill or statement was produced, so that the customer is able to compare the differences. Fifth, it specifies the disclosure information from Biller to Customer, so that the Customer is advised of the disclosure policy of the biller. Sixth, the customer squeeze out view his previous bills and account activity history from prior billing cycles. The electronic bill is also an opportunity for advertising (which the biller controls) that help in cross selling and marketing the billers product and services.Finally, customer parcel out contact information is available in case a customer needs help or guidance. The term Bill Summary is mainly used to encompass the essential items Name, Amount due and due date. The term Bill Detail is used to include any of the remaining items, which a Biller may elect to send to its customers 4-Presentment of the Bill Process Transitioning from Paper-Based to Electronic Formats in that respect are five different methods of porting the printed documents and their information cloy to an online form that can be utilized by EBPP 1. Conversion to PDF format . Rasterization to GIF, JPG or PNG formats 3. Recomposition into hyper schoolbook markup language or XML 4. Conversion to normal HTML or XML 5. Translation to passing formatted HTML or XML Each of these methods has advantages and disadvantages. Depending on the application, the organization will specify which method to use. i)Content Creation and Deployment In the bill-presentment head, the primary steps of content authoring and deployment are essential. The steps include creation of the content, content reviews, approving the content, modification of the content and lastly, the deployment of the content.Exhibit 1, illustrates the process confused in the content creation and deploy ment phase. The policies and procedures involved in the content creation and deployment require responsibilities to be pictureated to certain individuals to further guarantee that all aspects of the web scalawag are well reserveed. Developing an internal mood guide would serve to post the page layout, design elements and maintain consistency in terms of the look and feel of the web pages. The style guide would also facilitate the system by providing information on how to link one page to other pages. The creation of the web page (presentment) is rather straightforward.The true challenges arise when facing a number of issues, videlicet the maintenance of the web page in terms of the content of information and errors/breakdowns and up to date modifications (could be daily), as well as the class of the access network on which the web page is based. ii)Notification Notification about(predicate) the invoice can be delivered to the customer (bill payer) in a diverseness of ways . The most common method used is observance through e-mails. The customer receives an e-mail notifying them of the account balance or amount due. However, this method is particular in terms of its graphical presentation and potential.A more effective method of notifying the consumer of their invoice is to send the URL (link of the website) that contains the invoice in order to castigate the limitations of e- placard the invoice. The latest trend however in the recounting aspect of a bill is via mobile phones and personal digital assistants (PDAs). Instead of e-mailing the customer, the biller may crap a database for the clients phone numbers and send them text messages stating the amount due, the due date of the bill as well as any additional information the biller finds necessary to provide.In the traditional case of paper-based bills, notification is done through mailing the existing invoice to the customer/client. iii)Bill Presentment Under EBPP, bill presentment is the sta ge where the biller/consolidator delivers a copy of the actual bill to the customer/client in an electronically generated format. The bill may be presented with complete details of the invoice or as a summary of the details, depending on the extent and intensity of the details involved. Through bill presentment, the biller is able to communicate more effectively with the clients being billed.The reason wherefore interaction between the biller and the clients is enhanced is due to the ability of the biller to guide the customers to the areas of relate as well as study or better rede the clients preferences and trends. Electronic bill presentment may also assist the biller by improving brand loyalty by providing the clients with a well developed a compelling experience. Aspects concerning marketing and advertising can also be addressed by monitoring and controlling the quadruplet of the web page surrounding the area of the invoice.Additional aspects may be provided by making infor mation about pending orders, past payments as well as pending payments available. iv)Electronic Payment and nib This presents the last stage involved in EBPP. The Billers as well as the consolidators are required to provide the customers with various forms of payments in order to provide the customer with flexibility. Payments may be set to be do automatically or at the diplomacy of the customer. The types of payments may include Direct debit from accounts One- condemnation payments Check payments Online payments/ Electronic currency transfers Bank cards/ Credit card payments. Customers are also provided with the choice of making multiple payments to a single provider or one have payment for multiple services to the consolidator ( such as epost). The concept of Posting elevatedlights the documentation of the information on when the bill was paid, how the payment was made and the amount of the payment made for the services. Such information is then updated to the billers accou nts-receivables systems. 