A ‘Revolution’ For Electronic Billing: Secure e-mail Bill Presentment & Payment


The benefits of electronic billing are significant:
1. Instant bill delivery
2. Up to 80% saving on presentment
3. Quicker payment and reduced DSO (days sales outstanding)
4. Customer behaviour visibility
5. Lowest possible cost of payment processing
6. Fewer payment exceptions.

Thus far, the challenge has been to get a significant number of customers to sign up and register for the biller’s Internet e-Billing offering.


Electronic bill presentment and payment (EBPP) has been around for many years now, yet adoption rates continue to fall dismally short of expectations. In the utility industry, for example, 7% or 8% is considered
high adoption – most utility billers are experiencing adoption rates of 2% to 4%. Yet all indications are that over 80% of Americans are Internet users. Why this great disparity? What is it going to take to get the majority of customers to have an electronic billing relationship with you?

There are various factors which inhibit e-Bill penetration. Over 30% of Americans are still dialling up to the Internet at dial-up modem speed, and this figure is even higher in rural areas. It is just not feasible to register and use a secure EBPP website at this speed. But for high technology users, e-mail volume has reached a point where there just isn’t time to link through and deal with online billing. A recent Jupiter Media report shows that over 95% of all users’ time spent connected to the Internet goes on handling email.

E-mail continues to be the communication medium of choice, yet most billers only offer Internet website presentment. Enticing the customer to go online and register is expensive and generally yields poor results. In addition customers continually forget their usernames and passwords, resulting in expensive phone calls to customer service centres. In many programmes it takes between 7 and 24 clicks for a customer to find and pay his bill – far too many to make the experience worth repeating. And security fears such as Phishing and identity theft are still hindering online payment. Finally, marketers are having difficulty effectively communicating the benefits to the consumer.


There are several ways for billers to ensure that a large percentage of customers migrate to e-Billing. There should be no upfront customer registration, and no need for a customer to visit a website. Customers should  ot require more than a dial-up connection, and should not have to remember a username and password. The e-Bill should look the same as the paper bill that customers are used to, and they should be able to view and pay it online in under 30 seconds, or save it and pay it later.

This can all be achieved through secure e-mail billing, as a utility in North America has shown. Whitby Hydro, a utility in Ontario, Canada, was established in 1903 and is one of the oldest public utilities in the province. Each year the utility provides over 750 million kilowatt-hours of electricity with a peak load of 200 MW to the Towns of Whitby, Brooklin, Ashburn and Myrtle. Whitby Hydro’s strong customer focus drives personnel to continually seek out innovative ways to improve on customer service, while being conscious of the environment. In November 2005 Whitby Hydro had no Internet-based e-billing system and no e-mail addresses.

Through dedicated e-mail address gathering, and using secure e-mail billing strategies, the utility recently went live with its EBPP system – and immediately recorded just under 4% adoption and paper turn-off. This is a percentage that most North American utilities have taken up to two years to achieve. The e-mail billing process starts when the biller gets a customer’s e-mail address – commonly at account activation, or when the customer contacts the call centre. Every contact is an opportunity to get this information. A ‘shared secret’ is chosen that is known only to the biller and the customer. This can be, for example, a Social Security number, Zip Code, or account umber. The biller then sends the customer his next bill via secure e-mail, and the customer uses the ‘shared secret’ to decrypt and open his e-Bill.

The e-Bill looks exactly the same as the paper bill, and the customer can print it out if required. The customer enters his checking and routing numbers and the amount he wishes to pay in the Payment Section at the top or the bottom of the e-Bill (the amount is defaulted to the total amount due), and clicks on ‘PAY’. The transaction has been completed with just two clicks. The payment is then automatically submitted, without the need for the customer to visit a website, and he is sent a popup and an e-mail confirming the payment. The payment flows directly into the biller’s bank account, exactly like any other ACH payment. Once one or two e-bills have been successfully received and paid by the customer, the biller automatically stops sending paper bills. Whitby Hydro approved the project in November 2005, and began the implementation process and e-mail address gathering. Introductory e-mails were sent out from March 2006, and e-billing go live happened on March 23rd. Adoption at go live was 3.5%.


The utility reported 98.6% e-mail deliverability. There were some minor issues with opening the e-mail messages, mostly due to customer software or firewalls, and these were easily remedied. Only 4% of customers said they wanted to opt out, and 85% to 95% of e-mail bills were opened in less than one working day. Customer feedback was positive; many said that the email bill saved them time, because they no longer needed to visit a payment centre to settle their accounts. And because the ‘shared secret’ password is known only to customers and the biller, they felt the system was secure. “Whitby Hydro is continuously looking for ways to reduce billing costs while improving our customer communication.

The e-billing solution meets our goals while maximising customer enrolment,” explains Paul Elliot, Vice President of Customer Service at Whitby Hydro. “When selecting a billing solution, we wanted a system that could be implemented quickly and that would capture the greatest number of customers. Secure e-mail billing makes
participation easy for customers and allows us to achieve our objectives very quickly.”


e-Billing adoption rates in the US have actually been decelerating for the past 18 months, as it becomes increasingly difficult and costly to drive consumers online. The ‘innovators’, and also most of the ‘early adopters’ of new technology have already signed up, and new strategies will be needed to increase the number of customers paying their bills via the Internet.

With the current ‘pull’ strategies and adoption levels, getting adoption rates from 7% to 25% will take a minimum of 5 to 7 years to achieve. The answer is to move back to basics. Stop trying to change customer behaviour and start inserting your bill into your customer’s daily routine. As long as you are expecting your customers to ‘do something’ to turn off paper, it’s simply not going to happen to any significant degree. Make participation easy and adoption rates will increase – to the benefit of both utilities and their customers.