TAWPI @ NACHA Payments

Posted by Mark Brousseau

NACHA is partnering with The Clearing House to bring its long-awaited Electronic Billing Information Delivery Service (EBIDS) into production. NACHA made the announcement during a press briefing this morning at its Payments 2010 event at the Washington State Convention Center in Seattle. EBIDS, an Automated Clearing House (ACH) Network bill presentment and payment solution, has been a NACHA pilot program since 2008, operated by the Federal Reserve Banks.

EBIDS expands the capabilities of the ACH Network by enabling businesses to leverage its infrastructure to deliver electronic bills to consumer online banking accounts. The ACH Network supports electronic billing functions such as enrollment, bill presentment and enrollment maintenance, as well as bill payment. In the pilot, Verizon worked with J.P. Morgan to deliver eBills to customers at Wells Fargo and Dollar Bank. Since September 2008, 4.5 million transactions (including enrollments, enrollment acknowledgements, bill presentments and payments) were processed through the EBIDS pilot program.

“EBIDS really takes advantage of the core competencies of the ACH Network: ubiquity, efficiency, security, and the ability to pass information as well as payments across the network,” said NACHA President and CEO Janet O. Estep. “EBIDS, perhaps more than any other ACH service that we have introduced, brings value to all participants.”

The ubiquity of the ACH Network will help differentiate EBIDS from other EBPP solutions, Estep said. “The ubiquity of the ACH Network is lacking in the bill presentment space. EBIDS will allow billers to reach all of their customers like never before,” Estep explained. “Conversely, customers will find it advantageous to find all of their bills in one place.”

While electronic bill payment continues to gain traction, Estep noted that electronic bill presentment is still struggling with low penetration. Estep said that the ubiquity of EBIDS will provide benefits to “everybody who has to be involved, and there are a lot of players.”

“Consumers are aggressively migrating to online banking and financial management solutions,” said Russ Waterhouse, executive vice president, product development at The Clearing House. “As an ACH operator, we are in a unique position to provide financial institutions and their customers with a standardized, ubiquitous electronic bill presentment and payment solution.”

Studies show that consumers are increasingly migrating to online bill payment and presentment and specifically seeking a consolidated electronic solution – like EBIDS – to access their bills from a single location. According to a 2009 Javelin Strategy & Research study, 70 percent of online households pay bills via the Internet every month, while only 38 percent have viewed an eBill at a bank or consolidator site, thus reiterating the growth opportunity that exists for online bill presentment. Moreover, Javelin’s 2010 Green Billing Report finds that nearly half of consumers would be motivated to switch to online billing if there was a single online site that consolidated statements.

Biller adoption of EBIDS will be an ongoing area of emphasis as the technology transitions into full-scale production. Over the next several months, NACHA also will work to define the ACH Network fees associated with EBIDS.

“Reducing the volume of paper bills is a strategic goal at Verizon,” said Angeline DePauw, director, remittance processing, Verizon. “We believe EBIDS will help us achieve this goal while at the same time allowing us to expand our customer reach and reduce expenses and customer service calls.”

DePauw added that, “Verizon sends out 22 million bills a month, so if we could suppress just 1 million bills, it would be huge. Just consider the economics of eliminating all that postage.”

“EBIDS sets the stage for future ACH growth,” said Pat Thelen, executive director, J.P. Morgan Treasury Services. “We are confident that when we take this to our clients, they will the value.”