Customers are interested in paying for services in a variety of ways—anytime and anywhere. Have you made it easy for your customers to pay you? This is an extract from the Ascent Group\'s annual benchmarking research of Billing and Payment Practices.

1. Billing & Payment Options
Driving Customers to Paperless
Billing and payment options for customers have grown considerably in the last 5 to 10 years.
Bill presentment has expanded from paper bills delivered through the U.S. Postal Service to
email, mobile phones, and the Internet with the option to receive bills on company websites, at
banks, or special payment portals. Payments too have expanded from the days of walking in-
person and paying by check or cash or mailing your paper check through the U.S. Postal
Service. Now customers can pay by cash, check, credit/debit card, electronic fund transfer,
ACH transfer using ATMs, IVRs, mobile phones, and the Internet. In a few short years
customers have been offered and have come to expect many billing and payment options.
Consumers now understand the benefits of online bill payment. A recent study conducted by
the Marketing Workshop and Harris Interactive found that four out of five households with
Internet access now use online banking services, primarily to access balance and account history
and transfer money between accounts. Forrester Research predicts that the total number of
U.S. online bill payment households will increase from 48 million to 63 million over the next 5
years.
The rush to accept online payments has been a major driver of Electronic Bill Presentment &
Payment (EBPP) programs for many. The focus appears to be shifting. Electronic bill
presentment is now being pushed more urgently, in the hopes of reducing printing and mailing
costs, and saving a few trees.
Companies are also trying to tap into the mobile banking services market which is expected to
increase 10-fold by 2011. While the greatest growth in mobile transactions is predicted in
China and the Far East, Western Europe and India are also expected to grow quickly. While
acceptance has been lagging in the U.S., a growing range of new mobile banking products and
services are being introduced, such as bill payment and presentment, funds transfer, and
account management, which should help entice customers into the fold.
EBPP Quest—Slow Going
The Ascent Group recently conducted research into billing and payment practices. We asked
companies about billing services and payment plans, including Electronic Bill Presentment and
Payment (EBPP). While we confirmed that companies from many industries are actively
implementing EBPP options for customers, we also confirmed that customer adoption (based
on volume) for paperless billing and electronic payment is still quite low—averaging 5.8 percent
for ebill (of total bills issued) and 6.9 percent for epay (of total payments received) for all
industries. While electronic payment transaction volume is still low, the number of customers
paying through the Internet has doubled since our initial study in 2004 (from 6 percent to 13
percent).
©2008 The Ascent Group, Inc. 1

2. These EBPP options are there for customers, as all of our participants accept payments through
the Internet (up from 38 percent in 2004) and nearly half now offer paperless billing (up from
one-third in 2004). We just have to wait for more customers to make the switch.
Mail is still the most popular channel for consumer bill payment among our participants. On
average, 40.7 percent of customers pay by sending a check in the mail. However, this
percentage has been steadily declining over the past 5 years. In our 2004 survey, mailed
payments represented 68 percent of consumer payments.
Our study participants indicated that most
customers still prefer to pay with paper check
by mail—both business customers and
consumers. Surprisingly, many consumers and
business customers still pay face-to-face—
more than 21.1 percent of consumers and
more than 16.7 percent of business
customers.
However, the percentage of payments
received through electronic means is growing
and slowly displacing the paper check
payment. A study by the Federal Reserve
Bank, NACHA, and the TowerGroup noted that check volume is decreasing, mainly because of
the growth in acceptance of alternative payment methods. According to Aite Group, paper
checks and money orders’ share of bill payments are projected to fall from 54 percent in 2006
to 37 percent in 2010.
When EBPP was first introduced, most companies offered online payment options while
continuing to send paper bills to customers. Now, companies are looking for ways to
encourage the adoption of EBills and discourage paper statements.
While many consumers are eagerly paying online, they are not quite ready to give up the paper
bill. A study by Forrester revealed that only 16 percent of consumers have opted to eliminate
the paper statements. These findings are consistent with our study’s findings—only 5.3 percent
of customers have signed up for electronic bill presentation.
Email Push Expands Paperless Billing Adoption
Companies, including most of the participants in our research, are now offering fully featured
web sites that allow customers to view bills, access billing and payment history, as well as
accept electronic bill payment. Several companies in this year’s study have also added options
to securely deliver bills and offer payment options via email, hoping to expand eBill
participation. While email bill presentation has been around for a while, it was pushed to the
back burner in the rush to deliver EBPP via the web. However, it’s getting another chance
thanks to several vendors that have found clever ways to deliver email bills and offer secure
payment options without the need to log-into a web site.
©2008 The Ascent Group, Inc. 2

