E-BILLINGWhat is Electronic Billing? |
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| What Is Electronic Billing |
E-commerce has undoubtedly gone through some very difficult times recently. Despite the apparent ebb in e-commerce fortunes, we appear on the brink of another great e-commerce opportunity. IDC, a Massachusetts-based technology research firm, recently estimated that business-to-business (“B2B”) payments amounted to a staggering $48.6 trillion, of which some $35 trillion is paid by check and almost all of the remaining $13.5 trillion is paid by automated clearing house (“ACH”) transactions.[1] Even though most businesses are still using paper-based checks as their primary B2B payment method, few find this method efficient. Electronic bill presentment and payment (“EBPP”), the process by which businesses can transmit billing, payment authorization and remittance information among trading partners, currently makes up about 1% of B2B transactions, but IDC projects this will grow to about 14% by 2004.[2] Much of this growth is expected to come from traditional brick-and-mortar businesses that have been late adopters of e-commerce technology. Up until now, many of these firms have viewed e-commerce merely as an additional distribution channel to their established wholesale and retail channels. However, B2B EBPP has the capability to revolutionize how businesses transact business with each other.
Electronic purchase and sale transactions are not new to businesses. Electronic data interchange (“EDI”) and ACH have been around for many years. So, what has changed in the business, legal and technical landscapes suddenly to make EBPP such a potentially hot prospect? Certainly the recent economic slump has made businesses more aware they need to be more cost and efficiency conscious. There has also been a steady evolution in technology, making complete integration between enterprise systems possible. Businesses are no longer willing to accept that they will have to operate separate legacy systems to handle major business functions. Legally, statutes such as the federal E-Sign Act and state enactments of the Uniform Electronic Transactions Act are helping level the legal playing field between electronic and paper versions of many types of commercial records. Businesses now more than ever have more financial and operational reasons to want to “electronify” the entire procurement contracting, invoice presentment and payment transaction cycle, and fewer legal reasons to have to hang on to paper records.
Up until now EDI and most forms of ACH have not been flexible enough to handle both the payment and bill presentment functions for most businesses. For example, EDI is typically a bilateral arrangement established between two trading partners that transact large volumes of business with each other. The parties also need to enter into a detailed EDI trading partner agreement and ensure that their data processing and transmissions systems are compatible, both of which increase start-up costs. Once established, the trading partner relationship is fairly inflexible, and cannot easily be modified to add or change parties. Most forms of ACH transactions permit little or no accompanying remittance information, making bill presentment and reconciliation with accounting systems difficult. ACH is also a batch-processed system that requires one to two banking business days for payment transaction processing and settlement. In the world of increasingly fluid inter-business trading relationships, these traditional forms of EDI and ACH have not proven to be efficient or suitable to replace cash or check payments as the predominant means of effecting B2B bill presentment and payment. However, emerging EBPP systems that address the needs of the entire purchasing, bill presentment and payment transaction cycle could become the “default” means by which B2B commerce is transacted. |
E-COMMERCE E-BILLING E-PAYMENTS E-BANKING E-SHOPPINGE-ADVERTISING WEB SITE DEVELOPMENT INTERNET LAW FUTURE OF E-COMMERCE |
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