5-Comparison of Paper-Based and Electronic SolutionsExhibits 2 and 3 show the comparison between the paper based billing cycle and the electronic billing cycle. In both billing cycles (electronic and paper based), the creation of the bill goes through the identical stages Data collection, Mediation, judge and Content creation and bill design. In the stage of bill design and creation however, the bill is only formatted when its a paper based one, and printed when its an electronic bill. The main difference between the two cycles is at the stage of the Presentment of the bill.In the case of a paper based payment, afterward the bill is formatted, on that point is notification by regular mail and then the bill is presented. In the case of the electronic billing cycle, there is notification by internet and then theres an extra stage where the bill is converted onto a Web-friendly format, this is referred to as the Transition to Electronic stage. Finally, the bill is presented either by Web or printed and the check is sent to the biller if its a paper based bill, or the payment could be kill immediately and electronically in the case of an electronic bill. Parties Involved Billers, bankers, aggregators and consolidators implementing EBPP can play various roles in the overall EBPP process. Once roles are defined, it is easier to identify which model (aggregator, biller- submit or e-mail based) is most appropriate for the clients EBPP strategy. Billers may also implement more than one model in order to lift out serve their clients. Be ca-ca the industry is continuously changing and redefining, the fillings and opportunities for EBPP will continue to expand.There are several parties involved in the EBPP process The biller payment provider, or BPP, is the billers bank that receive payment and provides account receivable information. It is an agent of the biller that accepts remission informatio on behalf of the biller. The bill service provider, or BSP, provides EBPP services to the biller like posting bill details, consolidating bills and delivering them to the customer service provider, or providing bill summary ditribution. The customer service provider, or CSP, as it names implies, provides the customer with an interface for bill presentment.It enrolls them, enables presentment and provides customer care and support. They are contacted directly by the customer to help with a payment or receive general assist and answer questions. The Consolidator is a biller service provider that aggregates all the customers bills from multiple billers in one central website. An example of a consolidator is Canadas epost where the customer securely accesses the website to both view and pay his/her bills. It is advantageous in that the customers can view and pay all their bills at once. 7- Evolution PhasesThe prodigal paced development of the Internet (World Wide Web) has enabled the establishment of an environment where comp anies and customers have direct and immediate forms of communication. This made way to more effective and efficient methods to insure transactions between two or more parties. Services such as Electronic Bill Presentment and Payment (EBPP) were bound to spud place. The end result was replacing paper mail bills with electronic documents that served the same purpose, only in a more efficient light. In 1999, Canada post implemented the worlds first electronic post office, epost.This tack together Canada in the forefront of the Electronic Bill Presentment and Payment market. By providing a free and universally available service, epost dominated the e-billing market and provided solutions to umpteen Canadians. By 2002, the e-billing market was split between epost and Webdoxs, eposts main contender at the time. In July 2004, epost increased its market share through its eruditeness of webdoxs. This made epost Canadas main EBPP service provider and by the end of 2004, epost secured 1. 6 million registered users. However, despite the exploitation of the e-billing sector, the profits generated were not significant.The combined revenue of e-billing service providers, namely, epost, Innovapost and Canada post International Ltd. was $192 million in 2004, $18 million less(prenominal) than the previous year. in spite of the substantial drop in the revenues generated by e-billing service providers the prospects for the e-billing sector remained optimistic due to the high mountth potential of the e-billing sector. Canada post was aware of the fact that the average bill remunerative customer needed time to adapt to the new techniques provided by e-billings sector. endorse Canadas national purchasing study, How Business Buys, released May 2001, shows that e-commerce based billing and order processes will more than quadruple by 2005. Currently, e-billing accounts for only two percentage of corporate billing. Benefits include reduced internal cost and reduced time con sumption. Visa Study published by Allbusiness in 2001 (http//www. allbusiness. com/public-administration/1169884-1. html) In 2005, epost approached Canadas major financial institutions in order to implement the e-billing component through the financial institutions online banking element.Such a step would allow the banks clients to gain access to the same epost features (receiving, viewing, paid and storing bills online) directly from the financial institutions website. This in turn would enable epost to wee a larger market base of customers through the financial institutions. interrogation that focused on people who bank online shows they are