The billing business

Citation

(2001), "The billing business", Work Study, Vol. 50 No. 5. https://doi.org/10.1108/ws.2001.07950eaf.006

The billing business

The billing businessKeywords: Invoicing, Online transaction processing, Electronic funds transfer

The concept of online payment is not new – it is a fundamental cornerstone of many current e-business operations. This means that it is usually associated with payment for goods or services that are themselves delivered online. Now, not surprisingly, organisations are beginning to see the potential for online payment even where those goods or services are "traditional" ones, delivered offline. Such organisations simply want to take advantage of the Internet to present bills to their customers and to accept payment in return. The most obvious example is that of the utility companies who spend a lot of money on their billing operations.

There are obvious benefits. First, the cost of billing is lower – there is no postage to pay for a start. Second, and probably more importantly, it allows bills to be distributed much more quickly – aiding cashflow. It is also more convenient for the payer – they do not have to go through the process of writing a cheque. (This is much more important in the USA where the concept of direct debit is not widely implemented.)

The more "traditional" online payment systems are normally modules of larger e-commerce applications; online billing and payment systems, however, are emerging as third party offerings, either as software packages or as complete online services. This make sense – since in addition to presenting billing information to the customer online, the organisation needs an Internet Payment Provider to fulfil the exchange of cash.

PayPal, originally a US-based service but now offered internationally, enables people to request money by sending bills online, and lets customers send money back via the same route. Using the PayPal system, it is possible to set up business accounts and accept money from customers, including credit card payments on a Web site, using the Web Accept online payment service. Once an account is set up on the system, the billing organisation simply clicks the "request money" tab, enters the amount that they want to charge together with the email address of the recipient, and the service makes the request. When the customer pays, (using PayPal), the organisation receives cash.

This is a service with obvious attractions for a small company. However, it is unlikely that a large company will want to operate in this way. For these larger companies, a more comprehensive system is needed – one in which it is not necessary to make individual requests.

The obvious providers are the credit card companies – with their existing infrastructure, they are geared up to supporting a mass payment system. One example is the Private Payments scheme from American Express. This provides credit card customers with a unique private number that can be associated with their accounts, making them more secure when making online payments. The billing organisation presents bills online, and then accepts these secure American Express payments on their own Web site.

Of course, presenting the billing information online requires some back office work. There is, however, a number of products that enable the transfer of data into HTML format, using middle-ware technology such as Microsoft's Active Server Pages. Extracting customer billing information out of a central data repository and presenting it online then becomes a relatively easy task. The next hurdle is to ensure that payments can be tracked against the bills.

Some companies offer this functionality in dedicated electronic bill payment products, incorporating payment and billing information online. One such company is edocs, which offers a range of electronic account management and billing products. Its eaSuite service, for example, incorporates a number of products such as eaPay, an electronic payment and warehousing component that enables customers to make and track payments.

The banks have also seen "the light" (or the business opportunity) and it is worth talking to your bank to see if it has, or has links to, a preferred billing service. This may remove some of the hassle and some of the risk.