Striata and AcceptEmail delivered two of my favorite demos this week at FinovateEurope. Both are working on ways to help move consumers away from antiquated and wasteful (but easy to use) paper billing and into the 21st century with interactive PDF versions delivered via email (also see ActivePath’s FinovateFall 2010 demo video).
Unlike certain personal finance products which have more intangible benefits, ebilling stands to drive tens of $ billions of wasted expense out of the system while at the same time making consumers’ lives simpler. That’s worth paying attention to.
And I like the Striata/AcceptEmail/Activepath approach. Migrate consumers to an interactive email bill which is far superior to its paper ancestor and is aggregated within a familiar interface, the email client (see note 1). This is the most likely method of gaining mass adoption.
But email inboxes are notoriously messy and over-crowded making it easy to overlook emailed bills (note 2). So I really like the idea of an ebilling hub, a place where all my bills are stored so I can review the history, communicate with billers, and make sure everything was paid on time (note 3).
That’s why I’ve been following the developments at Doxo; Volly from Pitney Bowes; and Zumbox, which all have very different ideas on how to pull this off. But one thing they’ll all need is payment capabilities. It’s not enough to just view a stack of ebills, you have to be able to complete the task with payment.
So it was good to see Doxo add payments to its ebilling hub this week. The Seattle startup, which moved into public beta late last year (see previous post), now allows users to pay any bill received into the hub (currently only Sprint and KCPL).
Users press the Pay button displayed by the bill in the “to do” section (see first screenshot). A popup screen is used to schedule the payment.
Bottom line: There’s plenty of opportunity here for multiple approaches. Email bills are a pretty safe bet, while the ebill hub is a longer shot. But ultimately, we believe there’s a place for both models.
Doxo’s ebilling hub now includes a Pay button (3 Feb. 2011)
Popup payment-scheduling screen
1. See our recent reports: Paperless Billing and Banking and Email Banking: Revitalizing the Channel.
2. Also at FinovateEurope, Yodlee demoed a clever solution to help organize bills. It’s new app will automatically search your hard drive to find downloaded bills and statements and automatically upload them into the Yodlee PFM where they can be aggregated and stored in the cloud.
3. You can do this with individual billers by logging into their sites, but that is a time-consuming chore best avoided.
- Online would trump the ATM, call center, and branch for routine information queries and simple transactions.
- Alerts would keep users informed of account activity and status.
- Bills would be paid online and delivered the same way.
Most of this vision has come to pass. The only holdout is bill/statement delivery, which has remained stubbornly paper-based, despite a decade of trying to coerce consumers to do without the paper security blanket.
Paper bills and statements are an enormous waste of resources, costing $40 billion or more annually in paper and postage. Plus, there’s all the time customers spend storing, sorting, and rummaging through paper statements. And there’s the tens of thousands of calls to customer service that could have been avoided with better organization.
But consumers will continue to cling to the paper until there are:
A.) Clearly better alternatives
B.) Tangible incentives to turn off the paper
Both of these themes are addressed in the latest Online Banking Report (link). Financial institutions, situated at the intersection of the bill and the payment, are in a great position to drive paper out of the system. But so far, it’s not happening as fast as it should.
Doxo, which launched an ebilling hub last month, could be the catalyst for change, at least on the billing side. It’s encouraging to see two billing innovators, Sprint and Kansas City Power & Light teaming with the startup, even before the service gets out of private beta (see previous posts).
So what can you do to take part in the inevitable movement away from paper? Read our latest report for 34 ways to convince customers to part ways with paper.
About the report:
Paperless Banking & Billing (link)
Cloud computing combined with mobile capture mark
the beginning of the end of paper statements
Author: Jim Bruene, editor & founder
Published: 26 Nov. 2010
Length: 40 pages
Cost: No extra charge for OBR subscribers, $495 for others here
A few weeks ago, I wrote about Doxo, a newly launched startup, building what Microsoft, Checkfree, and others were unable to achieve a decade ago: an ebilling hub that consumers actually used. A number of the comments, and private emails I received, were skeptical given that history.
But today the startup put itself on the map with the launch of its first biller, Sprint, with nearly 50 million customers (press release). Interestingly, Sprint has been relatively successful in converting customers to paperless billing with 23% adoption (note 1). But that still means the company generates around a half-billion bills annually.
Because Doxo charges Sprint a fraction of what it saves when its customers turn off the paper statement (a requirement to use the system), the telecom giant has little risk in partnering with Doxo.
Co-branded landing page for Sprint customers (link; 9 Nov. 2010)
1. Many billers have found it difficult to drive paperless adoption beyond the 20% to 30% mark.
- Finding info: Google
- Purchasing and organizing music: Apple iTunes + iPod
- Keeping track of your friends: Facebook
- Booking travel: Expedia and others
- Getting rid of stuff: eBay and Craigslist
- Paying for it: PayPal
- Tracking your money: Online banking
But despite all these advances, does anyone feel like they are more organized today than they were 10 or 15 years ago? Most of us still deal with stacks of paper bills, receipts, statements, privacy notices, along with emails, alerts, and the occasional voice message from our service providers. And if we forget to pay someone, the financial consequences can be huge. So, it’s no wonder we decide to keep the paper statements coming to help us remember to pay each bill.