3. Email bill delivery “pushes” the electronic bill to the customer, eliminating the need for a
customer to log into a web site to view and pay a bill. This is easier for many customers and
often speeds up payment of the bill. Companies are taking a second look at this option,
especially as web-based EBPP adoption rates stall.
The Benefits are There
EBPP offers significant cost reduction opportunities for companies, especially as companies
move to a paperless billing environment.
Internet payment offers opportunities to streamline payment processing as well as remove
paper from the processing. More companies are moving more and more payments to electronic
format, thereby speeding processing time and receipt of funds.
Electronic bill presentation and payment is an attractive opportunity for high-volume billers.
While electronic payment does offer some savings and the elimination of many manual
processes, it’s really electronic bill presentment that offers the biggest savings for companies.
Some analysts argue that EBPP can build loyalty, enhance customer service, and improve
customer communications. EBPP certainly offers customers the convenience of paying bills
when they want to without writing checks. A well-designed web presence, however, probably
does more to impact customer service and improve customer communications.
Web bill presentation offers the opportunity for companies to target audiences and cross-sell
and up sell. Through artificial intelligence, the computer can recognize who is logging on to pay
and then make some determinations about suggesting additional services. Anyone who has
shopped at Amazon.com, a popular Internet superstore, will recognize how the Internet and
the computer can be used to remember past purchase and profile a consumer’s taste in books,
music, and other merchandise.
These are just a few of the obvious benefits that can be realized through electronic billing and
payment services. All that is needed now is an audience.
Getting it Right
Companies are expanding electronic payment and electronic billing options offered to
customers, in hopes of increasing the likelihood that they will choose an electronic billing or
payment service.
Most companies have the ability to accept electronic payments. However, not all have the
ability to deliver electronic bills. But there is a growing interest in this now, especially since it
appears that consumers are getting more accustom to electronic payment options,
Companies are also actively looking for ways to move more and more “traditional” payments to
electronic, leveraging ACH and moving to Back Office Conversion (BOC) and Accounts
©2008 The Ascent Group, Inc. 3

4. Receivable Conversion (ARC) (convert paper checks to ACH). More companies are
implementing self-service payment services through IVRs and Web sites that accept check,
credit card, and debit card. Others are offering options for recurring payment through a credit
card, recognizing that many consumers are paying with credit cards to maximize loyalty points
or consolidate bills.
Direct debit (recurring ACH) is seeing a renewed interest among companies. While direct
debit has been offered for 10 to 15 years in many industries, many companies are now
emphasizing this as an option to customers. Consolidators also offer the option to set-up
recurring ACH payments to service providers, thereby encouraging a higher participation rate
among consumers.
The point is that customers are interested in paying for services in a variety of ways, as long as
they are convenient—anytime and anywhere. Do the research to understand how your
customers want to pay for services and align your payment options to meet customer
expectations. Make it easy for customers to pay your bill.
Make sure your billing and payment processes, both the people and technology-driven
processes are effective and efficient. Review work tasks, route standards, and systems
periodically to identify opportunities for improvement, with a keen eye for those customer-
facing processes. Make sure your company develops the ability to transfer payments through
check image exchange and the ACH network.
Benchmarking performance is an effective technique to understand your department’s level of
performance and opportunities. Be sure to compare cost and service for a balanced view of
performance. You can actively participate in the Ascent Group’s benchmarking services to
monitor your billing and remittance performance and improvement. Contact Christine
Kozlosky at the Ascent Group for more information – www.ascentgroup.com
Benchmark Study of Billing and Payment Practices
To better understand how companies and different industries are approaching billing and
payment services, the Ascent Group conducted a benchmarking project to evaluate billing and
payment performance and practices. Twenty-four companies participated in the research. A list
of participants is included at the end of this report.
The main objectives of the study were to evaluate the various tactics and strategies used today
to bill customers and provide options for payment. The study also identified best practices and
opportunities for improvement. Secondary objectives included understanding:
• Adoption rates of various billing services and payment offerings;
• The range of performance by company and by industry segment;
• The use of technology to reduce costs and improve customer satisfaction.
©2008 The Ascent Group, Inc. 4