increasingly valuable, long-term bank customers who are more likely to invest more gold and purchase additional services. These are the same customers that would be attracted to and benefit from EBPP.Its our goal to have every Canadian banking online, receive all their hypercritical mail online through epost. As stated by Roger Couldre y, president and chief executive officer of epost. By the end of 2005, epost had been integrated into many a(prenominal) of Canadas major financial institutions, namely Bank of Montreal (BMO Canadas first bank), CIBC, Laurentian Bank, Desjardins, Royal Bank of Canada monetary Group, National Bank of Canada, Scotia Bank and Toronto Dominion Trust. By targeting Canadas online banking customers, epost was able to effectively increase interest and use of the e-billing sector.According to statistics gathered by ComScore Media inflection in 2004, 11 million Canadians browsed their financial institutions website in order to access their financial information. Additionally, in 2003 Forrester Research found Canadians to be early adopters of Web-based financial services when compared to Americans. A large number of Canadians, 55 percent, used the web for banking/financial services composition only 37 percent of Americans used the internet for banking services. Such statistics set the ma rket base for epost and established the key basis for its inevitable expansion as Canadas laming EBPP service provider.Today EBPP is one of the most utilized concepts in trades union America, with a market of approximately 330 million regular users. Interest among Canadian businesses is growing at an overwhelming pace many are discovering that it is the most cost effective method to undertake the billing aspect of conducting business. Moreover, due to the ever increasing importance of preserving the environment, the implementation of the e-billing component would contribute to the cause of saving the environment by using less paper and producing less waste. 8- Advantages of EBPP )Benefits to the federations/implementers The implementation of EBPP has brought about many advantages for both the companies billing and the customers getting billed. The degree centigrade+ Canadian companies, now using eposts e-billing services, have experienced a number of advantages starting with del ivering bills to their customers instantly. This saves a substantial amount of time for the billers, since the mailing and processing floats will be significantly reduced, leading to quicker payments of bills, as well as reduced Days Sales Outstanding (DSO).This pith that bills will be collected faster by firms, enabling them to pay their suppliers earlier, hence enhancing the way in which business is conducted between a corporation and its paying clients by reducing the hard currency conversion period. Payments made by customers will be automatically linked to the corporations Accounts Receivables, providing the company with better control over its pending payments and overall cash position. Beyond the aspect of speed, the corporations costs of presentment will be significantly reduced, up to 80%.It would also abolish the costs of paper, printing and postage fees. With the lowest possible costs of payment processing, diffusion and collection of bills, firms will be reducing thei r costs effectively while increasing their profits. Additionally, the costs of implementing the e-billing component are relatively little, taking into account the vast cost reductions of implementing the system. Furthermore, EBPP will enable a corporation to mark its customers behavior, since customer needs will be unmingled through the usage of the features provided.The corporation will be able to carry through customer satisfaction by placing emphasis on and enhancing the features its customers appear to be utilizing the most. The corporation will also be able to reach its customers through the interactive statement messages system, which can be used as a tool for marketing and advertising new features, products and/or services. Furthermore, such a system can be used to get clients registered for recurring change payments each month/period as well as providing the option of non-recurring payments, such as a one-time bill.Taking into consideration the overall advantages provide d by the implementers of EBPP, it would be safe to say that the growth potential for the e-billing sector is enormous. Up until now, there are approximately 100 Canadian companies implementing the system. This number is expected to grow in time due to the vast number of advantages provided by EBPP. ii)Benefits to the customer Although most systems are designed to further benefit the company implementing them, EBPP is a tool for both the company and its clients.EBPP enables the customer to immediately self-activate (open) their account in order for them to make recurring periodic (monthly) payments. It ultimately saves the customer the time taken to physically mail or make the payment at their financial institution, and practically eliminates the mail float by allowing the customer to make payments immediately after viewing the bill online. EBPP is also flexible in the sense that it can be implemented in many different forms providing the customer with a vast number of ways to utiliz e its many features.EBPP gives the customer an array of drafting options, from customer-initiated payments to automatic drafts or even safe drafts if necessary. Customers can make the payments either through a consolidator such as epost, the corporation itself such as Rogers Telecom or through their bank such as Bank of Montreal. By giving the customer a wide range of