The company that solves the paper-based “organizational mess” could be the next big thing online. While it’s way too early to project a winner, a Seattle-based startup launching this week has as good a chance of taming the paper beast as anyone I’ve ever seen. The company is Doxo, which I wrote about briefly this summer (see note 1 for invites). The company’s DNA is Qpass, an early billing and payments company sold to Amdocs in 2006 for $275 mil. Co-founders Steve Shivers, Mark Goris and Roger Parks all worked at Qpass.
Here’s Doxo’s service in a nutshell, using the Facebook metaphor:
- Create a secure place online where bills can be stored; let’s call it Facebills.com
- Allow authorized biller “friends” to communicate directly to their customers via Facebills.com, this includes sending the bill itself, plus customer service and marketing communications
- Once the biller and end-user are friends, turn off the pesky paper statements and store everything forever, for free, on the platform
The business model:
- Consumers pay nothing
- No advertising (other than marketing message from biller “friends”)
- Billers pay for the entire platform since it costs them a fraction of what they pay today sending paper bills and processing payments
Why would billers pay for it?
- It’s a fraction of the cost of paper + postage
- Adoption of estatements has stalled at 10% to 15% of consumers even for billers who’ve worked relentlessly to get rid of paper; and the easy way to get adoption, charging for paper statements, gets both consumers and politicians all worked up
- The Doxo platform provides a direct, secure communications path to end users, including marketing messages
- No advertising from competitors makes Doxo more desirable than other third-party systems where billing info might end up residing (e.g., Google/Gmail, Mint, etc.)
- The network effect; managing multiple bills in one place is the carrot to get consumers to give up the paper
- Billers are not yet on the system in this private-beta release (note 1). Users can set up pages for each biller and populate it with their account info and uploaded statements. This is a temporary limitation; I’ve been assured that some big-name billers are on the way.
- It’s currently a read-only system, meaning there’s no way to pay the bill. Eventually, it makes much more sense to allow customers not only to receive the bill, but also to pay it from within Doxo.
Why it could be huge: This is a classic “network” play. The more billers on the system, the more the consumer benefits and vice versa. Whoever gets this system to scale first will enjoy an enormous “eBay” network effect which will be difficult to dislodge. CheckFree/Fiserv and others have been down this road but have not achieved critical mass, leaving the door open for an aggressive startup to fill the void.
I like what I see at Doxo. And not just its slick UI. I’ve interviewed company execs several times and they have this thing nailed, at least in theory. The user-experience is great, assuming the startup brings in the billers. And the biller’s business case is a no-brainer, if Doxo scores the end-users. We’ll know it has a good shot when a half-dozen big-name billers come on board.
Why it could lose: Consumers are absolutely not looking for another place to manage their bills. And very few care enough about it to do a lot of work populating a website with account info. Finally, until the portal develops a recognized brand, users won’t trust it. It’s critical that a few big billers endorse Doxo to get it jump-started. Even then, end-users may simply not be willing to spend the few minutes it takes to get set up on Doxo.
Bottom line: I love it and want all my bills to go here now. So here’s to being able to “doxo” statements to me sometime very soon.
Electronic biller page at Doxo for fictional Goliath Bank (21 Oct 2010)
Note: The “To Do” tab is where account statements are delivered
Doxo inbox for receiving statements and other communications
Doxo storage area for filed statements
Note: Users can upload their own electronic documents to supplement (or in lieu of) those received through the Doxo platform
1. The company has tweeted that it will hand out invites to its followers on Twitter.com/doxo. Update: Doxo sent us some invite codes, use “netbanker” as your access code.
Two significant Seattle-based financial startups are gearing up for launch, something I haven’t been able to say since the bubble days. We looked at location-based transaction monitoring company Finsphere last week. Today, we take a peek at Doxo, which is looking to disrupt the ebilling market and bring transactional paper mail into the 21st century.
I met with CEO Steve Shivers and Marketing VP Kevin Frisch last week in their new Pioneer Square office, a nifty location recently vacated by Microsoft. While public details are limited, I’ve had two briefings with the firm and can say that if it works, it could be one of the biggest financial plays in many, many years. Like Finsphere, Doxo is backed by Mohr Davidow Ventures and Bezos Expeditions.
Of course, the ebilling space is littered with failures including many well-funded ventures that pretty much all ended up being acquired by CheckFree (now Fiserv): MSFDC/TransPoint (Microsoft, First Data, and Citibank), Spectrum (Wells Fargo, First Union, and Chase) and Integrion (IBM and 17 banks) to name just a few. And the ebilling service at Fiserv isn’t exactly blowing the doors off, delivering 320 million bills each year (2009), just a sliver of the 40 to 50 billion sent annually in the United States.
All I can say about the startup is that they are creating an online hub where billers can send bills and communicate with customers in a much better way than through snail mail. It’s put together in a way that could really speed estatement adoption. And it’s funded by the billers, who save money immediately by eliminating paper statements to participants.
As demonstrated by the history of failed ebilling ventures, there are huge obstacles to overcome. But the time may be right for ebilling to finally take off. Billers are frustrated with low levels of estatement adoption, consumers are fed up with redundant email and paper communications, and no one wants to waste natural resources (and money) if there’s a viable alternative.
No one has yet figured out how to solve it. Doxo may have the answer. Stay tuned.