5. Participants were asked to share management tactics and strategies, as well as identify any
improvement in performance. The study also asked companies to include lessons learned,
successes, and plans moving forward.
Study Findings & Recommendations
Study participants range in size from 8,000 to 25 million customers. As a group, participants
average 2.1 million customers. Consumers represent the largest segment served by all
participants.
Our participants included companies from the Financial Services, Insurance, Services, Telecom,
and Utilities, with the majority of participants from the Utilities industry (71 percent).
Participants issue between 32,000 and 300 million bills annually to customers, averaging 20
million as a group.Seventy-one percent of participants reported presenting customers bills on a
monthly basis.
Companies are actively pursuing Electronic Bill Presentment and Payment.
Forty-two percent of our participants present bills electronically and 83 percent accept web
payments. For our study participants, EBPP—as represented by Electronic Bill Presentment,
Internet Payment, and Paperless Billing—remains the top plan for the future and the most
recent implementation effort.
When asked to identify the last billing
or payment option implemented, the
most popular offerings were Internet
Payments (26 percent), Credit Card
Acceptance (26 percent), Electronic
Bill Presentation (21 percent), and
IVR Payments (16 percent). Clearly
electronic payment and credit card
acceptance are a key emphasis for
companies offering new payment
options.
Companies are implementing
Internet payment and electronic bill
presentment, together and separately. Some companies are adding eBill Presentment after
having an ePay service for a year or so while others are implementing EBPP at the same time.
Clearly electronic payment acceptance, whether Internet or ACH, is a key emphasis for
companies implementing new payment options for customers. ACH debits cost as little as 25¢
to 35¢ per item, providing a cost-effective method to process a payment. ACH payments
usually clear within one day, representing a significant opportunity to improve cash flow over
other non-electronic payment channels.
Most Customers Still Pay by Mail—Slow growth in EBPP Programs.
Mail is still the most popular payment channel among our consumers (40.7 percent) and
business customers (51.8 percent). Surprisingly, quite a few consumers still pay face-to-face—
©2008 The Ascent Group, Inc. 5