choices, he/she can choose what they are most comfortable with in terms of security and quality of service.The number of errors made by the bill payers and the billers are also substantially reduced due to the ability of the platform to allow pre-filled customer interactive information to tally all content collected/distributed is correct. Additionally, epost provides its registered users with the option to store their bills for up to 7 years. This allows for maximum efficiency, the customer will no longer have to rush up his/her paper bills for future reference rather, they will have their bills stored online and sociable at all times. Security wise, EBPP is rather comprehensive.In order to gain access to an account, the account number and its matching password are required. Furthermore, it encrypts the information communicate from a computer to the designated server through Secure Socket Layer (SSL) technology. This reduces the chances of occult information falling into the wrong hands. Overall, EBPP systems are usually designed to increase security and confidentiality in order to encourage users to share their personal financial information to streamline the activities involved in making payments for desired products/services. ii)Benefits to the surroundings Although the benefits to the environment are clearly visible, translating the benefits in terms of Greenhouse shove along (GHG) emission reductions would illustrate the concept in a more effective light. If Canadians were to replace 40% of their paper bills with electronic bills and only print 20% of the electronic bills, GHG emis sions would be substantially reduced by 10,500 tonnes per year. Replacing 80% of the paper bills and printing only 5% of the electronic ones would lead to 22,000 lashings of reduced GHG emissions.Such goals would serve to better preserve the environment and would reduce the amount of waste produced by a significant portion. Canadian businesses would end up saving approximately $1. 1 billion dollars in total. Doubling the implementations would lead to a $2. 2 billion reduction in expenditure by businesses increasing their overall profits while ensuring that their operations are in line with the environmental constraints of reducing waste/GHG emissions. 9-Risk Affiliated with the Adoption and Non-Adoption of EBPPBillers must take into consideration every type of billing presentment and payment the market offers today since it is their main ingredient to be successful. Therefore, billers have to offer the optimal billing presentment and payment that will bring customer satisfaction an d be convenient for the biller at the same time. After the introduction of Electronic Bill Presentment and Payments (EBBP) many billers are facing a dilemma of risk due to the adoption or non-adoption of EBPP.For instance, if the biller decides to adopt EBPP, there will be potential of non-acceptance from the billers customers after the implementation of EBPP and that will lead to a decrease in the profit margins because of lost customers. The biller baron also encounter fraud attempts especially because the bill will be electronically paid. Moreover, there might be a defect in the operational process of electronic presentment and payments such as a system freeze which will incur more costs on the behalf of the biller.Then again, if the biller decides not to implement the EBPP, the biller might be going against the markets new trend hence this will put the company in a competitive disadvantage. Therefore, the biller will start losing market share and this will reflect negatively as a decrease in the billers profit margins due to lost customers. 10- Users of EBPP in Canada (Business Sectors) Most businesses that implement EBPP provide their customers with services that require recurring payments, rather than a one-time payment (non-recurring).This implies that EBPP would be more convenient for service geared businesses that provide the customer with an current service, which would require the customer to make repeated payments. Businesses operating in the next service providing sectors would greatly benefit from the implementation of EBPP, since all forms of viewing/paying the bill would be streamlined and undertaken from one location. i)Telecommunications Service Providers ii)Utilities Service Providers iii)Visa/ subdue Procurement cards iv)Banks and financial institutions v)Insurance providers vi)Postal Industries 11-ConclusionElectronic Bill Presentment and Payment offers a streamlined method of payment, which is very advantageous for both the billers and their clients and notably the environment. Moreover, it considerably reduces costs and the amount of time to make a payment. Despite the drawbacks or risks of implementing EBPP, the benefits clearly outweigh the disadvantages. We believe that by 2015 paper bills will probably be inexistent in Canada, due to the expectations of recessions, companies will realize that they will save a lot of money by implementing the e-billing component, despite its high implementation costs.EBPP is the next trend for all businesses, and is expected to become the specimen form of bill presentment and payment. 12-References http//findarticles. com/p/articles/mi_m0EIN/is_2004_July_8? pnum=3&opg=n6098705&tag=artBodycol1 http//findarticles. com/p/articles/mi_m0EIN/is_2004_July_8/ai_n6098705 http//cebp. nacha. org/documents/ebpp-buspractices-2-1. pdf www. cdnpay. ca www. wikipedia. ca http//www. bce. ca/data/documents/responsibility/innovating_toward_a_low_carbon_canada. pdf Margaret Tan (2005). E-paymen t The digital Exchange. NUS Press Kornel Teplan (2003). Electronic Bill Presentment an