Many people have spoken about the importance of taking online payments, but mostly in the context of existing e-commerce operations. While many people have described ways to build online payment functionality into electronic purchase systems, some companies simply want to present bills and take payments online for services and products that are provided offline. Paying your electricity bill online is a prime example.
The benefit of providing your customers with an online payment option is convenience - they are more likely to do it more quickly, thus increasing your cash flow. The problem with waiting for customers to write cheques and send them to you through the post is that they generally wait until they are overdue before they make a payment.
Whereas many e-commerce-based online payment systems are sold as modules to be integrated into an e-commerce application, online billing and payment systems can also be provided as third party services. You can present billing information to the customer online, but you will need an Internet Payment Provider to fulfil the exchange of cash.
PayPal, originally a US-centric service but now offered internationally, enables people to request money by sending bills online, and lets customers send money back via the same route. Using the system, it is possible to set up business accounts and accept money from your customers, including credit card payments on your website, using the Web Accept online payment service. Once you have set up an account on the system, simply click the 'request money' tab, enter the amount that you want to charge, the email address of the recipient, and the service makes the request. When the customer pays you (using PayPal), you receive cash.
This kind of service is great for small businesses, but it is unlikely that a large company will wish to operate in this way. For larger companies, a more comprehensive system may be needed, in which you don't have to make individual requests. The answer may lie with credit card companies, which are now making online payments easier. American Express, for example, has implemented the Private Payments scheme. This provides credit card customers with a unique private number that can be associated with their accounts, making themselves feel more secure when making online payments. That means that all your company has to do is present them with their bill online, and take American Express payments on your site.
Presenting your customers with online billing information is a little more tricky and will require development work at the back end. Many products exist that enable you to transfer data into HTML format, using middle-tier technology such as Microsoft's Active Server Pages. Dragging customer billing information out of a central data repository and showing it to them online is only one part of the problem; you must also be able to track payments that they have made and represent them in a timely manner.
Some companies offer this functionality in dedicated electronic bill payment products, incorporating payment and billing information online. One company that provides some services is edocs, which offers a range of electronic account management and billing products.
Its eaSuite service, for example, incorporates a number of products such as eaPay, an electronic payment and warehousing component that enables customers to make and track payments.
Banking on community
Another way to cut down on the investment needed to facilitate online payments, and to benefit from someone else's expertise, is to speak to the banking community. Many banks have relationships with software companies that can bill payment support for your company into their products. Intuit, for example, has the Quicken personal finance software product, which enables people to pay bills online from home. Deutsche Bank, in conjunction with iPlanet, has launched its own online bill payment service called db-eBills, due to be rolled out in Europe later this year.
At the end of the day, much of the technology behind online payments and bill presentation to non-e-commerce companies is similar to that used by e-commerce players. Dealing with a larger, experienced partner, like the major financial institutions, can enable you to create an efficient link between your business's accounts system and bill presentation, approval and payment systems.
Pay day: AOL's online bills
Barry Schuler, president of AOL's Interactive Service Group, has predicted that electronic bills will replace many paper bills. AOL launched Intuit's Quicken bill payment service in the US in December, enabling members to pay up to 20 bills per month online.