6. averaging 21.1 percent—12.8 percent at a company location, 8.3 percent at a pay station. Most
of our participants accept walk-in payments through a company location (28 percent) or a 3rd
party pay station (5 percent) or both (50 percent).
Business customers also like to pay in person—16.7 percent
pay either through a company or 3rd party. The next most
popular channel is through direct debit / bank draft (15.4
percent).
On average, only 5.9 percent of total bills are paperless and
6.9 percent of total payments are electronic. EBPP adoption
is still quite low when compared to other payment channels.
Forty-two percent of participants present bills electronically.
Those presenting over the Internet or by email range from 1
to 18 percent bills
presented electronically
(total customers)—
averaging 5.9 percent as
a group. The majority present less than 10% of total bills
electronically.
Eighty-three percent of participants reported accepting
Internet, Web, or other electronic payments—ePayments
averaged 6.9 percent of total payments received. The
majority receives less than 5% of payments from customers
electronically. While companies are clearly emphasizing
electronic presentment and payment, EBPP has yet to
achieve a significant level of participation.
Offer Biller Direct & Consolidator Bill Presentment To Maximize Participation
To meet the needs of all your customers you should consider offering electronic billing and
payment options at your own website (biller direct) as well as a consolidator’s website. Some
customers prefer to go directly to a billers website to make a payment while others prefer to
make all their payments at one time through a consolidator. Forrester predicts that the
majority of online payment growth over the next five years will come from users paying on
bank websites (consolidator). Providing ebills through both channels will increase customer
satisfaction with the bill payment process.
Additionally, research into online payment behaviors reveals that customers who pay through
consolidators are twice as likely to sign up for paperless bills than ones who pay at a biller’s
website. Consolidators frequently promote paperless billing to customers paying through their
site, thereby increasing your chances of improving participation rates.
Most Companies Rely on Traditional Approaches to Promote EBPP Options
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7. Companies are promoting billing and payment options primarily through billing inserts, bill
messages, and website advertising. A smaller number are looking to direct mail, outbound
calling, or email campaigns to promote usage. More and more participants are eliminating fees
or waiving deposits for customers who sign up for electronic billing, direct debit, or electronic
payment.
Companies are also jumping on the “green” bandwagon, offering promotions to customers to
“go green” by signing up for electronic billing. Some are giving away hybrid cars, green home
makeovers, and eco-vacations. Others are planting trees for every customer that signs up for
paperless billing. Not only is this timely and attractive to customers, it also helps to emphasize
the savings that be achieved if more customers switch to paperless billing.
Actively promote your EBPP options. Use traditional and non-traditional means to introduce
options and expand adoption. Print reminders on the bill, on the insert, as well as on the return
envelope. Promote ebill and epay options prominently on your web site and in your on-hold
messages. Train customer service representatives to refer customers to electronic billing and
payment services. Ask new customers for email addresses during service initiation, and if they’d
like to receive electronic billing statements.
Aggressively target direct debit/bank draft customers (recurring ACH transfer) to sign-up for
paper less billing—this is the lowest processing cost combination.
Consider offering incentives to encourage EBPP participation. Incentives and discounts do
increase participation. Make sure the incentives are fair and worth the effort. Conversely,
transaction fees discourage participation. Make sure your fees and discounts are pointing
customers to the lowest cost channels. Research has shown that the way customers receive
their bill has a significant impact on how they pay their bill. Customers who receive their bill in
the mail are more likely to pay by mail or in person, while customers receiving their bill
through a consolidator are more likely to pay through ACH deduction from their bank account.
Bills delivered on a company website (biller direct) tend to lead to non-recurring credit or debit
card payments.
Direct Debit Program Participation Exceeds EBPP Program Participation
Excluding paper check or cash payments, the most popular payment method for customers was
through a recurring ACH payment, frequently called “direct pay”. Customers paying through
direct pay submit banking information to the company so the amount due can be automatically
debited from their bank account to pay the balance each month (or a budgeted amount). This
approach has been very popular with utility companies for many years. Customers receive a
notice of the amount that will be automatically deducted from their bank account each month.
The good news, it’s also one of the lowest-cost payment processing options, and the optimal
combination with paperless billing.
Companies are Extending Self-Service Options
While EBPP programs continue to be popular, companies are looking towards IVR technology
and kiosks to further expand self-service options. After EBPP, accepting payment through the
©2008 The Ascent Group, Inc. 7

