What's it going to take before more businesses and consumers start using the Internet to pay their bills? Perhaps nothing short of anthrax.

Gartner Group reports a 20 percent increase in enrolment in electronic bill presentment and payment (EBPP) programs since the anthrax scare was first reported. A study from Jupiter Media Metrix contradicts this finding, stating that neither the September 11 attacks nor the anthrax incidents that followed generated a noticeable increase in traffic to large online billing sites.

Whatever the answer, the debate itself is illuminating. You know EBPP is in bad shape when analysts are left to debate whether anthrax can give it a lift

The benefits of EBPP have been heralded for years, but few companies and consumers have rushed to embrace them. The TowerGroup estimates that of the 15.4 billion bills delivered in the United States last year, only 1 percent went through the entire billing cycle--from presentment to payment--online. Gartner found that only 17 percent of all Internet users they surveyed in November 2000 preferred to view their bills electronically. The same survey found that only 9 percent of enterprises sent bills to business customers over the Internet, although 26 percent sell to other businesses over the Internet.

For consumers, EBPP's chief selling point is convenience. In theory, paying bills electronically should also automatically update personal finance software so that you don't have to open envelopes, write checks by hand, maintain paper records, or re-enter transactions into the finance package you use.

EBPP should also be good for companies that serve consumers. With EBPP, these companies can cut their billing costs by about US$1.50 a bill and open an interactive marketing channel. B2B companies--whose billing costs are significantly higher (due to their more complex bills and processing systems)--can save even more than consumer-facing enterprises by moving to EBPP. Businesses can also save money by automating the process of resolving billing disputes--an activity that is much more prevalent in B2B transactions.

So why aren't more people jumping on board? EBPP has failed to deliver its key benefit to consumers--convenience. Unlike an ordinary mailbox, consumers can't go to a single place to collect and pay all their bills.

"There's been virtually nothing to adopt," says James Van Dyke, Jupiter Media Metrix's research director for the Financial Services and Payments Group. Consumers won't rush online to view or pay one or two bills out of a total of 12 to 18 bills." E-billing consolidators, such as CheckFree, provide access to only a limited number of bills because many billers haven't signed on yet with consolidators. That means consumers must still pay most of their bills by hunting down individual biller's sites where they can find account information and pay bills. Gartner estimates that of those consumers who do pay bills online, nine times as many go directly to individual biller sites to pay bills.

Finally, while many billers let you pay bills online, they continue to send paper bills through the mail instead of presenting them online.

Adoption is even slower among businesses, particularly in the B2B arena. Businesses can't choose a standard technology because there is no clear leader among EBPP vendors. "Businesses almost have too many options from which to choose," says eMarketer Senior Analyst Noah Elkin.

"Many vendors serve just a piece of the process." The combined challenge of integrating fragmented applications among various providers along with the need to integrate these applications into existing ERP systems discourages most companies from investing in EBPP. Furthermore, many enterprises that already manage transactions with EDI aren't ready to walk away from their large EDI investments for an unsettled and incomplete Internet solution.

While businesses, consumers, and even EBPP vendors are left mucking about in the quagmire, there is one group noteworthy for its absence--banks. By most accounts, banks--where many customers prefer to manage their financial transactions--could play a big role in creating momentum for electronic billing. EBPP should be a good way for banks--whose core competency, after all, is payment processing--to add revenue and keep customers.

Banks have been slow to support e-payment because it will cost them a lot of money to build and maintain the necessary infrastructure to support a variety of customers ranging from consumers to large enterprises. But if handling payments isn't one of the key services banks provide, what is? It's time for banks to demonstrate some leadership and take their place in the Internet food chain.

Adrian Mello has covered the technology business for nearly two decades and is a former editor-in-chief of Line56, Macworld, and Upside.

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