10.08.09Robert Craig, Executive Vice President and General Manager, eCommerce Services, Online Resources Corporation

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Smart grids, remote meter reading -- these are exciting times for new technology in the utility industry. But while some of these major core services are being rapidly reengineered there is one regular activity in need of improvement that is often overlooked: customer billing. Today, savvy utility companies are finding greater cost efficiencies by building stronger consumer relationships through an integrated electronic bill payment and presentment approach.

Even though a growing number of consumers consistently voice their preference for electronic billing options, only a few forward-looking utilities have implemented a fully integrated electronic bill payment and presentment strategy, despite the many benefits. These progressive, service-focused utilities include Miami-Dade County and Washington Gas. To date, they have seen both an enthusiastic response from their customers as well as numerous efficiency gains.

Generally, three factors drive a decision to move to electronic bill payment and presentment:

• Whether the utility has in in-house technical resources to build its own system or will seek and outsourced technology partner;
• A desire to ensure compliance with data security standards; and
• Often the key driver, providing highly-responsive customer service.

In the case of Miami-Dade, which services 400,000 water and sewer customers, it chose to implement a suite of services, even though a proprietary in-house system was available. By choosing this route, the utility was able to quickly offer its customers the ability to enroll to make one-time or recurring payments electronically, the ability to make a single online payment if needed, and low-cost option for credit card payments with a service fee.

These services, which were completely integrated into the Miami-Dade site under the county's branding, generated immediate acceptance and usage continues to grow. In the first year, the percentage of customers paying their bills online increased from 5 percent to 18 percent and today more than 40 percent of all payments -- approximately 60,000 per month -- are made electronically.

With support for multiple payment types (ACH, credit card and debit card) and across multiple channels (web, IVR or customer service rep) usage continues to grow about 5 percent per year.

The county utility benefits from the efficiency of electronic payments as well as ensuring complete compliance with payment and consumer privacy regulations. Real-time account verification limits exception procession and aggregates all electronic payments into a single, secure file, enabling Miami-Dade to reconcile only a single deposit each day, saving time and improving quality control.

Looking ahead, Miami-Dade is considering expanded IVR capability to service its multi-lingual customer base and possibly placing kiosks in the community to accommodate walk-in payments.

In the case of Washington Gas, key drivers are service and efficiency in addition to back-end capabilities and savings. Most appealing to Washington Gas are the gains from the electronic lockbox function that reduced reconciliation from three to five days for paper down to one day for electronic payments, greatly improving cash flow.

Washington Gas also receives instant soft posting for credit card payments. This empowers the utility to offer last-minute consumer payment options from Web, IVR call center and walk-in payment channels that update in real-time with the company's customer relationship management system.

Not only do these services result in administrative savings but they limit the number of service cut-offs and restarts, saving additional dollars. The cost of interrupting and restarting service to a consumer is often more than the amount of the outstanding bill, so making available convenient payment options is to everyone's benefit.

Before Washington Gas implemented these services, one-third of its payments were made through online or home banking. Now, 46 percent of payments flow through electronic payment channels. On average, a utility company can save roughly $5 to $10 per customer on an annual basis by establishing an electronic billing consumer relationship. Companies can realize an additional 50 percent in savings when they leverage their electronic billing relationship to deliver targeted customer service and marketing messages.

But the benefits of an integrated electronic bill payment and presentment solution do not stop here. Looking ahead, utilities can reap additional efficiency and customer service benefits through more recent advances, including consumer enrollment in the electronic payment relationship, suppression of paper bills and enabling utility services to be purchased on a prepaid basis. Further, consumers will begin to look to interact with their utilities via mobile devices such as text alerts and mobile bill payment.

Ensured compliance, increased customer self-service, improved cash flow, reduced reconciliation costs and enhanced customer relations are all benefits savvy utilities have just begun to realize by building better billing experiences with an integrated electronic payment and presentment strategy.

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