Chapter 22: Electronic Payment Systems

“We have a criminal jury system which is superior to any in the world; and its efficiency is only marred by the difficulty of finding twelve men every day who don’t know anything and can’t read.”

—Mark Twain (1835–1910)

Overview

As more B2B trading partners conduct business and provide customer service over the Web, it makes sense to handle invoicing, billing, and payment processing in the same fashion. B2B trading partners have specific motivations for online billing: billers want to receive payments faster and with less manual processing, whereas payers want to streamline the cumbersome payment-approval process. Thus, the payment stage of any electronic bill presentment and payment (EBPP) implementation must be able to integrate tightly with accounts receivable (A/R) and accounts payable (A/P) systems, support backend payment-processing workflows and procedures, and provide detailed reporting capabilities.

When it comes to online billing, getting your bills to the Web is just one part of the challenge—accepting payments electronically finishes the equation. Without payment, your online billing presence is only a one-way street.

In other words, in the business-to-consumer (B2C) sector, EBPP is a top priority, especially in the utility, telecommunication, credit-card, and financial-service markets. The trend has been slower to catch on in the business-to-business (B2B) sector, where many large companies have well-established systems and processes for handling payments from their B2B trading partners.

To handle payments for billing interactions, market giant CheckFree Corp. (http://www.checkfree.com) is the undisputed leader. But, other biller-centric vendors, including Metavante (http://www.metavante.com) and Princeton eCom (http://www.princetonecom.com), also have strong offerings and are becoming market forces. Billers seeking full-service EBPP solutions, which include presentment and payment services, should consider this class of vendors.

For basic transaction processing and related services, CyberCash (http://www.cybercash.com/), CyberSource Corp. (http://www.cybersource.com), VeriSign, and others of this ilk make sense. But, such services are more broad-based commerce payment solutions that are not necessarily focused on bill payment. For companies that want to implement secure payment for their commerce sites and integrate these same services into their EBPP applications, these services make sense.

Finally, a number of electronic-check vendors, including PayByCheck.com (http://www.paybycheck.com) and X.com Corp. (http://secure.paypal.x.com), have extended their services beyond person-to-person payment with offerings for businesses. In the near term, these solutions are most well-suited for small-to-midsize companies that merely want to give their payers a simple way to pay via electronic checks. It remains to be seen whether major billers will rely on such services for high volumes of payments.