8. IVR was the most often mentioned newest billing or payment option or billing payment option under
consideration.
Look for ways to extend self-service offerings to take advantage of ACH transfers. Most
customers pay their monthly bill with a check. Introduce payment options to accept check-by-
phone, check-by-IVR, and check-by-web to make it easy for customers to pay their bill by
check. Non-recurring ACH payment options capture ACH information each time the customer
chooses to pay the bill over the phone, IVR, or web. The amount due is then transferred using
ACH. This is also one of the lowest cost payments to process—it’s a win-win all around.
Credit and Debit Card Acceptance is Key to Self Service Offerings
Debit and credit cards continue to interest customers, especially consumers. Nearly all
participants accept credit or debit card payment (91 percent)—The Internet is the most
popular channel to accept credit/debit card payments. Debit cards are readily accepted in the
retail industry and consumers are becoming accustomed to swiping a debit card in lieu of
writing a check. Additionally, loyalty programs have increased credit card spending. While
credit card payments have stalled slightly in the depressed economy, it’s still smart to expand
your payment options to accept debit and credit cards. Make it easy for customers to pay with
a debit or credit card. Vendors offer many solutions to process credit and debit card
payments—by phone, through the IVR, on the web, and in person.
Consider accepting recurring credit card payments. Although these payments tend to have a
higher processing cost, they provide convenience and tend to increase customer retention.
Billing & Payment Preferences Change Over Time
Customer spending patterns change over time—with the economy, personal financial status,
and through the introduction of new technology. Conduct periodic customer research to
better understand customer billing and payment preferences, by customer segment. As
demonstrated in this study, consumer and business payment preferences vary. Customer
research will arm you with the information you need to match service offerings to preferences.
Eliminate EBPP Adoption Hurdles
Like any customer-facing system, it’s all about the customer experience. Make sure your self-
service billing and payment options are user-friendly—make it easy for customers view bills and
make payments. It should also be easy to enroll in an electronic billing and payment option, turn
paper bills off/on, and enable account notifications and reminders. Encourage representatives to
enroll new customers while they are signing up for service.
Make sure your online experience provides the necessary account billing and payment history.
Customers who have access to a year’s worth of billing and payment history are less likely to
feel the need for paper bills. In addition, bills presented on the website should look exactly like
the paper bill, to eliminate confusion and unnecessary billing inquiry calls. This will also help
customers feel more comfortable moving to a paperless bill.
©2008 The Ascent Group, Inc. 8

9. Let customer choose preferred payment methods as well as specify multiple sources for
payment. Provide as many payment methods as possible—scheduled, one-time, recurring, and
automatic payments—and accept multiple sources—checking accounts, savings accounts, credit
cards, debit cards…
©2008 The Ascent Group, Inc. 9

10. About The Ascent Group, Inc.
The Ascent Group, Inc. is a management-consulting firm that specializes in customer service
operations and improvement, performance benchmarking, competitive benchmarking, work
management, and industry research.
Research reports published by the Ascent Group include:
• Call Quality Practices
• Credit & Collection Practices
• Achieving First Call Resolution
• IVR Improvement Strategies
• Reward & Recognition Program Profiles & Best Practices
• Improving Frontline People Processes: Recruitment, Training & Performance
• Billing and Payment Profiles & Best Practices
• Meter Reading Profiles & Best Practices
• Call Center Strategies
• Improving Field Services
These research reports can be purchased online, through our secure order form at
www.ascentgroup.com or by phone at (888) 749-0001.
The Ascent Group offers many opportunities for your company to participate in benchmarking and best
practice discovery through its online benchmarking services:
• Call Center Operations
• First Call Resolution
• Call Quality Monitoring
• IVR Technology
• Field Services
• Credit & Collection
• Billing & Payment Services
• Remittance Processing
• Field Services
• Meter Reading
• Frontline Recruitment, Training
• Reward & Recognition Program
The Ascent Group is currently researching Billing & Payment Programs and Field Services. If
you are interested in participating in our research, please contact Christine Kozlosky at
ckk@ascentgroup.com or (888) 749-0001.
The Ascent Group, Inc.
120 River Oak Way
Athens, GA 30605
(888) 749-0001
www.ascentgroup.com
©2008 The Ascent Group, Inc. 10

11. ©2008 The Ascent Group, Inc. 11