May 16, 2013 •Brian Watson
From faster revenue collection to lower levels of bad debt, EBPP software is helping business of all sizes and specializations significantly improve revenue cycle performance.
And, well, they’re priced accordingly. That is to say that EBPP isn’t exactly cheap.
The best solutions are impressively feature-rich these days, featuring everything from sophisticated payment scheduling to spend analyzers.
So the sticker price can get plenty imposing. Especially when you factor in stuff like the costs of setup, or working with payment gateway providers, payment processors and merchant acquirers, or the special development it takes to support online workflows.
And that’s made it tough for many businesses to jump on board the online billing and payment bandwagon - in spite of some very tasty benefits.
The good news: there’s powerful online billing software out there that doesn’t have to cost an arm and a leg. It’s a variation on traditional EBPP called payment without enrollment.
How does it work? What techniques does it use to keep online payment costs reasonable? What are the pros and cons versus traditional online billing and payment?
Read on for answers to those questions – and more.
Payment without Enrollment - How It Works
A staple of the early days of EBPP, payment without enrollment systems offer a standalone website that requires customers to enter all their personal financial details – account number, name, address, phone number, email, payment amount, statement number and credit card/debit card/ACH information – each time they need to make a payment online.
Before the transaction is completed, customers are asked to review and verify the finer points of their payment. Most application will then conclude the transaction by providing some sort of receipt – either a confirmation screen that can be printed or an email sent to an inbox they authorized during payment.
Payment without enrollment systems don’t need to have financial information about your customers ahead of time. The payment is the linchpin of the process. Transaction data is captured, stored and processed in the same way as with the other EBPP options. The only difference is in the level of integration with pre-existing customer financial data and the number of billing tools offered to both your customers and business office employees.
The Pros
• Provides consumers with a simple way to pay their bill online, without the sign-ups and hassles that are part of the paperless billing enrollment process.
• Its a perfect solution for the many consumers that prefer to receive a paper statement, but have embraced the speed and convenience of online payment. Or for the growing number of your customers that have given up on paper checks as a payment method entirely.
• Making a payment is fast and easy for customers, accelerating days in A/R and increasing your organizational cash flow.
• Automated payment processing and settlement reconciliation improves revenue cycle practices and reduces
• Payment without enrollment websites are faster to setup and easier to manage than online billing and payment portals that are flush with customer account and bill payment bells-and-whistles.
• And – with fewer development hassles and an efficient, software-as-a-service model – they cost less, too.
• Customers don’t have to go through a lengthy registration process or manage yet another online username/password – all the account info used to pay online comes directly from their statement.
• Your customer service representatives can quickly process phone-in payments for customers online.
• Payment without enrollment provides a natural “next-step” for customers that are used to traditional, paper-based statements. It’s an online payment channel, but it doesn’t require a lengthy registration process or a massive change from the way your customers currently receive their statements and pay outstanding balances.
• It easily integrates with your current statement processing workflow without the need for special file configurations.
• It’s an ideal for small billers that might lack a corporate website or can’t supply their online billing and payment vendor with customer account information in a daily batch file.
The Cons
• Payment without enrollment should not be confused with paperless billing. Consumers that use this option are generally statement delivery traditionalists: receiving a paper bill, then heading online to make a payment. That makes a big difference on payment processing speed and efficiency. But it doesn't reduce statement print and mailing overhead like paperless eStatement delivery.
• Payment without enrollment websites are purposefully option-deficient. If your customers are after online statements, or detailed payment histories, or exhaustive payment options – like payment plans or the ability to edit/cancel scheduled payments - they’ll likely find payment without enrollment lacking.
• So too will your business office if it requires back-end service tools like the ability to search for a particular customer statement or double-check their payment history.
• There’s no integration with your existing financial data on customers. So they’re forced to input payment information each time they make a payment. That’s fine the first few times a customer has to make a payment. The fourteenth time? That can get a little time-consuming (not to mention frustrating).
• And because your customers are asked to fill in billing data each time they make a payment, there’s a higher likelihood of human error, which increases payment exception and the workload of your customer service staff.
The Upgrade - Personal Payment Websites
For consumers, one of the major drawbacks of payment without enrollment websites is the time it takes to fill-in personal information and transcribe account details from their statement.
It’s also an issue for billers - leading to more payment errors and exceptions and, in turn, more involvement from business office employees troubleshooting and correcting issues.
And that’s where personal payment websites can help. A hybrid approach that pulls elements from both payment without enrollment and more robust full online billing and payment applications, personal payment solutions don’t offer as many tools as today’s best-class EBPP platforms, but they do integrate with billers’ statement file to provide a more streamlined billing experience.
What exactly are we talking about? Well, it works like this: a personalized URL and password is printed on each statement that you mail. When a customer logs on to their personalized payment website, their account information and payment details are already pre-populated in fields on the website (pulled directly from the source file used to create your customer billing statements).
So customers simply have to log-on, enter credit, debit or ACH payment information and confirm the transaction. That eliminates many of the data entry errors that hamstring payment without enrollment websites. And it shortens the time it takes for customers to complete the payment process (most payments take less than a minute to complete and confirm).
The Verdict
Okay, so payment without enrollment websites don’t exactly represent cutting-edge EBPP technology these days. In comparison to the cream of crop billing and payment platforms, the process is a little, well, unsophisticated. But that’s not to say it doesn’t still have some really productive (and profitable) applications.
Three really good fits for the technology include:
1). As an EBPP Baseline. For example: a company understands the unique value proposition offered by online payment – faster payment processing and posting, streamlined revenue cycle ops, and lower collection costs – but would like to try online payment before they take on the investment of rolling out a feature-rich EBPP website. Or they’re just down-right skeptical of the overall value proposition and would like an affordable way to help determine overall customer adoption.
2). For Small-Scale Billers. That includes start-ups, small businesses and companies that don’t do a ton of invoice- or statement-based billing that want the speed and automation of online payment and funds settlement – but without the cost of paperless billing and additional account management tools.
3). As an EBPP Add-On. Many businesses choose to offer payment without enrollment alongside a more robust portal to capture customers that aren’t interested in completing the enrollment process needed for a full-scale portal, but still would like to pay their bill online.
Do you incorporate a payment without enrollment site into your EBPP strategy?