The two main types of EBPP are biller-direct and consolidated. While they both offer convenience to customers, and save time and costs for billers, they solutions they offer are somewhat different.
In biller-direct payment systems, biller and customer have a direct relationship. The biller sends the customer an electronic bill (that’s electronic ‘presentment’).
Electronic bills have two big advantages: they’re cheaper and quicker to send, and they’re more convenient for customers to pay immediately, since they’re already online when they receive the bill.
To pay the bill, the consumer logs into the biller’s website. If the bill is sent electronically, it may contain the customer’s billing information and a link to the biller’s website. For security reasons, though, many billers don’t ask consumers to follow links in emails because of the risk of phishing scams. Instead, billers simply send instructions on how to pay online.
Although electronic bills are normally submitted by email, in the mobile age that is no longer the only option, with the emergence of mobile-based and text-based billing services.
When the consumer pays online, they use a debit or credit card and the funds are sent to the biller using the ACH system.
The key advantages of biller-direct payment systems are:
The disadvantages of biller-direct payment systems are:
A variation on biller-direct payment systems is the use of a secure, hosted payment site. A hosted payment site can be branded and customized to suit the biller, but avoids the technical issues and costs of maintaining a biller-direct system.
In a consolidated payments system, a service provider acts as a hub, aggregating billing information and sending it to a single portal where customers can see and pay bills (usually a bank, but not always). When the consumer pays the bill, the service provider receives and issues the payment instructions.
It’s usual to distinguish between “thick” consolidation (where all the customer’s billing information is in one place) and “thin” consolidation (where only the basic details of the bill are sent).
The key advantages of a consolidated payments system are:
The key disadvantages of a consolidated payments system are:
Both systems have their strengths and drawbacks, but the benefits of an electronic payment system are clear.
For more information about our EBPP solutions, contact our sales team to schedule an online demo.